Answers · UK 2025/26
What is the difference between Plan 1 and Plan 2 student loan repayment thresholds?
Plan 1 (pre-2012 English and Welsh students, and most Northern Ireland students) has a £26,900 repayment threshold in 2026/27, while Plan 2 (English and Welsh students who started their course between 2012 and 2023) has a higher £29,385 threshold -- both are repaid at 9% of income above the threshold.
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Which student loan plan you are on depends on where you lived when you started your course and when your course began, and it significantly affects how much you repay each month, because each plan has a different income threshold above which repayments start, even though the repayment rate is the same 9% for both. Plan 1 applies to most English and Welsh students who started university before September 2012, and to most Northern Ireland students regardless of start date. The Plan 1 threshold for 2026/27 is £26,900 a year (about £2,241.67 a month, or £517.31 a week) -- once income exceeds this, 9% of the excess is deducted through PAYE. Plan 2 applies to English and Welsh students who started their course between September 2012 and July 2023. The Plan 2 threshold for 2026/27 is £29,385 a year, noticeably higher than Plan 1, reflecting when the threshold was set and how it has been uprated since. On identical income, a Plan 1 borrower pays more per year than a Plan 2 borrower, because more of their income falls above the lower Plan 1 threshold. For example, on a £35,000 salary, a Plan 1 borrower has £8,100 above their threshold, paying £729 a year, while a Plan 2 borrower has only £5,615 above their higher threshold, paying £505.35 a year -- a difference of over £220 a year on identical income, purely because of which plan applies. Plan 1 loans also have a lower interest rate, typically linked to the Bank of England base rate or RPI, whichever is lower, while Plan 2 loans have historically carried higher interest linked to RPI plus up to 3%, depending on income, though the government has periodically adjusted this. Both plans are written off after a set number of years from when you became eligible to repay -- 25 years for Plan 1, and 30 years for Plan 2 -- rather than at a fixed age, meaning someone who took out a Plan 2 loan straight after graduating in their early 20s could still be repaying it into their early 50s if their loan is not cleared before the write-off date. Use the student loan repayment calculator to see how your plan type affects your monthly deductions.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.