UK Student Loan Repayment 2026:Plans, Rates & Calculator
Finance · United Kingdom 🇬🇧 · Student Loans 2026
UK Student Loan Repayment 2026: Plans, Rates & Calculator
UK student loan repayment 2026 rules are critical if you have a Plan 1, 2, 4, 5 or Postgraduate loan. Somewhere between your payslip and your bank account, your employer quietly deducts a student loan repayment every month. Many graduates don’t know which plan they’re on, what interest they’re being charged, or whether the number being taken is actually correct. A significant number overpay — and in 2023‑24 alone, over £23 million in overpayments went unclaimed.
This guide covers every UK student loan plan for 2026: the correct repayment thresholds (verified against GOV.UK), current interest rates, write‑off dates, and the question most graduates get wrong — whether making voluntary overpayments ever makes sense.
UK Student Loan Repayment 2026 at a Glance
The 2025‑26 tax year (6 April 2025 – 5 April 2026) features these key rules. From April 2026, the Plan 2 threshold rises to £29,385 and Plan 5 repayments begin. Whether you’re on Plan 1, 2, 4, 5 or a Postgraduate loan, understanding your UK student loan repayment 2026 obligations helps you budget correctly.
Which Plan Are You On?
Your loan plan is determined by when and where you started your course — not when you took out the loan or when you graduated. You can’t choose your plan. Here’s how to identify yours:
| Plan | Who Is On It | Course Start Date |
|---|---|---|
| Plan 1 | England/Wales students (pre-2012) or any Northern Ireland student | Before 1 September 2012 (Eng/Wales) | Any year (NI) |
| Plan 2 | England and Wales undergraduate students | 1 September 2012 – 31 July 2023 |
| Plan 4 | Scottish students | From 1998 onwards in Scotland |
| Plan 5 | England undergraduate students (new system) | On or after 1 August 2023 |
| Postgrad (Plan 3) | Master’s or Doctoral loan borrowers | Postgraduate courses from 2016 onwards |
If you studied in Wales and started after September 2012, you may be on Plan 2 or have a Welsh‑specific loan — check with Student Finance Wales. If you have multiple loans (e.g., an undergraduate Plan 2 loan and a Postgraduate loan), you make repayments on both simultaneously: 9 % above the Plan 2 threshold plus 6 % above £21,000. That’s a potential 15 % deduction on the relevant income band.
All 5 Plans — Thresholds, Rates & Write‑Off 2025‑26
Calculate Your Student Loan Repayments — Free
Select your plan, enter your salary, and see exactly how much you repay monthly and annually — and how it affects your take‑home pay.
Use the Free Calculator →Complete Plan Comparison Table 2025‑26
All figures confirmed against GOV.UK official student loan terms and conditions 2025‑26 and House of Commons Library research briefing CBP‑10654.
| Feature | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgrad |
|---|---|---|---|---|---|
| 2025-26 Threshold | £26,065 | £28,470 | £32,745 | £25,000 | £21,000 |
| Repayment Rate | 9% | 9% | 9% | 9% | 6% |
| Interest Rate (Sept 25) | 3.2% | 3.2%–6.2% | 3.2% | 3.2% | 3.2%–6.2% |
| Write-off Period | 25 years | 30 years | 30 years | 40 years | 30 years |
| Write-off starts | Apr after first eligible | Apr after first eligible | Apr after first eligible | Apr after first eligible | Apr after first eligible |
| Interest while studying | 3.2% | 6.2% (RPI+3%) | 3.2% | 3.2% (RPI only) | 6.2% (RPI+3%) |
| Threshold update method | RPI annually | RPI (from 2025) | RPI annually | Frozen to 2027 | Under review |
| First possible repayment | Apr after leaving | Apr after leaving | Apr after leaving | April 2026 | Apr after leaving |
How Repayment Is Calculated
The formula is the same for all plans: you pay 9 % of everything you earn above your plan’s threshold (6 % for postgraduate loans). Nothing on income below the threshold. This means crossing the threshold doesn’t suddenly make your whole salary subject to repayment — only the amount above it.
Repayments are collected via PAYE — the same system that handles income tax and NI. Your employer deducts the correct amount each payday and sends it to HMRC, who passes it to the Student Loans Company. If you’re self‑employed, you declare and pay student loan repayments through your Self Assessment tax return.
