STUDENT LOANS UK EXPLAINED: Should You Pay Off Early? 2023
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Күн бұрынSTUDENT LOANS UK: This is a COMPLETE GUIDE to Student Loans in England. We share how the student loan system works. We cover the potential impact of Salary Repayment Threshold Changes 2022 and whether to Pay Off Student Loans Early or Not. Please LIKE this video if you enjoyed it 😀
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MARY:
I'm married to Ken and we have two boys aged 8 and 6. I'm a Londoner, born in Hackney! :)
Day to day, I run the operations of The Humble Penny as a creative - doing everything from marketing to video editing. I studied Multi-media design and technology at Uni.
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I'm a husband to Mary and daddy first and foremost.
Former CFO by day with over 12 years experience in the investment business. I'm a Chartered Accountant and hold an MBA from Cambridge University.
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★★ TIME STAMPS ★★
0:00 - Intro to Student Loans guide
2:50 - PART 1: STUDENT LOAN SYSTEM EXPLAINED
2:54 - How much does it cost to go to Uni on a 3-year course in England?
5:38 - How Do They Decide How Much Maintenance Loan You Get?
7:03 - What determines how much of your student loans you’ll ACTUALLY pay back?
8:50 - Examples of how much you actually pay back in Student Loans?
10:53 - When do Student Loans get written off?
12:54 - How Do You Repay The Maintenance Loans?
13:17 - What Percentage of People Pay Off ALL Their Student Loan Debt + Maintenance Loan + Interest within 30 years?
15:20 - How Do Tax & Student Loan Payments Differ For Graduates vs Non-Graduates?
18:03 - How Does The Change To National Insurance Affect Take Home Pay?
20:33 - What Interest Rates Do You Pay On Student Loans?
21:35 - Is Going To Uni With a Student Loan Worth It?
25:25 - PART 2: SALARY THRESHOLD CHANGES
25:27 - Impact Of Reducing The Salary Threshold To Repay Student Loan?
27:10 - PART 3: PAY OFF EARLY OR NOT?
27:12 - Should You Pay Back Your Student Loan Early?
34:23 - Question for comments
Best, Ken and Mary
#studentloans #studentloansuk #debt
★★ WHAT THIS VIDEO IS ABOUT★★
STUDENT LOANS UK EXPLAINED: Should You Pay Off Early? | Repayment Threshold CHANGES 2021
@TheHumblePenny 2 жыл бұрын
This was a tough video to make. Please LIKE and SHARE with one other person :). What other questions do you have about Student Loans?
@TheAlexis123987 2 жыл бұрын
Finally, a channel that discusses student loans in the UK !!! That 9k a year was worth it. I enjoyed learning and enjoyed having 4 years to learn so many different things. Studying Engineering was one of the best things I did. It was hard and I struggled financially but I made the most amazing friends, had so much fun, improve the way I solved problems and gain me so much confidence. Lost confidence in the first year because of the workload and financially strain(balancing a job and uni is so hard) but by 4th year, I was stronger. After 3 years of working as a consultant and a year of running a startup, I would do university all over again.
@TheHumblePenny 2 жыл бұрын
😊🙏🏽.Please share with others
@bartekdgpl 2 жыл бұрын
Since people don’t know their income, inflation rate, and possible changes in the repayment schemes for the next 30 years in advance, the question “should I overpay my student loan” is usually impossible to answer except after the fact. And it was made this way on purpose because it gives all the power to make adjustments to the government and none to the people.
@TheHumblePenny 2 жыл бұрын
Hi Bartek You have a fair point. The necessary inputs favour the powers that be. However, for the 1 in 5 people who are more likely than not going to become and remain high earners, making some sensible assumptions about these inputs is worthwhile.
@loma9326 2 жыл бұрын
Thank you so much for this amazing video! Always very detailed and helpful!
@TheHumblePenny 2 жыл бұрын
You're most welcome :). Please share with others
@asemotablessingtv3070 2 жыл бұрын
Great information, you have done a great job 👍
@user-yt9zs6tg4h 2 жыл бұрын
Ah perfect timing!
