Student Loan and Bonus payments questions

bradford1980

I pay my student loan off through PAYE which is fine (£165 per month). However every year I receive an annual bonus which gets put in my wage and subsequently the Student Loan company takes an increased wedge of this too every year (which is a substantially larger wedge). My first question is can this be prevented from PAYE?

As I am nearing the end of my payments I have switched to DD (direct debit) but this will not take effect for 2 months which is just after the bonus payment is due to be made.

Finally, I am emigrating in June should I honour the DD or just cancel it and ignore the outstanding debt (will be around £800-£900)

Pixie5740

If you're repaying your student loan via PAYE when you get your bonus then no you can't stop SLC taking a slice of your bonus.


Yes you should honour your debts with SLC. It's these loans that allowed you to go to university.


Could you ignore them? Possibly if you're emigrating for at least 6 years and your moral compass is a bit wonky.

bradford1980

Ok so I definitely need to defer the Bonus payment thank you.

I'm not concerned with my moral obligations, I just want to know what happens to the debt and am I OK to cancel the DD. I won't have income coming in until I get a job and I cant have (£150+) coming out of my limited budget until I do.

Pixie5740

If your income is going to be zero then contact SLC and tell them that. You should also inform them your moving overseas. They'll send you an Overseas Income Assessment Form to complete. SLC will then calculate how much you need to repay each month based on your income whilst overseas.

However, I get the feeling you won't bother to do that.

suicidebob

bradford1980 wrote: »

Ok so I definitely need to defer the Bonus payment thank you.

I'm not concerned with my moral obligations, I just want to know what happens to the debt and am I OK to cancel the DD. I won't have income coming in until I get a job and I cant have (£150+) coming out of my limited budget until I do.

They'll pass it to debt collectors and they'll come chasing when you return back to the UK in a couple of months.

bradford1980

I'm not planning on coming back, my wife lives over there and I have a permanent residence visa

stator

You never know, often things don't work out how you plan.
If you're close to paying it off, I would just pay it off and be done.

dearlouise

If it's a 'bonus' why is there an issue with student loans taking an increased 'wedge'? If you earn more, you pay more, whether it's classed as a bonus or not. There seems little point in being crafty about when you get this bonus.

Rather than cancelling the DD and hoping the situation will go away, I think it would be wiser to let them know you will no longer have an income. Then you won't have to pay anything... and no-one will be chasing you.

Then when you DO get a job, which I'm sure you will, continue paying the debt as you have been.

Not sure why this is even an issue? You've been paying it to this point, so pay it ALL off!

dearlouise

bradford1980 wrote: »

I'm not planning on coming back, my wife lives over there and I have a permanent residence visa

That is not a guarantee you'll be there forever.

If you come back, you could come back to a mess, debt collectors, increased fees, bailiffs. Do you have any assets here? Family? What information did you give when you were a student?

With interest & costs over years, them charging YOU for tracking you down, £800 could turn into thousands.