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Student Loan Plans 2026/27
| Plan | Threshold | Rate |
|---|---|---|
| Plan 1 | £26,900/year | 9% |
| Plan 2 | £29,385/year | 9% |
| Plan 4 (Scotland) | £33,795/year | 9% |
| Plan 5 | £25,000/year | 9% |
| Postgraduate Loan | £21,000/year | 6% |
If you have both an undergraduate plan and a Postgraduate Loan, you repay both simultaneously — 9% above the undergraduate threshold plus 6% above the postgraduate threshold.
Postgraduate Loan Repayments
A Postgraduate Loan (Master's or Doctoral) is repaid at 6% of income above £21,000 a year — a lower threshold and a lower rate than the undergraduate plans. It has its own separate threshold, so if you also hold a Plan 1, 2, 4 or 5 undergraduate loan the two run at the same time: 9% above the undergraduate threshold plus 6% above £21,000, which can add up to a combined 15% on the slice of salary above the higher threshold.
Should You Pay Off Your Student Loan Early?
For most graduates a UK student loan behaves more like a graduate tax than an ordinary debt. Repayments are a fixed percentage of income above a threshold, they pause automatically whenever income drops below it, and any balance still outstanding is written off after a set period — 25 years on Plan 5, up to 40 years on Plan 2 depending on when you started. Voluntary overpayment only helps if you are genuinely on track to clear the entire balance before that write-off date; otherwise the surplus usually does more in a pension or against higher-interest debt. Because the sums depend on your plan type, balance and expected earnings, take independent financial advice before overpaying a large amount.
Get Independent Financial Advice
The figure above is an estimate of what you're entitled to or what it costs you — deciding what to actually do with it (invest, overpay debt, top up a pension) is a bigger decision worth getting right.
- Received a redundancy payout: understand tax-free thresholds and how to make a lump sum work for you long-term.
- Planning parental leave: budget around the drop from full pay to statutory rate, and check what protections apply.
- Deciding whether to overpay a student loan: for many people investing the surplus outperforms early repayment — but it depends on your plan type and income trajectory.
- Reviewing pension contributions: small percentage changes compound significantly over a career.
An FCA-regulated independent financial adviser can model your specific numbers — free directories like Unbiased.co.uk match you with a local IFA.
Find an Independent Financial Adviser →Transparency & Methodology
Methodology & Sources
Figures are public HMRC/gov.scot/DWP rates. For your exact position, use gov.uk/estimate-income-tax.
Not Tax or Legal Advice
Information only. Consult the Chartered Institute of Taxation or an adviser via the FCA Register.
Open Source
Formulas are public. Inspect on GitHub.