Student Loan Repayment UK: How Much Will You Repay from Your Salary?

Getting your first payslip after graduating is when student loan repayment stops being an abstract idea and becomes a real number coming out of your pay. Student Loan Repayment UK If you’ve ever stared at that deduction and wondered how it’s actually worked out — or whether you’re even on the right repayment plan — this guide walks through everything in plain English, with real numbers for the 2026/27 tax year Student Loan Repayment UK.

Understanding student loan repayment UK rules properly can save you from overpaying, help you plan your budget more accurately, and stop you worrying about a system that’s actually far more forgiving than most people assume Student Loan Repayment UK.

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How Student Loan Repayment Actually Works

Unlike a credit card or a bank loan, a UK student loan doesn’t work like normal debt. Student Loan Repayment UK There’s no fixed monthly bill, missing a payment doesn’t affect your credit score, and any interest that builds up doesn’t lead to debt collectors chasing you. Student Loan Repayment UK Instead, repayments are collected automatically as a percentage of your income once you earn above a set threshold — and any remaining balance is written off completely after a set number of years Student Loan Repayment UK.

Here’s the basic principle: you don’t repay based on how much you owe. Student Loan Repayment UK You repay based on how much you earn. Student Loan Repayment UK Someone with £60,000 of student debt and someone with £15,000 of student debt, on the same plan and the same salary, will make identical monthly repayments Student Loan Repayment UK.

That single fact changes how you should think about the whole system. Student Loan Repayment UK It behaves more like an extra rate of income tax than a loan in the traditional sense Student Loan Repayment UK.

Student Loan Plans Explained

Your repayment plan depends on where you studied and when your course started. Student Loan Repayment UK This matters because each plan has a different threshold and, in one case, a different rate.

Plan 1

For students who started courses before September 2012 in England or Wales, or before 2012 in Northern Ireland (with some later Scottish variations) Student Loan Repayment UK.

Plan 2

For most students who started an undergraduate course in England or Wales between September 2012 and July 2023 Student Loan Repayment UK.

Plan 4

For Scottish students, regardless of when they started, funded through the Student Awards Agency for Scotland (SAAS) Student Loan Repayment UK.

Plan 5

For new students who started their course from August 2023 onwards in England. Student Loan Repayment UK Repayments on Plan 5 only became due for the first time from April 2026.

Postgraduate Loan

For anyone repaying a Master’s or Doctoral loan.Student Loan Repayment UK This runs alongside any undergraduate plan you might also be repaying, and it works differently — a lower threshold and a lower repayment rate.

Read More: Take Home Pay Calculator UK – Calculate Your Net Salary After Tax

Student Loan Repayment Thresholds 2026/27

Here’s where things get concrete. Each plan has an annual income threshold. Student Loan Repayment UK You only start repaying once your income goes above it, and you only repay a percentage of the amount above the threshold — never the whole amount you earn.

Plan	Annual Threshold	Monthly Threshold	Weekly Threshold	Repayment Rate
Plan 1	£26,900	£2,242	£518	9%
Plan 2	£29,385	£2,449	£565	9%
Plan 4	£33,795	£2,816	£650	9%
Plan 5	£25,000	£2,083	£480	9%
Postgraduate	£21,000	£1,750	£404	6%

A few things worth noting straight away:

• Plan 1, Plan 2, and Plan 4 thresholds all increased for 2026/27.
• Plan 5 stays fixed at £25,000 — this threshold was set by legislation with no automatic inflation link until at least 2027 Student Loan Repayment UK.
• The Postgraduate Loan threshold has never changed since it was introduced in 2016.
• Scotland’s Plan 4 threshold is significantly higher than the others, reflecting a more generous approach from the Scottish Government.

How to Calculate Your Student Loan Repayment

Working out your own repayment is a simple three-step process:

1. Take your gross annual salary (before tax).
2. Subtract your plan’s threshold.
3. Multiply the remaining amount by your plan’s repayment rate (9% for Plans 1, 2, 4 and 5, or 6% for Postgraduate).

If your salary is below the threshold, you pay nothing — full stop.

