Student Loan Plan (Plan 1/2/4/5)
The repayment plan a UK graduate sits on — determined by when and where they studied — which sets the income threshold and rate at which student loan deductions are taken from pay.
UK student loans are repaid through PAYE once income crosses a per-plan threshold. The plan a graduate sits on depends on when and where they started studying, and changes the threshold, the rate, and the cancellation horizon.
For 2026:
- Plan 1 (England/Wales pre-Sept 2012, NI all years): repay 9% above ~£24,990. Loan written off at age 65 or 25 years after the April you became eligible to repay.
- Plan 2 (England/Wales Sept 2012 – Jul 2023): 9% above ~£28,470. Written off 30 years after April first repayments due.
- Plan 4 (Scotland from 2007): 9% above ~£31,395. 30-year horizon.
- Plan 5 (England Aug 2023+): 9% above ~£25,000. Threshold frozen and term extended to 40 years — this is a materially more expensive plan over the lifetime than Plan 2.
- Postgraduate Loan: separate 6% deduction above ~£21,000, in parallel with the undergraduate plan.
Repayments stack: someone with Plan 5 and a Postgraduate Loan can be paying 15% above the plan threshold on top of income tax and NI. The deduction is taken from gross pay before pension salary sacrifice — so an employee can reduce student loan deductions by using salary sacrifice.
Use the student loan repayment calculator to compare plans and project the all-in cost over time.
Published 10 May 2026