UK student loan repayment thresholds in 2026/27, plan by plan
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Five different student loan plans run in parallel in the UK, each with its own threshold, repayment rate, and interest formula. Here is exactly what applies for 2026/27, plan by plan.
For the 2026/27 tax year, UK student loan repayment thresholds range from £21,000 (Postgraduate Loan) to £33,795 (Plan 4), depending on which of five separate plans a borrower is on. Which plan applies is fixed by where someone studied and when they started their course, not by choice, and it determines both the income threshold above which repayments start and the interest rate charged on the outstanding balance in the meantime. Getting the wrong plan confused with the right one — easy to do, since four of the five share the same 9% repayment rate — can mean assuming the wrong deduction is coming out of a payslip.
The 2026/27 thresholds and rates
HMRC and the Student Loans Company publish the confirmed annual, monthly and weekly thresholds for each plan every tax year:
| Plan | Annual threshold | Monthly | Weekly | Repayment rate |
|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | £517 | 9% |
| Plan 2 | £29,385 | £2,448 | £565 | 9% |
| Plan 4 | £33,795 | £2,816 | £649 | 9% |
| Plan 5 | £25,000 | £2,083 | £480 | 9% |
| Postgraduate Loan | £21,000 | £1,750 | £403 | 6% |
These are the confirmed 2026/27 figures published in HMRC's 2026 to 2027 Student and Postgraduate Loan deduction tables. In every case, a borrower repays a fixed percentage of income above the threshold only — not on their whole salary, and not a fixed monthly amount regardless of income.
Which plan actually applies to whom
The plan is determined automatically by nation and start date, not chosen by the borrower:
- Plan 1 — English and Welsh students who started before September 2012, and most Northern Irish students regardless of start date.
- Plan 2 — English and Welsh undergraduates who started between September 2012 and July 2023.
- Plan 4 — Students who took out a loan through the Student Awards Agency for Scotland (SAAS).
- Plan 5 — English and Welsh undergraduates who started their course on or after 1 August 2023, the newest and now-current plan for new starters.
- Postgraduate Loan — Master's and doctoral loan borrowers, charged on top of whichever undergraduate plan, if any, they also hold.
A borrower only ever holds one undergraduate plan at a time, determined by when and where they started, but a Postgraduate Loan sits alongside it as a genuinely separate deduction with its own threshold and rate.
What happens with more than one loan
Two undergraduate plans never combine into a double deduction. If a borrower somehow holds both Plan 1 and Plan 2 balances, HMRC applies a single 9% repayment calculated against the lower of the two applicable thresholds, then splits that one payment between the two loan balances behind the scenes — the borrower never pays two separate 9% deductions on the same income. A Postgraduate Loan works differently: because it runs on its own threshold and its own 6% rate, it is charged concurrently alongside an undergraduate plan rather than merged into it. That means a graduate with both a Plan 2 loan and a Postgraduate Loan can have up to 15% of their income above the lower threshold deducted across the two repayments combined, not 9%.
A worked example at £35,000
Take someone earning £35,000 a year, comparing two different plans:
| Plan | Threshold | Income above threshold | Annual repayment |
|---|---|---|---|
| Plan 2 | £29,385 | £5,615 | £505 |
| Plan 5 | £25,000 | £10,000 | £900 |
The same £35,000 salary produces a repayment almost twice as large on Plan 5 as on Plan 2, purely because Plan 5's threshold is £4,385 lower — both plans use the identical 9% rate. Add a Postgraduate Loan to either case and a further 6% applies on income above £21,000: for the Plan 2 borrower above, that is an extra £840 a year, taking their combined deduction to £1,345.
How interest is charged on each plan
The threshold determines when repayments start; the interest rate determines how fast the balance grows in the meantime, and the two are set independently of each other:
| Plan | Interest basis, 2026/27 |
|---|---|
| Plan 1 | Lower of RPI (previous March) or Bank of England base rate + 1% |
| Plan 2 | Income-linked taper from RPI up to RPI + 3%, capped at 6% |
| Plan 4 | Lower of RPI (previous March) or Bank of England base rate + 1% |
| Plan 5 | RPI only, with nothing added on top |
| Postgraduate Loan | RPI + 3%, capped at 6% |
These rates are confirmed in the Student Loans Company's 2026 to 2027 guide to terms and conditions. Plan 5 is the cheapest of the five on interest despite having the second-lowest threshold, which is a deliberate design choice: the government lowered the Plan 5 repayment threshold compared with Plan 2 but removed the earnings-linked interest premium, aiming for a similar total lifetime cost rather than a straightforwardly cheaper or more expensive loan.
What doesn't change the calculation
Repayments are based on income above the threshold, deducted automatically through PAYE for employees or through Self Assessment for the self-employed — the borrower does not choose to pay more slowly or opt out while employed and above the threshold. HMRC tells an employer which plan type to apply through a starter checklist or a formal Student Loan start notice, and the correct plan is deducted alongside income tax and National Insurance on every payslip without the employee needing to calculate anything themselves; a new job or a P45 handed to the wrong employer is the most common reason the wrong plan type ends up applied by mistake, which is worth checking on a first payslip after starting somewhere new. None of the five plans charge an early repayment penalty, so a borrower who wants to clear a loan faster than the automatic deductions can do so through voluntary overpayments without losing anything. Whichever plan applies also writes off any remaining balance after a fixed number of years from the April a borrower was first due to repay — 25 years for Plan 1, 30 years for Plans 2, 4 and 5, and typically 30 years for the Postgraduate Loan — rather than requiring the full balance to be repaid regardless of how long that takes.
Sources
- GOV.UK: 2026 to 2027 Student and Postgraduate Loan deduction tables
- GOV.UK: Student loans — a guide to terms and conditions 2026 to 2027
- GOV.UK: Repaying your student loan — what you pay
This is general information, not financial advice. Which plan applies, and the exact repayment due, depends on individual circumstances including course start date, nation of study, and income. For a decision about a specific loan, check the current guidance directly on GOV.UK or contact the Student Loans Company.