@TheHumblePenny 2 жыл бұрын
😊🙏🏽. Please share with others
@PreciousPromises101 2 жыл бұрын
Very informative. Thank you
@TheHumblePenny 2 жыл бұрын
Thank you 😀. Please share with others
@funmilolaabiola-kuti3787 2 жыл бұрын
Thank you so much for this educative video
@TheHumblePenny 2 жыл бұрын
You're most welcome, Funmilola. Please share with others :)
@toyosi_sho 3 ай бұрын
Fantastic video‼️
@TheHumblePenny 3 ай бұрын
Thank you 👍. Do share with others.
@ct3826 2 жыл бұрын
Finally a video that actually debunks SL! I had tons of questions that several videos did not answer and you guys managed to respond to every single one of my questions in one video! Well done gained another subscriber btw my goal in live is to be as classy as the lady ahah
@TheHumblePenny 2 жыл бұрын
Amazing 😊. Please share with others and huge thanks for subscribing.
@Bringon-dw8dx 2 жыл бұрын
My currently solution is finish my training and move abroad where the pay is significantly better! Finishing uni approximately 65-70k debt. I won’t even be paying off the interest until I’m on a significant wage :’)
@timewithruth 2 жыл бұрын
I am looking forward to watching this, as I have ask myself this question
@TheHumblePenny 2 жыл бұрын
It's a difficult question to have an exact answer on :)
@timewithruth 2 жыл бұрын
@@TheHumblePenny definitely, I had a watch and it was really helpful information! 😊
@catrionaduncan9034 2 жыл бұрын
Hi Ken/Mary, This video is so helpful. I'll be sharing it with family friends who have soon to be uni students. As someone under Plan 1- I took out a loan for one course, did the first year, switched unis so I have two notification letters from SLC- one from 2005 and then the subsequent year, for when I started at uni #2. Q-Should I pay off the remainder rather than wait until I'm grey and old?! Why should I pay more over time with interest?😉
@consciouslyawake6051 2 жыл бұрын
Thank you Ken and Mary even though I found this video seven months later, you both have really made my day by answering all the questions I was stressing about in regards to student loan. 😮💨 #⃣WhatARelieve!
@TheHumblePenny 2 жыл бұрын
Awww, that's amazing 😊
@Shayoyeye5223 2 жыл бұрын
Thanks Ken & Mary🙏🏾🙏🏾. You both always manage to tackle difficult/confusing topics. I was so confused when I started a new job in June & was asked if my student loan falls under Plan 1 or Plan 2. I got mine from 2001-2004. Unless I win the lottery, not sure I will be able to repay the loan 🤔
@TheHumblePenny 2 жыл бұрын
Thanks so much, Clara 😀. Please share with others. You're definitely Plan 1 :)
@puckishpixie 2 жыл бұрын
It would also be useful if you explained the different interest rates between plan 1 and 2. As plan one are RPI or bank of England base rate+1% (whichever is lower). Your video had me rushing to check about that extra 3%.
@TheHumblePenny 2 жыл бұрын
Ah, good shout 🙏🏽
@adrianwright8685 10 ай бұрын
If a student pays course fees of £9250/year then their final debt of £27750 will, at 10.1% (current rpi, 2023) accumulate £2803/year interest. To pay off this interest the £2803 will need to be 9% of their salary over £25,000. This means they will need a starting salary of £56,142 just to pay the interest; any less and their debt will be increasing every year. Borrowing to pay for accommodation and other costs might of course increase the debt considerably
@doodleesq 10 ай бұрын
I found this myself, having accumulated 25k of debt over the decade. Due to circumstances, I had to change universities and redo years, finally graduating in 2008. I've had steady jobs, etc, over the decade, but only recently has it become an issue - simply bc I'm now a higher earner....it hammers me. But it's the interest that gets me. Most folk never pay it off because whatever they pay, they never reduce the loan amount. I think in my case Im starting to consider paying it off in full. Any thoughts.
@sanjaymanu1 2 жыл бұрын
Fantastic video.. thanks for all the insight. Just one question , can the student pay a lump sump amount once he is 30 yrs old or more ?
