Comparison · Student Loans · 2026/27
Student Loan Plan 1 vs Plan 2 UK 2026/27: Thresholds, Rate and Repayment Compared
Plan 1 and Plan 2 student loans both charge the same 9% marginal repayment rate, but they kick in at very different salary thresholds and are written off after different periods. Which plan you are on depends entirely on when and where you studied — here is how they compare for 2026/27.
TL;DR - 30-Second Summary
- - Plan 1: £26,900 threshold, 9% above it, written off after 25 years
- - Plan 2: £29,385 threshold, 9% above it, written off after 30 years
- - Same rate, different threshold: Plan 2's higher threshold means lower monthly repayments at the same salary
Side by Side: Plan 1 vs Plan 2 (2026/27)
| Feature | Plan 1 | Plan 2 |
|---|---|---|
| Who it applies to | Started course before Sept 2012 (England/Wales); most Scotland/NI borrowers | Started course Sept 2012 - July 2023 (England/Wales) |
| Repayment threshold 2026/27 | £26,900 | £29,385 |
| Repayment rate above threshold | 9% | 9% |
| Write-off period | 25 years after first due to repay | 30 years after first due to repay |
| Interest rate basis | Lower of RPI or Bank of England base rate + 1% | RPI plus up to 3%, income-scaled |
Worked Example: £35,000 Salary
Compare monthly repayments for someone earning £35,000 a year, on Plan 1 versus Plan 2.
| Plan | Income above threshold | Annual repayment | Monthly repayment |
|---|---|---|---|
| Plan 1 | £8,100 | £729 | £60.75 |
| Plan 2 | £5,615 | £505 | £42.11 |
On the same £35,000 salary, a Plan 1 borrower repays about £18.64 more per month than a Plan 2 borrower, purely because the Plan 1 threshold (£26,900) is lower than the Plan 2 threshold (£29,385). Both are charged at the same 9% marginal rate.
Student Loan Plan 1 vs Plan 2 — Frequently Asked Questions
How do I know if I am on Plan 1 or Plan 2?
It depends on when and where you started your course. Plan 1 generally applies if you started an undergraduate course in England or Wales before September 2012, or a course in Northern Ireland or Scotland at most times. Plan 2 generally applies if you started an undergraduate course in England or Wales between September 2012 and July 2023. You can check your exact plan type on your online Student Loans Company account.
What is the Student Loan repayment rate?
Both Plan 1 and Plan 2 charge the same marginal repayment rate: 9% of your income above your plan's threshold. The rate is identical across plans — the difference in monthly repayment comes entirely from the different threshold at which repayments start.
What is the Plan 1 repayment threshold for 2026/27?
The Plan 1 threshold for 2026/27 is £26,900 a year. You repay 9% of everything you earn above this threshold, deducted automatically through PAYE if you are employed, or via Self Assessment if you are self-employed.
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What is the Plan 2 repayment threshold for 2026/27?
The Plan 2 threshold for 2026/27 is £29,385 a year, higher than the Plan 1 threshold. This means Plan 2 borrowers start repaying at a higher salary, and pay less per month than a Plan 1 borrower on the same salary above both thresholds.
When are Plan 1 and Plan 2 loans written off?
Plan 1 loans are written off 25 years after the April you were first due to repay (or at age 65 for loans taken out before 2006, if that comes sooner). Plan 2 loans are written off 30 years after the April you were first due to repay. This means many Plan 2 borrowers with lower or middle incomes never fully repay their loan before it is written off, since interest can accrue faster than the balance is repaid.
Can I have both a Plan 1 and Plan 2 loan at the same time?
Yes, if you took out undergraduate loans under Plan 1 rules and later took out a postgraduate loan or a second period of study under Plan 2 rules, you can be repaying both simultaneously (plus a Postgraduate Loan if applicable, which has its own separate threshold and 6% rate). HMRC calculates repayments due under each plan and directs your single 9% (or higher combined rate) deduction toward the correct plan or plans.
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Disclaimer: This is general information, not financial advice. Your exact plan type, threshold and interest rate depend on your individual circumstances — check your Student Loans Company account for confirmation. See gov.uk guidance on student loan repayment plans.
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