Glossary · UK
What is Plan 1 Student Loan?
The UK student loan plan for most English and Welsh students who started university before September 2012, repaid at 9% of income above £26,900 in 2026/27.
Full Definition
Plan 1 covers student loans taken out by most students from England and Wales who started an undergraduate course before 1 September 2012, as well as all EU students who started before that date and some students from Northern Ireland regardless of start date. Repayments are 9% of income above the Plan 1 threshold, which is uprated each April (£26,900 for 2026/27) and collected automatically through PAYE for employees or via Self Assessment for the self-employed. Interest is charged at the lower of the Bank of England base rate plus 1%, or the Retail Price Index, whichever is lower, making Plan 1 interest generally cheaper than the RPI-linked interest charged on Plan 2 and Plan 5 loans. Any remaining balance is written off 25 years after the April the borrower first became due to repay, or earlier in cases of death or permanent disability. Because Plan 1 loans are the oldest still in active repayment, many borrowers are now approaching their 25-year write-off point, at which point remaining balances are cancelled regardless of how much has been repaid.
How Plan 1 Student Loan is calculated
Monthly repayment = 0.09 x max(0, Annual income - 26900) / 12- 26900
- Plan 1 annual repayment threshold for 2026/27 (GBP).
- 0.09
- Repayment rate applied to income above the threshold.
Worked example: On a salary of GBP 32,000, income above the threshold is 32,000 - 26,900 = GBP 5,100. Annual repayment is 9% x 5,100 = GBP 459, or about GBP 38.25 a month.