Interest Rates 2025‑26 — Explained Clearly
Interest rates update every September using the Retail Prices Index (RPI) from the previous March. The March 2025 RPI was 3.2 %, setting the base rate for September 2025 to August 2026. Plans 1, 4, and 5 charge a flat RPI rate. Plans 2 and 3 use a sliding scale based on your income.
For Plan 2 borrowers, the interest rate slides from 3.2 % (RPI only) when your income is below the repayment threshold, up to 6.2 % (RPI plus 3 %) when your income is above £49,130. Between those two income points, the rate rises proportionally with income.
While studying on Plan 2: interest is charged at the maximum rate of RPI plus 3 % — currently 6.2 % — regardless of income. This is the period when Plan 2 balances grow fastest. Plan 5 borrowers in study are charged only RPI (3.2 %), which is a meaningful improvement.
How Student Loans Affect Your Take‑Home Pay
This table shows how Plan 2 and Postgraduate loan repayments reduce monthly take‑home at common UK salaries. All amounts are per month.
| Annual Salary | Plan 1 Monthly | Plan 2 Monthly | Plan 4 Monthly | Plan 5 Monthly | Postgrad Monthly |
|---|---|---|---|---|---|
| £22,000 | £0 | £0 | £0 | £0 | £8 |
| £26,000 | £0 | £0 | £0 | £8 | £38 |
| £30,000 | £29 | £11 | £0 | £38 | £68 |
| £35,000 | £67 | £49 | £17 | £75 | £108 |
| £45,000 | £142 | £124 | £92 | £150 | £183 |
| £55,000 | £217 | £199 | £167 | £225 | £258 |
| £70,000 | £330 | £312 | £279 | £338 | £368 |
Monthly repayments rounded to nearest £1. Plan 5 repayments only apply from April 2026 onwards. Use the free student loan calculator for your exact monthly deduction.
Plan 5 — What’s Different and When Repayments Started
Plan 5 applies to everyone who started an undergraduate or Advanced Learner Loan course on or after 1 August 2023 through Student Finance England. It’s a substantially different deal from Plan 2 — better in some ways, worse in others.
How Plan 5 Differs From Plan 2
Better: interest rate. Plan 5 charges only RPI (currently 3.2 %) at all income levels — while in study and during repayment. Plan 2 charges up to RPI plus 3 % (6.2 %) for higher earners and all students while studying. The Plan 5 interest charge is significantly lower over the loan’s lifetime.
Worse: longer write‑off. Plan 5 loans are written off after 40 years, compared to 30 years for Plan 2. This means more graduates will repay in full before write‑off, contributing more to the system over a longer period.
Worse: lower repayment threshold. At £25,000, Plan 5’s threshold is £3,470 below Plan 2’s £28,470 for 2025‑26. Graduates on Plan 5 start making repayments at lower incomes than Plan 2 graduates with equivalent salaries.
Should You Make Voluntary Overpayments?
This is the question most financial guides get wrong. The answer depends entirely on whether you’re likely to repay your full balance before the write‑off date. And for most UK graduates, especially those on Plan 2, the answer to that underlying question is: probably not.
The Overpayment Decision — Two Very Different Outcomes
❌ Do NOT overpay if
You’re on Plan 2 with a large balance (£40,000+) and an average‑to‑good income. Government estimates suggest approximately 44 % of Plan 2 graduates never repay in full before 30‑year write‑off. If your loan will be cancelled anyway, voluntary overpayments just reduce what gets written off — you pay more in total and don’t benefit. Also avoid overpaying if you have higher‑interest debt, no emergency fund, or aren’t maximising your pension employer match.
✅ Consider overpaying if
You took out a small loan (say, £15,000), earn a high income (£70,000+), and your mandatory repayments will clear the balance well within the write‑off period. In this case, you will pay the full balance regardless — so reducing interest accrual makes sense. Plan 1 borrowers with a 25‑year write‑off and small balances are most likely to benefit from overpaying.
