Managing money - Information for final year students
If you are in your final year at UWE, we are here to help and support you with your finances and help you to manage your money. The information below provides an overview of what happens with your student loan, council tax, bank accounts and other financial issues when you graduate.
Once you leave the University, you will be liable to repay your student loans from the April after you completed your course. In April 2013, the SLC will expect you to start repaying your loans. If you are earning less than the set level before any deductions (tax or national insurance contributions), you will not be liable to repay. It is important to inform the SLC that your income is too low and complete a deferral form before April 2013.
The threshold for the period up to 5 April 2012 will be £15,000 gross (income before deductions) each year. Information about the threshold, along with examples of repayments, will be published on the Student Loan Company repayment site.
From April 2012, the threshold is set to increase to £21,000 by 2016. From 2017, the threshold for repayment is set to rise with the rate of inflation.
If you are earning more than the set threshold then repayments will be collected directly from your wages by the Revenue and Customs before you receive them. The repayments are 9% of income over the threshold. So were your threshold £15,000, at £16,000 you will repay £7 per month and at £20,000 you will repay £40 per month.
If you are living abroad next April, you will need to contact the SLC to arrange payments directly or complete a deferral form. A different threshold may apply if you work in a country outside the UK.
Whilst you have been a student, your household may have been exempt from paying council tax or paying a reduced amount. When you cease to be a student (22 June 2012), you may become liable for council tax. You should notify your local authority immediately and an amended bill will be issued.
Living in a shared house
If you live in a shared household where all tenants are issued one tenancy agreement between all of you:
- Whilst all the tenants are full time students, there will be no charge payable for council tax.
- If just one of the tenants is a non-student, there will be a 75% council tax charge payable.
- If two or more tenants are non-students, there will be a 100% council tax charge payable.
If you live in a shared household where each tenant has their own individual tenancy agreement, this is classed as a House in Multiple Occupation (HMO), and liability for council tax should be in the landlord’s name. You will need to notify your landlord that you are no longer a student, and they are then responsible for liaising with the local authority.
If you live with a partner who is a non-student and have been receiving the 25% reduction whilst you were studying, this reduction will be removed when you cease to be a student, and a 100% council tax charge will be made.
If you live alone and have been exempt from council tax whilst studying, a new bill will be issued with a 75% charge, which includes the single occupancy discount.
If you claim and receive benefits at the end of term, then you will be entitled to full Council Tax Benefit to cover your share of the bill. Contact the council to let them know of your benefit claim.
Any overdraft on your student account may stop being interest-free shortly after you end your course. Check when this will happen. The bank may put pressure on you to take out a graduate loan to clear your overdraft. If you are on benefits or a low income, you are unlikely to be able to keep up with repayments on such a loan. In this situation, it may be better to stick with your student overdraft rather than commit to a monthly repayment you cannot meet. You may need to negotiate some time to sort out your finances. Talk to the bank.
If your benefit or wage is paid into an overdrawn account, then it may be hard for you to access the money as banks can withdraw overdraft facilities with very little notice. They can also request immediate and full repayment. You may want to consider opening a ‘basic’ bank account for your benefit payments.
If you receive either Employment and Support or Jobseekers Allowances (income-based) or Income Support, you will be entitled to free prescriptions – keep the benefit award letter to prove receipt of qualifying benefits.
If you receive Council Tax or Housing Benefit only, or are on a low wage, you will need to apply for an exemption certificate in the same way you did as a student on forms HC1 and HC5.
Refund of overpaid tax
If you have worked part-time during your studies, you may have paid too much tax. This can happen if you work for two employers at the same time, if you don’t provide your National Insurance number or a P45 when you start work, or if your employer has put you on the emergency tax code.
The threshold for the current year is £7,475 (2011/12). If you have earned less than this amount but paid tax, you may be entitled to a refund. You can also apply for a tax refund for previous years. To apply, you will need to request a refund in writing, enclosing P45s or wage slips, to the appropriate tax office.
Claiming benefits - UK and EU residents
The benefit system is complicated and the information below is an overview only. You will not be able to claim benefits until the end of the academic year even though your course may finish earlier.
If you are unemployed, you will need to make a claim for JSA. You can claim online or by telephoning Jobcentre Plus on +44(0)800 055 6688 or textphone +44(0)800 023 4888. You will not be paid for the first 3 days of your claim. You will need to attend an interview fortnightly (weekly if you are under 25) with evidence of your search for work. As you have just completed a vocational programme, initially you should be able to restrict your search to job vacancies linked to your qualification. If you are eligible for Jobseekers allowance, you will also be eligible for full Housing Benefit and Council Tax Benefit.
Employment Support Allowance (ESA)
This is a benefit paid to people who are too sick or disabled to work and who meet certain conditions. You can claim ESA by telephoning +44(0)800 055 6688 or textphone: +44(0)800 023 4888. When they've spoken to you, they will send you a statement of your situation.
If you are a lone parent with a child under 7, you will need to contact your local Department for Work and Pensions office to make a claim (+44(0)800 055 6688). New claims are initially taken over the phone. It is difficult to back date claims, so it is important to make a claim as soon as you are no longer a student. You may need to attend a work-focused interview before your claim is processed. If you are incapable of full-time work due to a medical condition, you will need to claim Employment and Support Allowance at the same time.
If you receive Jobseekers Allowance, Income Support or Employment Support Allowance, you should receive maximum Housing Benefit for your rent. How much you receive will depend on what kind or property you are renting and how many people are in your household. You can also claim Housing Benefit on the basis of low income (for example, if your only income is from part-time work). The amount that you receive will depend on the level of your income.
Council tax benefit
You can claim this at the same time as you claim Housing Benefit. If you receive Income Support, ESA or JSA, you may also be eligible for full council tax benefit. You can also claim Council Tax Benefit on the basis of low income (for example, if your only income is from part-time work). The amount that you receive will depend on the level of your income.
For the latest information, check out direct.gov.uk.