Which plan you are on, what you repay, and the two things almost everyone gets wrong about UK student loans.
2026/27 thresholds
| Plan | Threshold | Rate | Who is on it |
|---|---|---|---|
| Plan 1 | £26,900 | 9% | Courses started before September 2012 in England or Wales, or any Scottish or Northern Irish course. |
| Plan 2 | £29,385 | 9% | Courses started between September 2012 and July 2023 in England or Wales. |
| Plan 4 | £33,795 | 9% | Scottish students funded by SAAS. |
| Plan 5 | £25,000 | 9% | Undergraduate courses started on or after 1 August 2023 in England. |
| Postgraduate Loan | £21,000 | 6% | Master's and doctoral loans. Repaid alongside — not instead of — any undergraduate plan. |
The two things people get wrong
1. A postgraduate loan stacks on top
It is not instead of your undergraduate plan — it is as well as. Someone on Plan 2 with a master's loan repays 9% above £29,385 and 6% above £21,000. Once income clears both thresholds that is 15% of the top slice of their salary going to loans alone, on top of income tax and National Insurance.
On £50,000, a Plan 2 borrower with a postgraduate loan repays £3,595 a year against £1,855 without it.
2. It is 9% of the excess, not of everything
You repay 9% of what you earn above the threshold, not 9% of your whole salary. On Plan 2 at £30,000 that is 9% of £615 — £55 for the year, about £5 a month. Each plan's repayment is also rounded down to whole pounds, which is why a small pay rise sometimes changes nothing at all.
What you would repay
| Salary | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Plan 2 + postgrad |
|---|---|---|---|---|---|
| £25,000 | £0 | £0 | £0 | £0 | £240 |
| £30,000 | £279 | £55 | £0 | £450 | £595 |
| £40,000 | £1,179 | £955 | £558 | £1,350 | £2,095 |
| £50,000 | £2,079 | £1,855 | £1,458 | £2,250 | £3,595 |
| £70,000 | £3,879 | £3,655 | £3,258 | £4,050 | £6,595 |
Which plan am I on?
- Plan 1 — English or Welsh course started before September 2012, or any Scottish or Northern Irish student.
- Plan 2 — English or Welsh course started between September 2012 and July 2023. Its threshold is frozen at £29,385 from April 2027 to April 2030.
- Plan 4 — funded by the Student Awards Agency for Scotland. The most generous threshold at £33,795.
- Plan 5 — English course started on or after 1 August 2023. The threshold is fixed at £25,000 with no inflation link, and the loan runs for 40 years rather than 30.
- Postgraduate Loan — a master's or doctoral loan, repaid alongside the above.
If you are unsure, sign in to your Student Loans Company account, or check your payslip: the deduction line normally names the plan.
Should I pay it off early?
Usually not, and the reason is that a student loan does not behave like a debt. It is closer to a graduate tax: repayments are a fixed share of income above a threshold, they stop if your income falls, and the balance is written off after 30 years (40 for Plan 5) whether or not it is paid.
Many borrowers — particularly on Plan 2 with a large balance and a middling income — will never clear it, so overpaying simply hands money to the government that would otherwise have been written off. Overpaying only helps if you are genuinely on track to repay in full before write-off, which mainly means high earners with modest balances.
It also does not appear on your credit file and does not directly affect mortgage approval, though the repayments do reduce the disposable income a lender assesses. See how much that costs you.
Salary sacrifice reduces repayments
Student loan deductions are based on the same earnings figure as National Insurance, so salary sacrifice pension contributions reduce them. Net pay and relief-at-source contributions do not. On a Plan 2 loan that is a further 9% saving on whatever you sacrifice. How the arrangements differ.