Comparison · Student Finance · 2026
Student Loan Plan 2 vs Plan 5 2026: Repayments Compared
English and Welsh graduates repay their student loans at 9% of income above a threshold, but the threshold and write-off period depend on when they started studying. Plan 2 borrowers, who began between 2012 and 2023, repay above £29,385 with write-off after 30 years. Plan 5 borrowers, starting from 2023, repay above £25,000 with write-off after 40 years. This comparison shows what the differences mean for monthly repayments and lifetime cost in 2026/27.
TL;DR - 30-Second Summary
- - Plan 2: threshold £29,385, written off after 30 years
- - Plan 5: threshold £25,000, written off after 40 years
- - Both repay 9% of income above the threshold
- - Plan 5 usually costs more over a working life
Side by Side
| Feature | Plan 2 | Plan 5 |
|---|---|---|
| Who is on it | Started 2012 to 2023 | Started 2023 onward |
| Repayment threshold | £29,385 | £25,000 |
| Repayment rate | 9% above threshold | 9% above threshold |
| Written off after | 30 years | 40 years |
| Repayment at modest pay | Lower | Higher |
| Likely lifetime cost | Usually lower | Usually higher |
Worked Example: Same Salary, Different Plan
Repayments are 9% of income above the threshold, so the lower Plan 5 threshold means more of your pay is captured. The table compares annual repayments at two salaries for 2026/27.
| Salary | Plan 2 (above £29,385) | Plan 5 (above £25,000) |
|---|---|---|
| £30,000 | 9% of £615, about £55/yr | 9% of £5,000, about £450/yr |
| £40,000 | 9% of £10,615, about £955/yr | 9% of £15,000, about £1,350/yr |
At every salary above £25,000, a Plan 5 borrower repays more per year than a Plan 2 borrower, because the threshold is lower and more income is captured at 9%. Combined with the longer 40-year term, Plan 5 borrowers typically repay more over their working life. Estimate your own repayments with the student loan calculator.
Why the Write-Off Period Matters
The repayment is income-contingent, so what you actually repay depends as much on your career earnings as on the loan balance. Many lower and middle earners never clear their loan and simply repay until it is written off. For those people, a 40-year term on Plan 5 means ten more years of repayments than a 30-year term on Plan 2, which can add up to a substantially larger total repaid even where the headline borrowing was similar.
High earners who clear the balance before write-off are less affected by the term, since they stop repaying once the loan is gone. For them, the threshold difference matters more than the write-off date.
Who Pays More
- - You earn close to the threshold
- - Your earnings rise slowly
- - You benefit from the 30-year write-off
- - You started a course before 2023
- - You earn above £25,000
- - You repay for the full 40 years
- - Your income stays middling
- - You started a course from 2023
Verdict
You do not choose your plan; it is fixed by when you started studying. But understanding the difference matters. Plan 5, with its lower £25,000 threshold and 40-year term, generally costs more over a working life than Plan 2, which starts repayments at £29,385 and writes off after 30 years. The gap is widest for middle earners who repay steadily until write-off, and narrowest for high earners who clear the balance early. Whatever your plan, think carefully before overpaying, because many borrowers never repay the full amount and overpaying can simply increase what you hand over.