To arrange an appointment with a Money Adviser, please email firstpoint or phone 01905 54 2551.
Banks, Benefits and Tax
You can open a student bank account in nearly all banks and these accounts offer interest-free overdraft facilities for most full-time students opting to have their student finance paid into them.
Shop around when choosing your bank, find out how soon you will be expected to clear your overdraft when you graduate and how much interest will be charged if you exceed your agreed overdraft limit.
Don't be tempted simply by the free gifts on offer.
Make sure that you do not go over your agreed overdraft limit otherwise you will incur expensive bank charges.
To help you decide, check out the student banking survey results on the Save the Student webpage.
You can also find information on the best student accounts on the Money Saving Expert's student bank accounts webpage.
When you are working whilst a full-time student your employer will ask you for a P45. If you have worked before commencing your studies you should have a P45 to give your new employer. If you do not have one, ask your employer to complete a starter checklist for HMRC (which replaced the P46) to ensure that you do not pay too much tax.
Keep records of holiday work and retain your P45 to pass on to your next employer.
If you work during term time, you will have to pay tax if you earn over the personal allowance in a week, even if you don’t expect to earn over your personal allowance over the financial year.
If you have more than one job but think that your total income is going to be less than your personal allowance ask HMRC to split your personal allowance between jobs so that you don’t pay tax.
The personal allowance before tax is due is currently £12,500 (an average £1,042 a month) for most people. Any over-deducted tax will be refunded to you later. If you think there may be an error in your tax deductions, and you want to make sure that the Inland Revenue has the correct details, you can complete a form P91 to ensure that you pay the correct amount.
Remember if you do pay too much tax you can claim it back from the tax office; your employer will have the address or you can apply online.
Employers are required to send a form P14 to HM Revenue and Customs at the end of the financial year to enable any overpaid tax to be refunded to you. If you know you’re only working for a short time, e.g. just the summer, then you can fill in a P50 to reclaim tax back. You need to wait four weeks after your last day at the job to make the claim.
For more information see HM Revenue and Customs website.
Part-time or vacation work does not affect full-time student support.
National Insurance contributions will be deducted by your employer if you earn over £183 per week.
Social Security Benefits
Students receiving means-tested benefits should note that up to £3,893 of the Maintenance Loan is disregarded by the Department for Work and Pensions when calculating income-related benefits. However the balance of the student Maintenance Loan is taken into account for means-tested benefit purposes during the period for which it is due, but not the summer break. Those students with an entitlement to Income Support should make sure that their payments are re-instated during the summer vacation.
The maximum amount of Maintenance Loan available to you will still be taken into account when calculating benefit entitlement, even if you choose not to take out the maximum loan.
Payments received from Student Finance England that are not for everyday living costs, but are for course related costs such as childcare grants, or help with books or travel, will be disregarded for benefits purposes, as will the Special Support Element of the Maintenance Loan.
HM Revenue and Customs disregards most student loans and grants for Tax Credit purposes.
Universal Credit will eventually take the place of income assessed benefits for most claimants under state pensionable age. They are available to some groups of students, for example those with children or with a disability and classed as having limited capability for work.
When calculating entitlement the DWP only include the element of student finance awarded for general living costs (Maintenance loan and Adult Dependent Grant) as income. It ignores the Special Support element of the Maintenance Loan, Parents Learning Allowance, the Childcare Grant, and disregards an amount for books and travel.
Currently Universal Credit is only awarded when a new claim for a means-tested benefit is made or an existing claimant has a change in circumstances such as leaving home and becoming a tenant for the first time, moving to a different Local Authority area, having a first child, becoming single or part of a couple. (Becoming a student will not count as a relevant change).
If you are already in receipt of income based benefits you are advised to seek advice from benefits specialists such as the Citizens’ Advice Bureau before submitting a claim for Universal Credits because they may not be as financially beneficial. If you submit a claim for Universal Credit it may cancel existing claims for old benefits such as Tax Credits and Housing Benefit.
For details visit the gov.uk webpage on Universal Credit and students.