Savanna Hoffman
If you're a UK student loan borrower who's planning to live overseas or already does, you'll likely have questions about how to manage your loan repayments. The process can be confusing, but understanding the basics will help you stay on top of your payments and avoid penalties. Here's what you need to know about repaying your UK student loan from overseas, including important considerations and steps to take to ensure smooth repayment.
| Characteristics | Values |
|---|---|
| Who to inform before leaving | Student Loans Company (SLC) |
| Time period to inform | If moving overseas for longer than three months |
| What to inform | How you're supporting yourself financially, employment details, travel itinerary, bank statements, visa, payslips, etc. |
| How to inform | Online, by filling an Overseas Income Assessment Form |
| When to start repaying | When your income is more than the minimum amount or the repayment threshold |
| Repayment amount | 9% of the total earnings over the threshold |
| Repayment frequency | Monthly |
| Repayment calculation | Based on the Price Level Index (PLI) and the exchange rate of the country |
| Repayment method | Transfer money from a non-UK bank account |
| Penalty | If you don't update your details, you may build up arrears on your account |
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What You'll Learn
Notify the Student Loans Company (SLC)
If you're planning to live overseas or in the Republic of Ireland (ROI) for more than three months, notify the Student Loans Company (SLC) as soon as possible. While living in the UK, you don't generally need to think about repaying your student loan as HMRC takes the money automatically from your salary each month. However, when you move overseas, your repayments will no longer be automatic, and you'll have to ensure you're paying the correct amount.
You can update your employment details online, even if you're unemployed. The online service will tell you exactly what information is needed, which may include:
- Your travel itinerary and bank statements from the past three months
- A valid visa, depending on your country of residence
- Copies of payslips if you're doing casual work while travelling
- A letter from the organisation you're volunteering with, dated within the past year, confirming the amount of support they're providing
- If someone else is supporting you financially (e.g., a parent, guardian, or partner), you'll need to complete the Third-Party Declaration and send bank statements from the past three months, showing how much support they've given you.
If you don't update the SLC about your circumstances, you may incur penalties. If you don't update your employment details, you could build up arrears on your account, which you'll have to repay even if your income is below the threshold for your repayment plan.
If you return to the UK for three months or more, you should also let the SLC know, as your repayment status will revert to that of a UK taxpayer, and you'll need to cancel any separate arrangements made directly with the SLC.
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Provide financial information
If you're planning to live overseas or in the Republic of Ireland (ROI) for more than three months, you must inform the Student Loans Company (SLC) as soon as possible. You can update your employment details online, and the online service will tell you exactly what information is needed. This will allow the SLC to determine if you need to start making repayments. If you are due to start repaying, the SLC will give you an accurate repayment plan based on your earnings.
If you are on Plan 1 or Plan 2, the SLC will use the income from your last three months' payslips to work out your average monthly salary. This will then be multiplied by the number of pay periods in a full year to calculate your gross annual salary. The SLC will then use the "overseas repayment threshold for Plan 1 or Plan 2" table to calculate your repayment amount. They will convert your gross annual salary to GBP using the exchange rate for the country you are living in. Then, they will take away the "repayment threshold (GBP)" for that country from your annual salary. You will repay 9% of the amount left over, which will be split over 12 months to give you your monthly repayment amount.
If you are from England and started your degree on or after 1 August 2023, your loan will be on Plan 5. The repayment threshold for Plan 5 loans is currently £25,000 per year (£2,083 per month or £480 per week) before tax, and you will pay 9% of the amount you earn above the threshold. Once information about repaying the Plan 5 loan from abroad and the overseas repayment thresholds are made public, you can update your repayment plan accordingly.
If you are a postgraduate from England or Wales living in the UK, you pay back 6% of anything you earn over £21,000 per year. For postgraduates who have moved abroad for more than three months, the same process as Plan 1, Plan 2 and Plan 4 loans applies, whereby the SLC works out what the equivalent repayment threshold is.
If you do not update the SLC about your circumstances, you may incur penalties. You will need to continue to repay your loan unless you provide evidence that your income is below the threshold. If you do not update your details, you could build up arrears on your account, and you will have to repay these even if your income is below the threshold for your repayment plan.
To transfer money from a non-UK bank account, use the following details:
- IBAN: GB37NWBK60708010027254
- SWIFT: NWBKGB2L
- NatWest Government Banking Team
- NatWest Customer Service Centre Brampton Road Newcastle-under-Lyme Staffordshire ST5 0QX
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Understand repayment thresholds
Repayment thresholds refer to the amount of money you can earn before you start repaying your student loan. If you're living in the UK, you will pay back 9% of what you earn over the annual repayment threshold. The same principle applies when you're living abroad, but the repayment threshold amount will be different.
