UK Student Loan Repayments: Plan 1, 2, 4, 5 and Postgraduate Explained
Which student loan plan you are on, the repayment thresholds, how much comes out of your pay each month at £28k, £35k and £50k, when the loan is written off and whether overpaying makes sense.
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The short answer
UK student loans are repaid as a percentage of your income above a threshold, collected through payroll like Income Tax and National Insurance. Undergraduate loans cost 9% of earnings above your plan's threshold; Postgraduate Loans cost 6% above £21,000. The balance you owe does not change the monthly amount — only your pay does — and whatever is left is written off after 25 to 40 years depending on the plan.
To see what your salary leaves you after Income Tax and NI, use the UK salary calculator, then subtract the student loan figure from this guide.
Which plan are you on?
| Plan | Who has it | Rate | Written off |
|---|---|---|---|
| Plan 1 | English or Welsh courses started before 1 September 2012; all Northern Ireland loans | 9% | Usually 25 years after first due to repay (some older loans at 65) |
| Plan 2 | English or Welsh courses started 1 September 2012 – 31 July 2023 | 9% | 30 years after first due to repay |
| Plan 4 | Scottish student loans | 9% | 30 years (some older loans at 65) |
| Plan 5 | English courses started on or after 1 August 2023 | 9% | 40 years after first due to repay |
| Postgraduate Loan | Master's and doctoral loans (England and Wales) | 6% | 30 years after first due to repay |
You can confirm your plan in your online student loan account or on your payslip, which shows the plan type next to the deduction.
Repayment thresholds
Thresholds are set each tax year. For 2026/27 they are:
| Plan | Annual threshold | Monthly threshold | Weekly threshold |
|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | £517 |
| Plan 2 | £29,385 | £2,448 | £565 |
| Plan 4 | £33,795 | £2,816 | £649 |
| Plan 5 | £25,000 | £2,083 | £480 |
| Postgraduate Loan | £21,000 | £1,750 | £403 |
Plan 1, Plan 2 and Plan 4 thresholds are normally reviewed each April; GOV.UK always shows the figures for the current tax year.
How much you repay: worked examples
Annual repayments using the 2026/27 thresholds. Divide by 12 for the monthly deduction.
| Salary | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgraduate |
|---|---|---|---|---|---|
| £28,000 | £99 (£8/mo) | £0 | £0 | £270 (£23/mo) | £420 (£35/mo) |
| £35,000 | £729 (£61/mo) | £505 (£42/mo) | £108 (£9/mo) | £900 (£75/mo) | £840 (£70/mo) |
| £50,000 | £2,079 (£173/mo) | £1,855 (£155/mo) | £1,458 (£122/mo) | £2,250 (£188/mo) | £1,740 (£145/mo) |
The formula is simply (salary − threshold) × 9% for undergraduate plans, or × 6% for a Postgraduate Loan. For take-home pay after tax and NI at these salaries, see £35,000 after tax and £50,000 after tax.
Repayments are worked out each pay period
Your employer applies the monthly or weekly threshold, not the annual one. If your pay jumps in one month — overtime, a bonus — you can repay that month even if your annual salary is below the threshold. If you end the tax year having earned less than the annual threshold, you can ask the Student Loans Company for a refund.
Your real marginal rate
Student loan repayments sit on top of Income Tax and National Insurance, so they raise your marginal rate. For 2026/27 in England, Wales and Northern Ireland:
- Basic-rate taxpayer above your threshold: 20% Income Tax + 8% NI + 9% student loan = 37% on each extra pound.
- Higher-rate taxpayer: 40% + 2% + 9% = 51%.
- With a Postgraduate Loan as well: add another 6%.
This is one reason salary sacrifice into a pension can be attractive for graduates — it reduces the earnings that student loan repayments are calculated on. Our UK tax bands guide explains the Income Tax and NI side in detail.
Salary sacrifice and student loan repayments: an example
Suppose you earn £40,000, are on Plan 2 and pay 5% (£2,000) into a pension through salary sacrifice. Your contractual salary falls to £38,000, so Income Tax, National Insurance and student loan repayments are all worked out on £38,000:
| No sacrifice | £2,000 salary sacrifice | |
|---|---|---|
| Pay used for deductions | £40,000 | £38,000 |
| Plan 2 repayment (2026/27 threshold £29,385) | £955 | £775 |
| Income Tax + NI saved | — | £560 (20% + 8% of £2,000) |
| Student loan saved | — | £180 |
| Pension contribution | £0 | £2,000 |
The £2,000 in your pension costs you only about £1,260 in take-home pay. If your loan will be written off before you repay it in full, the £180 lower student loan repayment is a genuine saving rather than a delay.
