Important to know: This guide is for general information only and does not constitute tax advice. The Money & Housing Advice Service is not qualified to provide tax advice, interpret tax legislation, or advise on individual tax circumstances. If you need advice about your personal tax position, you should contact HMRC or seek assistance from a qualified tax adviser.
If you are about to graduate, looking for a new job may be challenging for a little while, so you need to know what your options are with respect to financial support and where you stand with bills and banking.
What will happen to my student overdraft when I complete my studies?
If you currently have an interest free overdraft, please be aware that it will not remain interest free forever. We advise that you check your terms and conditions for when interest will be applied and make plans to repay this once you are working.
Most banks offer a transition period from the end of study to starting work, before you have to start paying back your overdraft to avoid paying interest. This will differ from account to account and bank to bank so check directly your bank.
If you’re not sure how to start paying it back, Which have a great guide on how to manage this.
When will I start to pay back my student loans from the Student Loans Company (SLC)?
You would normally start to repay your student loan from the April after you complete your course. How much to you repay and how much interest you accrue, will depend on how much you are earning and which type of student loan you have (Plan 1, Plan 2 or Postgraduate Loan).
Most current students or those just graduating this year, will be on a Plan 2 loan.
If you started your course before September 2012 or your loan is from Northern Ireland or Scotland then you are on Plan 1.
Plan 2
Plan 2 loans will only be paid back once you earn over £25,725 a year, £2,144 a month or £495 a week. You pay back 9% of the amount over the threshold; for example, if your salary is £26,725 then you pay 9% of the £1000 that you are over the threshold so £90 per year.
The payment comes directly out of your payslip, like a tax, if you’re employed.
Self-employed graduates will need to tick the box on their tax return to indicate that they have a student loan and graduates working overseas will need to submit an ‘Overseas Income Assessment Form’.
You are gaining interest on your student loan while you are studying, at the rate of the UK Retail Price Index (RPI) plus 3%. Once you graduate, the interest will range from RPI to RPI plus 3% based on your income.
You can pay the SLC directly to make extra payments or pay off the loan in full at any time. This may save you money in the long run, by avoiding interest on the loan, but make sure this works with your budget as many essentials come before this when budgeting priorities.
Important to know: If you don’t pay off the whole loan within 30 years of starting repayments, the SLC normally writes-off the loan, meaning you no longer pay anything back.
Plan 1
This plan is different from Plan 2 loans in several ways. You have a Plan 1 loan if your course started before 1 September 2012 or anytime if your loan is from Northern Ireland or Scotland.
The repayments begin at a lower threshold, £18,935 a year, £1,533 a month or £354 a week. The repayments are still made as 9% of the amount over the threshold, e.g. a salary of £19,935 pays back 9% of the £1000 over the threshold, £90 per year. You pay the loan back using the same system as above, most people having it automatically taken out of their payslip.
Important to know: Another difference is that the interest rate on the loan is set every September. There is variation in getting the loan written off, so check based on your circumstances with the SLC. Full details and links for further information are available from UK.GOV.
Can I still receive money and housing advice from King's if I experience financial issues after I graduate?
The Money & Housing Advice team at King’s College London are happy to provide advice and information for up to 4 months after you complete your studies, but we may not be able to act on your behalf. If you do need an advocate, we can signpost you to relevant services.
Can I get support with my career plans?
King’s Careers & Employability will support you to get clear about your career plans and put these into action, including enabling you to navigate current changes in the employment market.
Find out more on the Careers website, where the services remain fully available online.
Important to know: You can continue to use the service for up to 2 years after you graduate.
Does graduating change how tax works?
No. Your tax liability doesn't change because you have graduated.
The same income tax rules, personal allowances, and National Insurance requirements apply whether you are a student, a graduate, or an established employee. What often changes after graduation is:
The amount you earn.
The number of income sources you have.
Whether you move into full-time employment.