@chrisbaker91 2 жыл бұрын
Great video for plan 2, I think the interest rates on plan 2 are extortionate, it seems like they only serve to make uni less accessible for those from lower income backgrounds. So while not everybody should go to uni when we have a massive skills shortage in other areas (see all the current issues). Uni still needs to be affordable so we don't end up with professions like Dr's, lawyers, teachers only coming from privileged background (I know not the topic of the video but fees and loans are linked to mobility in my mind). For anyone asking I would say Plan 1 should never pay off early as the most interest they would ever pay is the rate of inflation. So yes by not paying off early I lose £2-300 extra from my paycheck but at an interest rate of 1.1% the excess cash I have is better spent on other savings / investments or paying down mortgage etc.
@TheHumblePenny 2 жыл бұрын
Thank you, Christopher. Great contribution.
@Theduchesskimmy 5 ай бұрын
Well now the interest rate is 6.3 percent might be worth paying it off
@chrisbaker91 5 ай бұрын
@kimberlypetros8961 of I had about 6k left on my plan 1 middle of last year and I decided to pay off early as I had maxed accounts I could beat the interest and my "personal" rate of inflation is much lower than headline due to solar panels/ batteries and a long term cheap fixed mortgage. Sums were about equal but just getting rid of it and seeing saving increase via increased take home vs potentially drawing on savings when required and seeing it decrease thought just pay it off from a psychological aspect.
@zeztro 2 жыл бұрын
I think it's important to note that for people with plan 4 student loans in Scotland under the current rules the interest rate is significantly lower than for the rest of the UK. The Scottish student loan interest rate is pegged to either RPI or the Bank of England interest rate plus 1% (whichever is lower). This means that currently the interest rate is 1.1%. Given that RPI is about 3.8% at the moment (assuming your salary increases with inflation) then the value of your loan in real terms will actually be decreasing over time.
@TheHumblePenny 2 жыл бұрын
This is a very important point. We value your contribution.
@jimbojimbo6873 2 жыл бұрын
Im lost if its pegged to rpi + 1% Then how is it decreasing
@kat3400 Ай бұрын
Hey guys, have you ever done a video on if it’s worth paying off the uk post grad loans early. I’ve been trying to figure it out and it feel very complicated. I’d be really interested in hearing your opinion. X
@MrRoyck10 2 жыл бұрын
So sad for the generation of my son who has taken the route of university on both tuition and maintenance loan, apprenticeship is a more viable option. Effectively government have financially ruined generations of young citizens for degrees that are worthless in some cases. Thanks for beaming your financial search light on this topic.
@smia7130 2 жыл бұрын
Though ppl who are on low income and don't have to pay loan remember the interests are building up and it is most like over the 30 years period you will be paying the interest with high loans
@TheHumblePenny 2 жыл бұрын
This is a very good point.
@abrahamkamara3093 2 жыл бұрын
Hey, Ken and Mary just wondering if investment money can be emergency found? Because I invest in vanguard each month and I have a good amount there but no money in my saving as emergency money
@LatinArtemis Жыл бұрын
This is the first comment I ever put on a KZfaq video: thank you so so much!!!🙏
@TheHumblePenny Жыл бұрын
Diane, wonderful ❤️. Comment more often 🤗
@LatinArtemis Жыл бұрын
@@TheHumblePenny Well here is a second comment then 😂: Thanks for answering! Do you know if after the recent changes made this year debts still get cancelled after 30 years for plan 2 and not 40 years? Thanksss! 🙏
@williama-d6 2 жыл бұрын
From what you are saying their is no way I’ll be paying my student loan back yes it is a good idea to get student loans and go to uni
@Anil75987 2 жыл бұрын
Thank you for this video, but this video is catered for students on Plan 2. What about for Plan 1? Should we pay back the loan early?
@TheHumblePenny 2 жыл бұрын
The same principle would apply generally, although there are different repayment thresholds for Plan 1. If you don't mind me asking - Are you currently a high earner? How old are you? And how much do you owe?
@marupa1506 2 ай бұрын
Every where I go the perspective are same , they never talk about student loans and high earners , ie is it better to pay them off or not
@sadikicole3444 Жыл бұрын
Question re repayment : When you talk about income is this wage only or total income inclusive of salary, capital gains etc?
@sadikicole3444 Жыл бұрын
Is 9 percent deducted from all forms of income over the payment threshold? I ask as on the SLC website it says total income.
