Banks
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.
Income Tax
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 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.
Personal Allowance
The personal allowance before tax is due is currently £12,570 (an average £1,048 a month) for most people (as at April 2025).
Part-time or vacation work does not affect full-time student support.
National Insurance
National Insurance contributions will be deducted by your employer if you earn over £242 per week.
Universal Credit
Universal Credit is available to some groups of students, for example those with children or with a disability and classed as having limited capability for work. To avoid an overpayment, you should notify DWP that you are a full-time student, so they include your student finance income in their calculation.
When calculating entitlement the DWP only include the element of student finance awarded for general living costs as income. It disregards £4,461 (known as the Special Support element) of the Maintenance Loan, Parents Learning Allowance, the Childcare Grant, and also an amount for books and travel.
To find out whether you are eligible for Universal Credits you should contact the Department for Work & Pensions on 0800 328 5644 or find information online at www.gov.uk/universal-credit
Contact the Money Advice Service for advice or support via firstpoint by emailing firstpoint@worc.ac.uk or phone 01905 542551