What happens if I stop paying my Plan 1 direct debit?

Corvus

I've been moved on to end-of-loan direct debits to avoid overpayment of my Plan 1 loan. It's due to be written off in a few years anyway. What would happen if I simply stopped paying from my bank account? Do they put you back on PAYE deductions?

marcia_

https://forums.moneysavingexpert.com/discussion/6677618/what-happens-if-i-stop-paying-my-plan-1-direct-debit

yes they will take it paye

Corvus

Copilot says they will never put you back on PAYE

kaMelo

Worst case scenario, you stop paying and your account falls into default. In default the loan agreement is void, the entire loan is repayable and will never be written off. SLC obtains an attachment of earnings order against your earings/benefits/pensions (delete as appropriate) to take whatever you owe on your student loan.

So, given the outcome is the same why are you contemplating not paying back your student loan?

Corvus

Have SLC ever obtained an attachment of earnings order against someone's pension? I'd be amazed. Of course I'll keep paying it off. Copilot does however say quite categorically that once you've moved off PAYE repayments, they will never bother to put you back on them.

marcia_

https://forums.moneysavingexpert.com/discussion/comment/82092197#Comment_82092197

be wary of answers on AI. it's only as good as the information it is fed from the millions of answers on the web many of which are wrong.

kaMelo

https://forums.moneysavingexpert.com/discussion/comment/82092197#Comment_82092197

I know of no such example where an attachment against someone's pension has occurred, possibly down to the fact the majority of people who took out loans are not of pensionable age yet. Whether there is an example is not really relevant, what matters is that the legislation allows it but a persons individual circumstances will be taken into account.

As @marcia mentions, AI only regurgitates what is already out there, rather than relying on what it spouts you need to check the source of information it is quoting. There was a saying related to computers when I first started work, GIGO, garbage in - garbage out. Copilot is confirming this is still the case.

This is the latest document I can find from SLC. Page 29 Section 7

https://www.practitioners.slc.co.uk/media/1789/repayments-guidance-ay-20-21-v20.pdf

Where a borrower elects to cancel or alter the direct debit without the permission of SLC, SLC
will instruct HMRC to recommence repayment collection through the tax system (Regulation
18(5)). Similarly, a borrower will not be eligible for the Direct Debit scheme where they have
previously been on the scheme and stopped making payments without the permission of SLC
(Regulation 18(1)(c)).