What is the Plan 4 student loan repayment threshold for Scottish graduates in 2026/27?

Full answer

Plan 4 covers students who took out income-contingent loans from the Student Awards Agency Scotland (SAAS), so it applies to most Scottish graduates rather than to where you currently live or work. The mechanism is the same as other plans: once your income passes the annual Plan 4 repayment threshold, you repay 9% of the amount above it. Below the threshold you repay nothing. The threshold is set by the government each tax year and is normally higher than the Plan 1 figure but lower than the Plan 2 figure, so check the current SAAS or GOV.UK threshold for 2026/27 before relying on a number, as it is uprated annually. Repayments are taken automatically. If you are employed, your employer deducts them through PAYE alongside Income Tax and National Insurance, calculated on a pay-period basis so a one-off bonus can trigger a deduction even if your annual pay is near the threshold. If you are self-employed, repayments are collected through Self Assessment based on your total income for the year. The 9% applies only to income above the threshold, not your whole salary. A worked illustration of the mechanism: if your gross income exceeds the threshold by £10,000, you repay 9% of that excess, which is £900 over the year, regardless of how much you originally borrowed. The deduction is on top of Income Tax (20% basic rate to £50,270 in Scotland the bands differ, with intermediate 21% and higher 42%) and 8% employee National Insurance between £12,570 and £50,270. If you also hold a postgraduate loan, that is repaid separately at 6% above its own threshold, and the two run concurrently. Any remaining Plan 4 balance is written off after the maximum repayment period or on reaching the cancellation age. Always confirm the exact 2026/27 threshold with your employer or GOV.UK.

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