Answers · UK 2025/26

What is the Plan 5 student loan repayment threshold in 2026/27?

The Plan 5 student loan repayment threshold is £25,000 a year (about £2,083 a month or £480 a week) for 2026/27, frozen at this level rather than rising with inflation. You repay 9% of income above this threshold, and any remaining balance is written off 40 years after you started repaying.

Last updated: 1 July 2026Last reviewed: 1 July 2026How we verify

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Plan 5 applies to most English students who started their course from September 2023 onwards, and it has notably different terms from the older Plan 2 loans that came before it. **The threshold and repayment rate** For 2026/27, the Plan 5 repayment threshold is £25,000 a year. If you earn above this through PAYE employment or via Self Assessment for self-employment, you repay 9% of the amount ABOVE the threshold, not 9% of your whole salary. **Worked example** Someone on Plan 5 earning £30,000 a year has £5,000 of income above the £25,000 threshold. Their annual repayment is 9% x £5,000 = £450 a year, or £37.50 a month, deducted automatically through payroll alongside Income Tax and National Insurance. **Why Plan 5 is different from Plan 2** Plan 5 has a lower threshold than Plan 2 (which sits at £29,385 for 2026/27), meaning Plan 5 borrowers start repaying at a lower salary. However, Plan 5 also has a much longer write-off period of 40 years from the April you were first due to repay, compared with 30 years for Plan 2 -- so while Plan 5 borrowers repay for longer, a much larger proportion of low and middle earners are expected to clear their full balance (including interest) before it is written off, rather than having a chunk cancelled. **Interest rate** Interest on Plan 5 loans is charged at a rate linked to RPI only (unlike Plan 2, which could add up to 3 percentage points above RPI for higher earners) -- this generally makes Plan 5 interest lower than Plan 2 interest was for higher earners, though the lower threshold means more people start repaying sooner. **Frozen threshold means real-terms increase** Because the £25,000 threshold is frozen rather than rising with average earnings or inflation, as wages rise over time more of a graduate's income falls above the threshold each year, meaning the effective repayment burden gradually increases in real terms even without any change to the 9% rate itself. **Multiple jobs and self-employment** If you have more than one job, your employer only applies student loan deductions to the salary from that specific job (although anyone required to complete Self Assessment reconciles their total income including all employments and self-employment profit through their tax return, ensuring the right amount is ultimately collected across all income sources). **Practical tip** Use a student loan repayment calculator to see how a pay rise, bonus, or new job affects the size of your monthly deduction, since deductions rise directly with any income above the £25,000 threshold, and check whether your loan will genuinely clear before the 40-year write-off or whether you may in practice repay indefinitely at a low salary.