The key calculation: project your mandatory repayments over 30 years (or 40 for Plan 5) using realistic salary growth assumptions. If those mandatory repayments exceed your current balance plus projected interest, you’ll repay in full anyway — and overpaying just accelerates the timeline slightly. If the projected mandatory repayments don’t reach your balance before write‑off, every voluntary overpayment is money you’d have otherwise not paid.
What Changes From April 2026 (2026‑27 Tax Year)
| Plan | 2025‑26 Threshold | 2026‑27 Threshold | Change |
|---|---|---|---|
| Plan 1 | £26,065 | Increases with RPI | ↑ with RPI |
| Plan 2 | £28,470 | £29,385 | +£915 ↑ |
| Plan 4 | £32,745 | Increases with RPI | ↑ with RPI |
| Plan 5 | £25,000 | £25,000 (frozen) | No change until 2027 |
| Postgrad (Plan 3) | £21,000 | Under review | TBC |
The Plan 2 threshold increase to £29,385 in 2026‑27 was announced at the 2025 Autumn Budget. It will then be frozen for three years from April 2027 — meaning the threshold stays at £29,385 through 2027‑28, 2028‑29, and 2029‑30 for England borrowers. Welsh borrowers will not face this freeze, as the Welsh Government has said it won’t match the England freeze policy.
For a Plan 2 borrower on £35,000, the threshold increase from £28,470 to £29,385 reduces annual repayments by 9 % × £915 = £82.35 per year (£6.86/month) in 2026‑27.
5 Student Loan Mistakes That Cost Graduates Money
Not claiming overpayment refunds
In 2023‑24, over £23 million in student loan overpayments went unclaimed. You may have overpaid if: your income fell below the threshold during the year but repayments continued, you started a new job and your employer applied the wrong plan, or you were deducted on Plan 2 at the start of the year but your income ended below £28,470. Log into your SLC repayment account and check your repayment history against your actual income. Refund requests are made through the Student Loans Company online.
Giving your employer the wrong plan type
When you start a new job, you declare your student loan plan type on your starter checklist. Marking the wrong box means your employer deducts at the wrong threshold — either taking too much (if they use Plan 1’s lower threshold when you’re on Plan 2) or too little. Check your payslip against the correct monthly threshold for your plan within your first payslip.
Making voluntary overpayments without projecting repayment first
Thousands of Plan 2 graduates make voluntary overpayments every year on loans that will be written off anyway. Before making any voluntary payment, project your mandatory repayments over 30 years. If they don’t add up to your current balance, voluntary payments reduce the amount cancelled — you’re paying more in total. The calculator can model both scenarios.
Not checking your balance annually
Your student loan balance changes each year — mandatory repayments reduce it, interest increases it. Some Plan 2 borrowers who graduated in 2012‑2016 saw their balances increase faster than their repayments reduced them during high‑inflation years when interest briefly hit 12 % in 2022. Log into your SLC account once a year to see your actual balance trajectory.
Confusing Plan 5 eligibility with Plan 2 rules
Plan 5 borrowers could not start making repayments before April 2026. If you started your course after August 2023 and saw student loan deductions before April 2026 on your payslip, you were deducted in error. This happens when employers misidentify the plan type on their payroll. Contact HMRC and your employer’s payroll team — you’re entitled to a full refund of any pre‑April 2026 Plan 5 deductions.
Pro Tips on UK Student Loans
Frequently Asked Questions
Final Notes
The UK student loan system is unlike any other debt. You only repay when you earn above the threshold. The balance doesn’t affect your credit score. And for many borrowers, particularly those on Plan 2 with larger balances, the loan functions more like a graduate tax — you pay 9 % above the threshold for 30 years and the remainder is cancelled.
Three things worth doing today. First, log into your SLC account and check your actual balance and write‑off date — many graduates haven’t done this since leaving university. Second, verify your monthly deduction against the correct threshold for your plan. And third, if you’re on Plan 5 and your payslip showed deductions before April 2026, contact HMRC for a refund.
Use the calculator for your exact monthly repayment figure — it matters for budgeting, mortgage applications, and deciding whether voluntary overpayments ever make sense for your specific situation.
Calculate Your UK Student Loan Repayments — Free
Select your plan, enter your salary, and see your exact monthly deduction, annual repayment, and take‑home pay impact — for 2025‑26 and 2026‑27.
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