Complete guide to UK student loan repayments when moving abroad. Notification requirements, overseas thresholds, and avoiding penalties.
Moving abroad is exciting, whether for career opportunities, lifestyle changes, or following a partner. But if you have UK student loans, leaving the country doesn't mean leaving your repayment obligations behind. The Student Loans Company has an entire overseas repayment system with different rules, thresholds, and enforcement mechanisms than the PAYE system you're used to in the UK.
The most critical thing to understand is the notification requirement. You must tell the Student Loans Company at least three months before you leave the UK. Failure to notify can result in penalties up to £1,000, and more importantly, it can cause serious administrative problems with your loan that take months or years to resolve. Many people assume their UK student loan simply pauses when they move abroad, or that the SLC will somehow know they've left. Neither is true.
What catches people off-guard is that repayment obligations continue based on your worldwide income, but calculated using country-specific thresholds that often differ from UK thresholds. Depending on where you move, you might pay more or less than you would in the UK on the same salary. And unlike PAYE which happens automatically through your employer, overseas repayments require you to actively report your income and make payments manually, creating administrative burden and opportunities for things to go wrong.
Understanding the overseas repayment system before you leave helps you budget accurately, stay compliant with requirements, avoid penalties, and ensure your loan status remains in good standing if you eventually return to the UK.
You're legally required to notify the Student Loans Company that you're leaving the UK to live or work abroad. The notification should happen at least three months before your departure date, though SLC accepts notifications with less notice if your move is urgent.
Log into your Student Loans Company account online, or call the overseas helpline on +44 141 243 3660 (if calling from abroad). You'll need to provide:
The SLC will send you information about your overseas repayment obligations specific to the country you're moving to, including the income threshold for that country and how to make payments.
The SLC can charge penalties up to £1,000 for failure to notify them about leaving the UK. But the financial penalty is often the least of your problems. If you don't notify:
Worse, if you're not in the overseas system properly, you can't access your loan information correctly, you might have problems returning to the UK later, and sorting out the administrative mess takes substantial time and effort.
The notification requirement isn't optional or a suggestion. It's a legal obligation that protects both you and the SLC. Take it seriously.
Once you're in the overseas repayment system, you're required to provide evidence of your income to the SLC annually. This differs fundamentally from UK PAYE, where your employer reports your income and deducts loans automatically.
Each year, you'll receive a request from the SLC to submit evidence of your income for the previous year. This typically includes:
The SLC uses this information to calculate your repayment obligation for the coming year. They convert your income to pounds sterling, apply the country-specific threshold, and determine your annual repayment amount.
The SLC assesses all your worldwide income, including:
Just like in the UK, you can't hide income by categorizing it differently. If you earn it and it's above the threshold, you owe repayments on it.
If you don't respond to income assessment requests, the SLC can make assumptions about your income based on average earnings in your country and profession. These assumptions are often high, potentially resulting in you being charged more than you actually owe. You'll then need to provide evidence after the fact to get reassessed, creating hassle.
Always respond to income assessment requests promptly with complete documentation. Our student loan calculator can help you estimate what you'll owe based on your overseas income.
Here's where overseas repayments get complicated. The threshold used to calculate your repayment isn't necessarily the UK threshold you're familiar with. The SLC sets different thresholds for different countries based on cost of living and average incomes in those locations.
The thresholds are meant to maintain rough equivalence to the UK system, but they don't always feel equivalent when you're living in the country.
Approximately £30,000 equivalent
Approximately £27,000 equivalent
Approximately £26,000 equivalent
Approximately £31,000 equivalent
Approximately £32,000 equivalent
Approximately £16,000 equivalent
Approximately £15,000 equivalent
Higher cost-of-living countries typically have higher thresholds, while lower cost-of-living countries have lower thresholds. The intent is that you have similar discretionary income after essential expenses regardless of location.
Someone earning £25,000 equivalent in London pays nothing (below UK threshold). That same person earning £25,000 equivalent in Bangkok might pay student loans because Thailand's threshold is lower. Yet £25,000 in Bangkok provides much higher living standards than £25,000 in London.
Earning £50,000 in New York might feel less comfortable than £35,000 in the UK due to costs, but you'd pay student loans based on the higher absolute number with minimal threshold adjustment.
Before accepting a job offer abroad, check the SLC threshold for that country. Calculate what you'll actually pay in student loans based on your expected income and that threshold. Factor this into your financial assessment of whether the move makes sense.
Your overseas income gets converted to pounds sterling for student loan calculations. The SLC uses periodic exchange rates, but these rates might not match the reality of your finances.
The SLC typically uses an annual average exchange rate or rates at specific points in the year. If you earn $60,000 USD, they'll convert this to pounds using their exchange rate to determine if you're above the threshold and calculate your repayment.
If exchange rates fluctuate significantly during the year, your actual experience might differ. If the pound strengthens against the dollar, your sterling-equivalent income appears lower than at the start of the year, potentially reducing what you owe. If the pound weakens, your sterling-equivalent income rises, increasing what you owe. You have limited control over this. The SLC applies their rates regardless of what exchange rate you actually experienced when converting your salary for living expenses.
