Plan 5 has the lowest repayment threshold (£25,000) of any UK student loan. 40-year write-off period. Impact on take-home at every salary.
| Plan | Threshold | Write-off | Who |
|---|---|---|---|
| Plan 1 | £24,990 | 25 years | Pre Sept 2012 starters |
| Plan 2 | £27,295 | 30 years | Sept 2012 to Jul 2023 |
| Plan 4 (Scotland) | £31,395 | 30 years | Scottish students |
| Plan 5 | £25,000 | 40 years | Aug 2023 onwards |
| Salary | Annual Repayment | Monthly | Extra vs Plan 2/year |
|---|---|---|---|
| £26,000 | £90 | £7.50 | £114 more |
| £30,000 | £450 | £37.50 | £243 more |
| £35,000 | £900 | £75 | £693 more |
| £40,000 | £1,350 | £112.50 | £1,143 more |
| £50,000 | £2,250 | £187.50 | £2,043 more |
For low earners whose income will remain below or near the threshold, the loan will likely be written off — overpaying wastes money. For higher earners who will fully repay within 40 years, overpayments can save interest. The decision depends heavily on your expected career earnings trajectory. Unlike Plan 2, there are many Plan 5 borrowers for whom full repayment before write-off is realistic.
Salary sacrifice pension contributions reduce gross pay for student loan calculation purposes. A £30,000 earner contributing 5% via salary sacrifice has adjusted gross of £28,500 — repaying 9% on £3,500 rather than £5,000, saving £135/year in student loan repayments as a side benefit of pension saving.
What is the Plan 5 student loan threshold?
£25,000/year (£2,083/month). This is lower than Plan 2 (£27,295) and Plan 1 (£24,990). Almost every full-time worker on Plan 5 will be making repayments.
Who is on Plan 5?
Students who started undergraduate courses in England from August 2023 onwards. This covers the 2023-24 academic year intake and all subsequent years.
When does Plan 5 get written off?
After 40 years — 10 years longer than Plan 2. High earners are more likely to fully repay before write-off, making this a genuine long-term debt rather than a graduate tax.
Free, accurate, 2026-27 rates. Scotland and tax code supported.