Martin Lewis warns 1million could be owed THOUSANDS of pounds – can you reclaim cash?
MARTIN Lewis has warned one million people could be owed THOUSANDS in cash - can you reclaim?
The Money Saving Expert has urged anyone with an outstanding student loan to check if they are entitled.
He explained a Freedom of Information request into the Student Loans Company revealed over one million people overpaid in the 2022 to 2023 tax year.
And there's no time limit for how long you have to claim.
There are three main reasons why people are owed money, according to the expert.
THRESHOLD ERRORS
The main problem occurs when former students begin paying back their loans when they don't actually earn enough.
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For most people, that threshold is just over £27,000.
But - depending on where you started university - this figure may be less..
He highlighted that payroll systems will recognise if you earn a certain amount per month that would total the threshold per year,
But, if you don't earn above the threshold every month, or only work six months out of the year for example, the system will still take a percentage to repay your loan.
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This error could also occur if you earn more one month from a bonus or worked more shifts than usual.
WRONG REPAYMENT PLAN
In other cases, some people have been put on the wrong student loan repayment plan.
Firms which don't know which plan you were on to default to Plan 1 - which is where you start repaying over £22,000.
But millions of people are on plans where you pay over £27,000 - meaning many are paying too much too soon.
He urged former students to check which plan they are on by asking their company or looking at payroll statements.
EARLY REPAYMENT
Martin informed those with student loans they are only eligible to pay back from the April after they leave university.
"So, sometimes companies don't know when you left university or they have the wrong details, in which case you start repaying when you shouldn't be repaying," he explained.
"And again, you can get that money back too."
SHOULD YOU RECLAIM
The Money Saving Expert urged anyone who has overpaid to reclaim because these loans could be wiped after a certain amount of time.
Most people have 30 years but it depends on where you are in the UK and when you started university.
Martin explained only 20 per cent of people on Plan 2s, in England and Wales, are likely to clear their loan.
This means they'll have money left in their accounts, meaning overpaying doesn't reduce what you pay in the future.
HOW TO RECLAIM
Martin confirmed there is no time limit to reclaim an over payment.
The process will involve collecting old payslips, your payroll number and PAYE reference number.
You will need to contact the Student Loans Company (SLC) on 0300 100 0611 (for Wales it's 0300 100 0370 and +44 141 243 3660 from overseas).
"And you just tell them that you think you overpaid," said the MSE.
"If you don't have those, I’d get in touch with them anyway, it just slows the process down."
And, if you are reclaiming on the grounds of an incorrect repayment plan, it is important to check with your employer beforehand.
This comes as Martin Lewis also shared his top tips on how to slash compulsive spending - and it could save you hundreds.
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And, the MSE offered his "golden rules" for anyone with a savings account and how taking action could make you hundreds.
Plus, Martin issued an urgent warning to anyone with a credit card - and it could save you £1,000s.