The Student Loans Company (SLC) will work out the repayment threshold for your country of residence, taking into account factors such as the cost of living and average salaries. Repayment thresholds vary from country to country and are updated each year to account for price changes.
If you're on a Plan 1 loan in the UK, you pay back 9% of what you earn over £26,065 per year. If you're on a Plan 2 loan, your salary will impact not only how much you repay each month but also the rate of interest your loan accrues. While you're in the UK, your loan currently gains interest at between 4.3% and 7.3%, depending on whether you're a graduate and, if so, how much you earn.
If you're on a Plan 4 loan, your repayments will be equivalent to what you'd pay in the UK, but converted to the currency of your country of residence. If you're living in the UK, you'll pay 9% of what you earn over £32,745 per year.
If you're on a Plan 5 loan, the repayment threshold is currently £25,000 per year, and you'll pay 9% of the amount you earn above this threshold. The interest rate for Plan 5 is usually based on the RPI rate, which matches inflation and is currently set at 4.3%.
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Make payments from overseas
If you are planning to live overseas or in the Republic of Ireland (ROI) for more than three months, you must inform the Student Loans Company (SLC) as soon as possible. You will still be required to make student loan repayments, but the amount you earn before you start repaying your loan may differ from the UK.
To make payments from overseas, you will need to provide the SLC with information on how you are supporting yourself financially. You can update your employment details online, including if you are unemployed. The SLC will then determine whether you need to start making repayments. If you are, they will provide you with a repayment plan based on your earnings. If you are earning under the threshold, they may defer your repayments for 12 months. If you do not update your details, you will be expected to pay the fixed monthly repayment for the country you are living in, and you may be charged interest on your loan balance.
If you are transferring money from a non-UK bank account, you will need to use the following details:
- IBAN: GB37NWBK60708010027254
- SWIFT: NWBKGB2L
- NatWest Government Banking Team
- NatWest Customer Service Centre Brampton Road Newcastle-under-Lyme Staffordshire ST5 0QX
You will need to continue making repayments unless you provide evidence that your income is below the threshold. To ensure you are paying the correct amount, you should update your employment details each year. The repayment thresholds for each country are set annually on 6 April and are based on the Price Level Index (PLI), which measures the differences in the general price levels for each country. The exchange rates used to convert your salary to GBP are based on the average currency exchange rates for the most recent calendar year and are reviewed annually on 6 April.
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Return to the UK
If you are planning to return to the UK after having lived overseas, there are a few things you should know about your student loan repayments. Firstly, if you are returning to the UK for less than three months, you will continue to be treated as an overseas/ROI re-payer. This means you do not need to inform the Student Loans Company (SLC) about your temporary return.
However, if you plan to stay in the UK for more than three months, you must update the SLC about your change in circumstances. This includes providing them with your updated employment details and contact information. Failure to do so may result in penalties, such as building up arrears on your account, which you will have to repay even if your income falls below the repayment threshold.
When you return to the UK for more than three months, your repayment status will revert to that of a UK taxpayer. This means that your repayments will be calculated based on UK repayment thresholds and may be deducted directly from your salary through Pay As You Earn (PAYE). If you had made separate repayment arrangements directly with the SLC while overseas, you will need to cancel those and inform HMRC to avoid making overpayments.
To ensure you are repaying the correct amount, it is important to update your employment details each year. The rules for repayment are generally the same as when you were in the UK, but the repayment thresholds may have changed due to differences in living costs. You can check the repayment thresholds for your specific loan plan on the government website.
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Frequently asked questions
Yes, you do. However, your repayments will no longer be automatic, and you will have to contact the Student Loans Company (SLC) to sort out your repayment plan.
You will need to contact the SLC to determine your repayment plan. You will need to provide them with information on how you are supporting yourself financially, such as payslips or bank statements. The SLC will then calculate your repayment amount based on the repayment threshold for the country you are living in.
The repayment thresholds vary by country and are set once a year on 6 April. The threshold for each country is determined based on the Price Level Index (PLI), which measures the differences in the general price levels for each country. You can find the repayment threshold for your country on the government website.
To transfer money from a non-UK bank account, you will need the following details:
IBAN: GB37NWBK60708010027254
SWIFT: NWBKGB2L
NatWest Government Banking Team
NatWest Customer Service Centre
Brampton Road
Newcastle-under-Lyme
Staffordshire ST5 0QX