Whether you receive income from more than one employer during the same tax year.
For example, you may have earned money through part-time work, graduate teaching, research assistance, or casual employment before starting a graduate role.
For a good overview of Tax and National Insurance see Money Helper: How Income Tax and the Personal Allowance works | MoneyHelper.
How is income tax usually collected?
Most employees pay tax through PAYE (Pay As You Earn).
Under PAYE:
Your employer deducts income tax directly from your salary.
National Insurance contributions are usually deducted automatically.
Deductions appear on your payslip.
Tax is paid to HMRC on your behalf.
For many graduates employed under PAYE, no additional action is required beyond checking payslips and ensuring information held by HMRC is accurate.
National Insurance Numbers
If you plan to work in the UK, you will generally need a National Insurance (NI) number.
Your NI number helps HMRC track your tax and National Insurance contributions and ensures your employer can report earnings correctly.
If you don't already have an NI number, information about obtaining one is available on the Government website:
Apply for a National Insurance number: Who can apply for a National Insurance number - GOV.UK
Read our article What is National Insurance (NI) and do I need it?
Understanding tax codes
A tax code tells your employer how much tax-free income you can receive before tax is deducted.
If HMRC has incomplete information about your circumstances, particularly when you start a new job, you may initially be assigned an emergency tax code.
This can happen if:
You begin a new job without a P45.
HMRC has not yet linked your employment records.
You have multiple employers.
In many cases, tax code issues are corrected automatically once HMRC receives updated information.
You should:
Check the tax code shown on your payslip.
Contact your employer if you think it may be incorrect.
Contact HMRC if concerns remain unresolved.
What if I have multiple jobs or sources of income?
Many graduates receive income from more than one source during the same tax year.
Examples include:
• Part-time student employment.
• Graduate Teaching Assistant (GTA) work.
• Research assistant roles.
• Casual university work.
• A graduate job after completing studies.
Having multiple income sources does not automatically mean you owe additional tax or need to complete paperwork, but it can make your tax situation more complex.
If you have concerns about how your earnings have been taxed, HMRC is best placed to review your individual circumstances.
Do I need to complete a self-assessment tax return?
Many employees who only earn income through PAYE do not need to complete a Self-Assessment tax return.
However, some individuals may be required to complete one because of their personal circumstances.
Whether you need to submit a return depends on factors such as:
The type of income received.
How income was paid.
Whether tax has already been deducted.
Other financial circumstances specific to you.
Because Self-Assessment requirements depend on individual circumstances, you should contact HMRC or a qualified tax professional if you are unsure.
What if I think something is wrong with my taxes?
If you are concerned about your tax position:
Review your payslips.
Check your tax code.
Ensure HMRC has your correct details.
Keep records of earnings from all employers.
Contact HMRC if you are unsure how your income should be treated.
Avoid making assumptions based on information from friends, colleagues, or social media, as tax circumstances can vary significantly between individuals.
Useful sources of information and support
HMRC: Income Tax Guidance
General information about income tax, PAYE, and allowances:
Income Tax: introduction: Overview - GOV.UK
HMRC: Self-Assessment
Information about tax returns and who may need to complete them:
Self Assessment tax returns: Overview - GOV.UK
HMRC Contact Information
For questions about your personal tax circumstances:
Contact HMRC - GOV.UK
Low Incomes Tax Reform Group (LITRG)
Plain English guidance designed for students, workers, and people on lower incomes:
Low Incomes Tax Reform Group | A voice for the unrepresentedTaxAid
Free support for eligible individuals who need help with tax issues:
I need help with tax - TaxAid
What else should I be doing to protect or understand my finances now that I am graduating?
The Money Advice Service has published Money Tips for Graduates, which we highly recommend along with information from Save the Student, Blackbullion, The Money Charity and the Financial Times.
We also recommend reading this guide on tax, covering taxes when you're student and then when graduate and start working: Tax Guides: Students