What is the Plan 5 student loan repayment threshold in the UK?

Full answer

Plan 5 is the student loan repayment plan for undergraduate students in England who started their course on or after 1 August 2023. It replaced Plan 2 for new starters and has a lower repayment threshold than Plan 2. The key figures for Plan 5 in 2026/27 are: - Repayment threshold: GBP 25,000 per year (GBP 2,083/month or GBP 480/week) - Repayment rate: 9% of income above the threshold - Loan write-off: after 40 years from the April after graduation For comparison, Plan 2 (for students who started between 2012 and 2023) has a higher threshold of GBP 28,470 in 2026/27. Plan 1 (pre-2012 students) has a threshold of GBP 24,990. Postgraduate Loan repayments operate separately at 6% above GBP 21,000. How repayments work: repayments are collected automatically through PAYE for employees, or through Self Assessment for the self-employed. You only repay when your income exceeds the threshold -- repayments stop if your income drops below it. For a Plan 5 borrower earning GBP 30,000, the annual repayment is 9% of GBP 5,000 (the amount above the GBP 25,000 threshold) = GBP 450 per year, or GBP 37.50 per month. The Plan 5 threshold is lower than Plan 2 and the write-off period is longer (40 years versus 30 years for Plan 2), which generally means Plan 5 borrowers repay more over the life of their loan. The threshold is reviewed annually. If you hold both an undergraduate loan and a Postgraduate Loan, both are repaid simultaneously but through separate calculations applied to the same gross income.

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