When you make repayments, you typically pay in pounds sterling, which means you're converting currency potentially twice (your income to sterling for calculation, then sterling back to your currency for payment). Currency conversion fees can add 2-3% to your effective repayment cost.
Some payment methods minimize this. Direct debit from a UK bank account (if you maintain one) avoids conversion. International transfers often carry fees. Check the most cost-effective payment method for your situation.
The SLC offers two main payment methods for overseas borrowers:
If you maintain a UK bank account, you can set up direct debit to pay your calculated annual obligation in monthly installments. This is the most similar to the PAYE experience you had in the UK.
You can pay via bank transfer, check, or online payment. Payments can be made monthly, quarterly, or annually as you prefer.
Most people in stable employment abroad prefer direct debit for the convenience and automatic nature. Those with variable income or who've fully moved their financial life out of the UK often use manual payments.
The SLC has limited direct enforcement mechanisms against people living abroad, but that doesn't mean you can simply ignore your obligations without consequences.
The SLC cannot garnish wages abroad. Your overseas employer won't deduct student loans automatically. The SLC can't seize overseas assets easily or use UK enforcement mechanisms against you while you're non-resident.
This leads some people to simply stop paying, betting that enforcement is difficult. This is short-sighted for several reasons:
If you return to UK employment, PAYE deductions restart immediately. But you'll also owe all the accumulated unpaid amounts from your time abroad, potentially with interest and penalties. This can be thousands of pounds landing on you unexpectedly.
Even if you're not paying, interest accumulates. Your loan balance grows by thousands of pounds annually depending on your plan and balance. When write-off eventually happens (or if you return to UK), you've accumulated massive additional interest for no benefit.
Being out of compliance with SLC makes everything harder. Accessing your account information, updating details, or sorting out any issues becomes difficult. If you need any interaction with UK government systems, having student loan non-compliance can cause problems.
The SLC is increasingly working with international partners and credit agencies. Future enforcement might become more effective. Being in good standing now avoids potential problems as systems improve.
If you return to UK employment after living abroad, student loan deductions should restart automatically through PAYE. However, this doesn't always happen smoothly.
Your tax code might not include SL when you return, meaning no deductions happen. This creates underpayment that you'll owe later through Self Assessment or adjusted PAYE.
Solution: Check your first UK payslip carefully. If it doesn't show student loan deductions and you definitely have a student loan, contact HMRC immediately to update your tax code.
You might have paid your overseas obligation for the full year, then return mid-year and restart PAYE deductions, effectively paying twice for the overlap period.
Solution: Contact SLC when you return and explain you've already paid overseas. They should adjust your UK obligation to account for what you've already paid. Keep records of overseas payments.
If you didn't pay in full while abroad or have accumulated arrears, these don't automatically disappear when you return. HMRC might try to collect them through adjusted tax codes or you might receive direct demands from SLC.
Solution: Address any arrears before returning if possible. If you can't, contact SLC when you return to arrange payment plans.
Working abroad as a self-employed freelancer or consultant creates additional complexity. You're responsible for calculating your own income, converting it to sterling, determining your obligation, and paying it.
Important: You pay student loans on profit, not revenue. If you earn $80,000 but have $30,000 in legitimate business expenses, your profit is $50,000 and that's what gets assessed for student loans.
Keep meticulous records. The SLC might query your income assessment, and you'll need to provide evidence to support your declared income and expenses.
Some people abroad face a difficult decision: should they pay their student loans while overseas, given enforcement difficulties?
This is a personal decision. From a purely financial perspective, if you're genuinely never returning to the UK and enforcement is limited, not paying might save money in the short term. But it creates risks and complications. Most financial advisors recommend maintaining compliance unless you're absolutely certain you're never returning to the UK and comfortable with the ethical implications.
Keep comprehensive records of all overseas repayment activity:
If there are ever disputes about what you owe, when you paid, or whether you've met obligations, these records are essential to defend your position. Store them digitally in multiple locations (cloud storage, email to yourself) so they're accessible even if you move between countries multiple times.
Moving abroad doesn't eliminate student loan obligations, but it does make them more complicated. The shift from automatic PAYE deductions to manual overseas repayments requires active engagement and administrative discipline.
Use our Monthly Repayment Calculator to estimate what you'll owe based on your overseas salary and the country-specific threshold. Our plan-specific calculators help you understand your obligations for your particular loan type.
Moving abroad is exciting and offers tremendous opportunities. Don't let student loan complications overshadow that. But don't ignore them either. With proper notification, understanding of the system, and compliance with requirements, managing your UK student loan from overseas is straightforward, leaving you free to focus on making the most of your international experience.
UK Education Policy Specialist
With over 15 years of experience in UK education policy and student finance, Dr. Sharma founded Student Loan Calculator UK to help students navigate the complex world of student loans.