PaychecklyUK Student Loan Plans Compared
Plan 1, Plan 2, Plan 4, Plan 5 and the Postgraduate Loan all repay differently. Here's which one you're on, how much comes out of your pay, and when each is written off — for the 2026/27 tax year.
The one rule that applies to every plan
UK student loan repayments are income-contingent. You repay a fixed percentage of everything you earn above a threshold — not a fixed monthly amount, and nothing at all on the income below the threshold. If your income drops below the threshold, repayments stop automatically.
The 2026/27 plans at a glance
| Plan | Who's on it | Threshold | Rate | Written off |
|---|---|---|---|---|
| Plan 1 | England/Wales pre-Sept 2012, and all Northern Ireland students | £26,900 | 9% | 25 years |
| Plan 2 | England/Wales, courses started Sept 2012 – July 2023 | £29,385 | 9% | 30 years |
| Plan 4 | Scotland | £33,795 | 9% | 30 years |
| Plan 5 | England, courses started from Aug 2023 | £25,000 | 9% | 40 years |
| Postgraduate | Master's & Doctoral loans (England/Wales) | £21,000 | 6% | 30 years |
Write-off periods run from the April after you finish or leave your course (or the April you were first due to repay). Thresholds are reviewed annually.
How much will actually come out of your pay?
The maths is the same for every 9% plan: (your salary − threshold) × 9%, divided by 12 for the monthly figure. Here's what a £35,000 salary looks like on each plan:
| Plan (on £35,000) | Annual repayment | Monthly |
|---|---|---|
| Plan 1 (£26,900 threshold) | £729 | £61 |
| Plan 2 (£29,385 threshold) | £505 | £42 |
| Plan 4 (£33,795 threshold) | £108 | £9 |
| Plan 5 (£25,000 threshold) | £900 | £75 |
| Postgraduate (£21,000, 6%) | £840 | £70 |
Notice that the plan you're on matters more than the balance you owe. Two graduates earning £35,000 can repay wildly different amounts purely because of when and where they studied. Plan 4 (Scotland) has the highest threshold, so Scottish graduates repay the least at this salary.
The plans in detail
Plan 1 — the original
For English and Welsh students who started before September 2012, and all Northern Irish students regardless of start date. Threshold £26,900, repay 9% above it, written off 25 years after you were first due to repay.
Plan 1 interest is the lower of RPI or the Bank of England base rate plus 1% — historically much lower than Plan 2, which makes Plan 1 one of the cheaper loans to carry.
Plan 2 — the "£9k fees" generation
For English and Welsh students who started university between September 2012 and July 2023 — the cohort that paid up to £9,250/year in tuition. Threshold £29,385, repay 9% above it, written off after 30 years.
Plan 2 carries the highest interest (RPI up to RPI + 3%, depending on income), so balances grow fast. But because of the high threshold and 30-year write-off, most Plan 2 graduates never repay the full amount — meaning the interest rate is often irrelevant to what you actually pay.
Plan 4 — Scotland
For students who took out loans through the Student Awards Agency Scotland (SAAS). It has the highest repayment threshold of any plan at £33,795, so Scottish graduates repay less than their counterparts elsewhere at the same salary. Repay 9% above the threshold, written off after 30 years.
Plan 5 — the newest plan
For English students starting courses from August 2023 onwards. Threshold £25,000 — the lowest of the undergraduate plans, meaning you start repaying earlier and at a lower salary. Repay 9% above it, but the write-off period is extended to 40 years.
The lower threshold plus the longer term means Plan 5 graduates will, on average, repay more over their lifetime than Plan 2 graduates — many will repay their loans in full.
Postgraduate Loan
A separate loan for Master's and Doctoral study in England and Wales. Threshold £21,000 — the lowest of all — and a lower rate of 6% rather than 9%. Written off after 30 years.
Crucially, the Postgraduate Loan sits alongside any undergraduate loan, not instead of it. If you have both, you pay both at the same time (see below).
If you have two loans at once
Plenty of graduates hold an undergraduate loan (Plan 2 or 5) and a Postgraduate Loan. In that case both are collected through PAYE simultaneously, each against its own threshold:
Plan 2: (£40,000 − £29,385) × 9% = £955/year
Postgraduate: (£40,000 − £21,000) × 6% = £1,140/year
Combined: £2,095/year (~£175/month) — an effective 15% on income above the higher threshold. This is a big chunk of take-home that many people forget to factor into a job offer.
Should you overpay your student loan?
For most graduates, no — and this is the single most common mistake. Because the loan is written off after 25–40 years and only repaid as a percentage of income, overpaying only benefits you if you're a high earner who would otherwise clear the entire balance (plus interest) before the write-off date.
If you'll never repay the full balance — which is the majority of Plan 2 and Plan 5 graduates — overpaying is simply handing money to the government that you'd never have paid anyway. That money is almost always better directed into a pension or ISA. Run your own numbers before voluntarily overpaying.
Key things people get wrong
- It doesn't affect your credit score. Student loans don't appear on credit files and don't directly affect mortgage applications — though the monthly repayment does reduce the disposable income lenders assess.
- You don't choose your plan. It's set by where and when you studied. You can't switch to a cheaper plan.
- Repayments pause below the threshold. Take a career break, go part-time, or earn under the threshold, and repayments stop automatically — they're not in arrears.
- Bonuses are caught too. A one-off bonus that pushes a single month's pay above the monthly threshold equivalent will trigger a repayment that month, even if your annual salary is below the threshold.
To see exactly how your student loan plan changes your monthly take-home alongside tax, National Insurance and pension, use the calculator — it supports all five plans.
Calculate my take-home with student loan ›General information about UK student loan repayment for the 2026/27 tax year, not personal financial advice. Thresholds and interest rates are reviewed annually by the government — always check the latest figures on gov.uk. The decision to overpay depends on your individual earnings outlook; consider speaking to a financial adviser.