@OnlyTheTruth-ti9ex Ай бұрын
It's crazy am actually paying my student working in a role that had nothing to do with my degree.
@TheHumblePenny Ай бұрын
That is a crazy reality.
@samanthasavedbygrace8203 2 жыл бұрын
Been asking myself this question forever so thank you for breaking it down for us. Question I have is if I pay back all my student loan will my tax code change? I have a friend who this happened to and they ended up having to pay even more tax than they were before going on to regret paying off their student loan....
@TheHumblePenny 2 жыл бұрын
Your tax code typically changes when your earnings (or taxable income) change or your personal allowance changes. The issue that your friend experienced sounds like a timing difference and not a permanent issue. Or did it persist?
@ruthofori5058 2 жыл бұрын
Hi my name is Ruth, I love the content that you post on KZfaq. I don’t know if this is the right place to message you but I have online business which offers virtual assistance services, I have been trying to get more clients, would you do content on this topic any time soon?? Is there anyone you know who would need a VA?? Sorry for asking so many questions. I hope to hear from you soon x. Kind Regards Ruth
@bestymusic4845 Жыл бұрын
Hello I am currently studying a level 2 course and soon to be level 3. I was wondering is there any funding or loans I can get as I desperate need for a laptop and struggling with living costs. I also have really bad credit . Thanks
@KA-hw4ec Жыл бұрын
Thank you for this very informative video! Would it be possible to avoid repaying student loans if you become a business owner? 😂
@TheHumblePenny Жыл бұрын
Haha, that would be a neat exit 😄. Nope!
@maureenweah8228 11 ай бұрын
@TheHumblePenny this has been very helpful, thanks, is there a way to contact you if we have any further questions about this?
@angelwings1 2 жыл бұрын
My daughter has just started uni. Her course is 3 years and she only got a little over 5k due to my husbands wage. I’m having to help with her food while she looks for a job. Watching this with interest.
@angelwings1 2 жыл бұрын
I believe the 5k is maintenance btw Her rent will be 7k altogether 😟
@TheHumblePenny 2 жыл бұрын
Fascinating to hear your practical experience of what we shared in the video.
@TheHumblePenny 2 жыл бұрын
Oh dear.
@TheOpenmindStudio Жыл бұрын
So, what actually happens if you pay it off in full? If it just gets wiped off in 30 years anyway...? What's the benefit of paying it off.
@marcusnelson3520 Жыл бұрын
You pay less overall due to paying less in interest payments.
@act1460 2 жыл бұрын
When you say "high earner" by 30 do you mean those earning in excess of 100k? Or does that mean those earning between 50 to 100?
@TheHumblePenny 2 жыл бұрын
The latter.
@tania354 2 жыл бұрын
I'm a bit confused. I started uni in 2010 and finished in 2013. Am I under plan 1 or plan 2?
@TheHumblePenny 2 жыл бұрын
Plan 1
@tania354 2 жыл бұрын
@@TheHumblePenny thanks!
@hawaiitongie8671 2 жыл бұрын
I still know people who are in student loan when they have grandchildren. 😷
@TheHumblePenny 2 жыл бұрын
That's terrible
@osirisofthesouth2853 2 жыл бұрын
Ngl I want that 150£ deduction to stop right now 😂
@angelwings1 2 жыл бұрын
If you’re earning over the 27k + and repaying your loan each month, does it still get written off after 30 years?
@TheHumblePenny 2 жыл бұрын
Yes, if it's not yes paid off and assuming you started your degree after September 2012.
@angelwings1 2 жыл бұрын
@@TheHumblePenny thank you! My husband said otherwise, so wanted to check with the pro!
@bestymusic4845 Жыл бұрын
Thanks for the video. Is there any grants for students with bad credit In the UK?
@TheHumblePenny Жыл бұрын
Hmm not that I'm aware of 🤔
@hawaiitongie8671 2 жыл бұрын
I heard a over 50 yrs old woman work in the library still boosting they got degree for free in her time and still get good paid job still working. 😷 😟😖. Greedy and failure government never make sense. 😷
@mydog3627 2 жыл бұрын
can someone tldr me please?
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