SLC: Letter received, repay within 2 years

TrustyOven

I received a letter from the SLC, specifying that I am within 2 years of repaying the loan and giving me the option of paying the whole lot or setting up a direct debit.

If a direct debit is setup, what happens if:
- I become unemployed?
- my income drops? (presumably they would have to recalculate and adjust the DD?)

StopIt

Is there still the option to pay via salary deductions as normal?


If available, carry on as normal, that way the usual deferment can occur if your income drops below threshold for any reason.

TrustyOven

I'll have to re-read the letter but still think there is an option to carry on with PAYE deductions.

I have enough savings that I could pay it off today and have the same amount left over for emergency fund and savings etc. Which is quite tempting, but I think I'd rather protect myself from cashflow issues and not do that.

Cyclizine

If you continue PAYE deductions, at some point you'll pay off the loan, but the deductions will still come off, since SLC only calculate your arrears annually. If you can figure out roughly when this will be, then you can get the SLC to get your employer to stop the deductions and then get a settlement amount. Otherwise, you can wait until April and then SLC will realise they owe you and you can get a refund.

If it's anything like me, then it'll take at least three months for SLC and my employer to stop the deductions, you'll pay the settlement, then the deductions will randomly restart, you get in touch again, have to send a load of payslips, get refunded and then it turns out you actually overpaid even before the deductions stopped, so SLC owe you even more...

To be fair, they're actually very helpful on the phone, even if their systems are rubbish.

TrustyOven

Cyclizine wrote: »

If you continue PAYE deductions, at some point you'll pay off the loan, but the deductions will still come off, since SLC only calculate your arrears annually. If you can figure out roughly when this will be, then you can get the SLC to get your employer to stop the deductions and then get a settlement amount. Otherwise, you can wait until April and then SLC will realise they owe you and you can get a refund.

If it's anything like me, then it'll take at least three months for SLC and my employer to stop the deductions, you'll pay the settlement, then the deductions will randomly restart, you get in touch again, have to send a load of payslips, get refunded and then it turns out you actually overpaid even before the deductions stopped, so SLC owe you even more...

To be fair, they're actually very helpful on the phone, even if their systems are rubbish.

I meticulously track and record all my SLC transactions, both from the official statements, and also from my PAYE deductions, so I have a running total (minus the monthly interest, which I might start calculating).

I could overpay a bit per month and then when I project 3-4 months left, could then contact SLC and get them to stop PAYE deductions. I suppose that could work.

Lokolo

If you are in a good financial position, in your DD setup you can specify how long you want it over, so you could go for 6 months repayment.

Or if you have the capital (as you say you do), pay it off in a lump sum.

I had £6,000 odd left when I realised I was 2 years off. I set up a DD for a minimum amount (same as PAYE deductions), 6 months later just phoned them up and paid the rest off.

badmemory

TrustyOven wrote: »

I could overpay a bit per month and then when I project 3-4 months left, could then contact SLC and get them to stop PAYE deductions. I suppose that could work.

I doubt this will work as by the time it has all gone via HMRC & employer it will be too late & you will have overpaid.