How it shows on your payslip and P60
Your payslip lists the student loan deduction separately from Income Tax and National Insurance, usually labelled with the plan type, for example "SL Plan 2" or "PGL". Your P60 at the end of the tax year shows the total student loan deductions for the year. These figures are sent to the Student Loans Company through HMRC, so your online account can take a few weeks to show the latest payments. If your employer is deducting for the wrong plan, ask payroll to correct it — the Student Loans Company sends employers the plan type through HMRC.
Plan 2 vs Plan 5: what changed for newer students
Students starting English courses from August 2023 moved to Plan 5. Compared with Plan 2, the threshold is lower (£25,000), interest is lower (RPI only, no extra percentage points) and the write-off period is longer (40 years instead of 30). In practice that means Plan 5 borrowers start repaying sooner, repay for longer, and are more likely to repay the loan in full — while lower interest means the balance grows more slowly. For anyone earning a middle income across their career, total repayments on Plan 5 are usually higher than they would have been on Plan 2.
Earning close to the threshold
If your pay is just above the threshold, repayments are small: on Plan 5 at £26,000 you repay £90 a year, about £7.50 a month. Because the deduction is worked out on each pay period, a one-off overtime payment or bonus can trigger a repayment in that month even if your annual pay is below the threshold. You can claim that money back after the tax year ends if your total income for the year stayed under the annual threshold.
Interest
Interest is added to the balance but does not change your monthly repayment.
- Plan 1 and Plan 4: the lower of RPI inflation or Bank Rate plus 1 percentage point.
- Plan 2: RPI plus up to 3 percentage points depending on income (RPI + 3% while studying), subject to caps.
- Plan 5: RPI only.
- Postgraduate Loan: RPI plus 3 percentage points.
Student loans are not like other debt
A UK student loan behaves more like a graduate tax than a bank loan. It does not appear on your credit file, missed repayments cannot happen while you are on PAYE because payroll takes them automatically, and the monthly amount depends only on your income — not on the balance or the interest rate. A larger balance only matters if you are likely to repay in full before the write-off date. Mortgage lenders do, however, count your monthly student loan deduction when they assess affordability, because it reduces your take-home pay. Repayments stop when you earn below the threshold, for example during a career break or parental leave, and restart automatically when your pay rises again.
Self-employed and other cases
If you are self-employed, repayments are collected through your Self Assessment tax return, based on your total income above the threshold. If you move abroad you must tell the Student Loans Company and repay on overseas thresholds. If you have two undergraduate plans (for example Plan 1 and Plan 2), you repay 9% above the lower threshold and it is split between them; a Postgraduate Loan is charged in addition.
Should you overpay?
Overpaying only saves money if you would otherwise repay the loan in full before it is written off. Many Plan 2 borrowers on average earnings will never clear their balance, so for them extra payments are money they would not have had to pay. Plan 5 borrowers repay for longer (40 years) from a lower threshold, so more of them are expected to clear the loan, and the case for overpaying is stronger for high earners. If you are unsure, putting the money into a pension or ISA keeps your options open.
Checklist
- Confirm your plan on your payslip or student loan account.
- Check this year's threshold on GOV.UK.
- Use the UK salary calculator for take-home after tax and NI, then subtract 9% (or 6%) of pay above the threshold.
- Ask for a refund if you repaid in a year when your total income was below the annual threshold.
- Think twice before overpaying a Plan 2 loan.
Frequently asked questions
How much student loan do I repay each month?
9% of your earnings above your plan’s threshold (6% above £21,000 for a Postgraduate Loan), worked out each pay period. On £35,000 a Plan 5 borrower repays about £75 a month.
Which student loan plan am I on?
Plan 1 for English or Welsh courses started before September 2012 and all Northern Ireland loans; Plan 2 for English or Welsh courses started from September 2012 to July 2023; Plan 4 for Scottish loans; Plan 5 for English courses started from August 2023.
When is a student loan written off?
Usually 25 years after you were first due to repay for Plan 1 (some older loans at age 65), 30 years for Plan 2, Plan 4 and Postgraduate Loans, and 40 years for Plan 5.
Is student loan repayment taken before or after tax?
It is calculated on gross earnings, the same as National Insurance, and taken through payroll alongside Income Tax and NI. It does not reduce your taxable income.
Should I overpay my student loan?
Only if you expect to clear it before it is written off. Many Plan 2 borrowers will never repay in full, so overpaying can be money they would never have had to pay.
What if I have two student loans?
With two undergraduate plans you repay 9% above the lowest threshold, split between them. A Postgraduate Loan is charged on top, so you can repay 9% plus 6% at once.
Sources
Estimates for general information only — not tax, legal or financial advice. Check your payslip, employer or a qualified adviser before acting.
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