Tax

Student Loan Repayment Calculator UK 2026 — Plan 1, 2, 4, 5 Compared

Calculate your student loan repayments. Compare all plan types, thresholds, interest rates, and see when you'll pay off your loan.

By PocketWise · · 5 min read

Tax information is based on HMRC rules for the 2026/27 tax year. Tax rules can change — always verify current rates at GOV.UK. This is not tax advice. Consider consulting a qualified tax adviser for your personal situation.

Student loan repayments can be confusing with different plans and thresholds. Here’s how to calculate what you pay and understand your specific loan.

Student Loan Plans Compared

2026/27 Overview

Plan Who Threshold Rate Write-off
Plan 1 England/Wales (pre-2012), NI £24,990 6.25%* 25 years after first due
Plan 2 England/Wales (2012-2023) £27,295 RPI + 3%** 30 years after graduation
Plan 4 Scotland £31,395 6.25%* 30 years after graduation
Plan 5 England (from Aug 2023) £25,000 RPI only 40 years after graduation
Postgrad Loan Masters/PhD (2016+) £21,000 RPI + 3% 30 years

*Linked to Bank of England rate **Varies with income

Repayment Calculator

Repayment Formula

Monthly repayment = (Annual Salary - Threshold) × 9% ÷ 12

Plan 1 Repayments (Threshold: £24,990)

Salary Above Threshold Annual Repay Monthly Repay
£25,000 £10 £0.90 £0
£30,000 £5,010 £451 £38
£35,000 £10,010 £901 £75
£40,000 £15,010 £1,351 £113
£50,000 £25,010 £2,251 £188
£60,000 £35,010 £3,151 £263
£80,000 £55,010 £4,951 £413

Plan 2 Repayments (Threshold: £27,295)

Salary Above Threshold Annual Repay Monthly Repay
£28,000 £705 £63 £5
£30,000 £2,705 £243 £20
£35,000 £7,705 £693 £58
£40,000 £12,705 £1,143 £95
£50,000 £22,705 £2,043 £170
£60,000 £32,705 £2,943 £245
£80,000 £52,705 £4,743 £395

Plan 4 Repayments (Threshold: £31,395)

Salary Above Threshold Annual Repay Monthly Repay
£32,000 £605 £54 £5
£35,000 £3,605 £324 £27
£40,000 £8,605 £774 £65
£50,000 £18,605 £1,674 £140
£60,000 £28,605 £2,574 £215

Plan 5 Repayments (Threshold: £25,000)

Salary Above Threshold Annual Repay Monthly Repay
£26,000 £1,000 £90 £8
£30,000 £5,000 £450 £38
£35,000 £10,000 £900 £75
£40,000 £15,000 £1,350 £113
£50,000 £25,000 £2,250 £188

Interest Rates Explained

Plan 1 & 4 Interest

Based On Current Rate
Lower of RPI or BoE rate + 1% ~6.25%

Plan 2 Interest (Complex!)

Your Income Interest Rate
Below £27,295 RPI only (~4%)
£27,295-£49,130 RPI + 0-3% (sliding)
Above £49,130 RPI + 3% (~7%)

While studying: Always RPI + 3%

Plan 5 Interest

Based On Rate
RPI only ~4%

Plan 5 interest is capped at RPI — lower than Plan 2.

Will I Ever Pay Off My Loan?

Reality Check by Plan

Plan Typical Graduate Will They Pay Off?
Plan 1 £20k debt Often yes (lower debt)
Plan 2 £50-60k debt Most won’t fully
Plan 4 £15-30k debt Often yes (Scotland fees lower)
Plan 5 £40-50k debt Many won’t (40 year write-off)

Who Actually Pays Off Plan 2?

Career Type Starting Salary Lifetime Earnings Pays Off?
High-earning professional £50k+ £3m+ Likely yes
Average graduate £30k £1.5m Probably not
Public sector £25-35k £1.2m No

Institute for Fiscal Studies estimates ~80% of Plan 2 borrowers never fully repay.

When Is Write-Off?

Write-Off Rules

Plan Written Off
Plan 1 (pre-2006) Age 65 or 25 years after first repayment
Plan 1 (2006-2012) 25 years after first repayment due
Plan 2 30 years after first repayment due
Plan 4 30 years after first repayment due
Plan 5 40 years after first repayment due
Postgrad Loan 30 years after first repayment due

What “Written Off” Means

Effect Detail
Balance disappears No further payments required
No tax implication Unlike some debts
Doesn’t affect credit Student loans don’t appear on credit report

Should I Repay Early?

General Rule: Don’t Repay Early

Reason Explanation
Loan may be written off Why pay more than necessary?
Low effective interest Only pay while earning above threshold
Better uses for money Pension, ISA, mortgage
No credit impact Student loans don’t affect credit score

When Early Repayment Makes Sense

Situation Why Repay
Very high earner (£100k+) Will pay off anyway, stop interest
Small balance remaining Clean slate
Emigrating permanently May have to repay anyway
Mortgage maximisation Some lenders count SL as debt

Early Repayment Calculator

Should you pay off a £30,000 Plan 2 loan?

Scenario Lifetime Repaid Outcome
Average salary (£40k) ~£35,000 Overpaid by £5k
High salary (£80k) ~£50,000+ Should pay off early
Low salary (£30k) ~£15,000 Would have wasted £15k

Multiple Loans

If You Have Multiple Plans

Combination How Repayments Work
Plan 1 + Plan 2 9% on each threshold (18% above both!)
Plan 2 + Postgrad 9% Plan 2 + 6% Postgrad (15% total)
Any + Postgrad Postgrad adds 6% above its threshold

Example: Plan 2 + Postgrad Loan

Salary: £50,000 Plan 2 Postgrad Total
Threshold £27,295 £21,000
Above threshold £22,705 £29,000
Rate 9% 6%
Annual repayment £2,043 £1,740 £3,783

Postgrad loans add £1,740/year on a £50k salary.

Impact on Take-Home Pay

£40,000 Salary Example

Plan Gross Tax NI SL Take-Home
No loan £40,000 £5,486 £2,794 £0 £31,720
Plan 1 £40,000 £5,486 £2,794 £1,351 £30,369
Plan 2 £40,000 £5,486 £2,794 £1,143 £30,577
Plan 4 £40,000 £5,486 £2,794 £774 £30,946
Plan 5 £40,000 £5,486 £2,794 £1,350 £30,370

Self-Employed Repayments

How It Works

Feature Detail
When calculated Self Assessment tax return
Based on Profit above threshold
When paid With tax bill (January 31)
Payments on account May apply

Example: Self-Employed, Plan 2

Profit Above £27,295 Repayment
£30,000 £2,705 £243
£50,000 £22,705 £2,043

Student Loan and Mortgages

How Lenders View It

Lender Approach Impact
Count as committed expenditure Reduces borrowing amount
Ignore it No impact
Varies by lender Check specific policy

Reducing Impact

Strategy Effect
Choose lender that ignores SL Maximum borrowing
Pay off loan (if makes sense) Removes monthly payment
Show net salary Some forms allow

Key Takeaways

  1. Check your plan — different thresholds and rules
  2. Repay 9% above threshold — not of total salary
  3. Most don’t pay off Plan 2 — especially mid-earners
  4. Don’t rush to repay — money may be wasted
  5. Write-off is real — 25-40 years depending on plan
  6. Multiple loans stack — can be expensive

For related content, see our take-home pay calculator, graduate job salary guide, and how to build wealth.

Sources

  1. Student Loans Company — Repayment thresholds
  2. GOV.UK — Student loan repayment