Worked Example 1 — Plan 2, Salary of £35,000

• Amount above threshold: £35,000 − £29,385 = £5,615
• Repayment: £5,615 × 9% = £505.35 a year (around £42 a month)

Worked Example 2 — Plan 1, Salary of £30,000

• Amount above threshold: £30,000 − £26,900 = £3,100
• Repayment: £3,100 × 9% = £279 a year (around £23 a month)

Worked Example 3 — Plan 5, Salary of £30,000

• Amount above threshold: £30,000 − £25,000 = £5,000
• Repayment: £5,000 × 9% = £450 a year (around £37.50 a month)

Worked Example 4 — Plan 4, Salary of £30,000

• £30,000 is below the £33,795 threshold, so repayment is £0.

This last example shows exactly why your plan type matters so much. Student Loan Repayment UK The same salary produces four completely different outcomes depending on where and when you studied.

Repaying a Postgraduate Loan Alongside an Undergraduate Loan

If you did a Master’s or Doctorate after your undergraduate degree, you could be repaying two loans at once — your original undergraduate plan and your Postgraduate Loan. Student Loan Repayment UK These are calculated separately and deducted together.

Worked Example — Plan 2 Plus Postgraduate, Salary of £35,000

• Plan 2 repayment: (£35,000 − £29,385) × 9% = £505.35
• Postgraduate repayment: (£35,000 − £21,000) × 6% = £840
• Total repayment: £1,345.35 a year (around £112 a month)

It can feel like a heavy deduction, but it’s worth remembering both loans are still calculated purely on income, not on the size of the debt itself.

Employed vs Self-Employed: How Repayments Are Collected

Situation	How It Works
Employed (PAYE)	Deducted automatically by your employer alongside tax and National Insurance
Self-employed	Calculated and paid annually through Self Assessment
Both employed and self-employed	You may pay less through PAYE but owe more through Self Assessment once combined income is assessed

If you’re employed, you’ll see the deduction listed on your payslip. HMRC tells your employer that you have a loan and which threshold applies, but never how much you actually owe — your employer only ever sees the repayment percentage, not your total balance.

Weekly and Monthly Thresholds Explained

Repayments aren’t always perfectly smooth across the year. If you’re paid monthly, HMRC applies one-twelfth of the annual threshold to each pay period. That means a bonus month, extra overtime, or a one-off payment can push you over the threshold for that specific month — even if your average annual income stays below it.

If your total annual income ends up below the yearly threshold once the tax year finishes, you can apply for a refund of anything you overpaid during high-earning months.

Will You Actually Repay the Full Loan?

This is the part most graduates don’t realise: most people never repay their student loan in full before it’s written off.

Loans are cancelled automatically after a set number of years, regardless of the remaining balance:

• Plan 1: written off after 25 years, or at age 65
• Plan 2: written off after 30 years
• Plan 4: written off after 30 years
• Plan 5: written off after 40 years
• Postgraduate: written off after 30 years

For many graduates on Plan 2 in particular, a large share of the original loan is never repaid at all — the balance simply expires. This is a deliberate part of the system’s design, not a loophole, and it’s why financial advisers generally caution against rushing to overpay unless you’re confident you’ll clear the full balance well before the write-off date.

Should You Make Voluntary Overpayments?

For most graduates, the honest answer is no. If you’re likely to have a chunk of your loan written off anyway, any extra repayment beyond what’s automatically deducted is effectively money you’ll never see the benefit of. Overpaying only tends to make sense if:

• You’re a high earner likely to clear the full balance before write-off, or
• You have a Plan 1 or Plan 4 loan with a relatively small remaining balance close to being paid off anyway.

If you’re unsure, it’s worth checking your projected repayment timeline before making any voluntary payments — once they’re made, they can’t be reversed.

Repaying From Overseas

If you move abroad for more than three months, you’re required to tell the Student Loans Company. Repayments continue, but they’re based on fixed thresholds set for the country you’re living in rather than the standard UK figures, since living costs vary widely between countries. Failing to report your move can result in penalties and a higher interest rate being applied.

Final Thoughts

Student loan repayment in the UK isn’t as intimidating as it first looks once you understand the mechanics: you repay a fixed percentage of whatever you earn above your plan’s threshold, nothing more. Your total debt size barely matters day to day, since most graduates will never repay it in full before it’s written off.

The most useful thing you can do is confirm which plan you’re on, check the correct threshold for 2026/27, and use that to estimate your monthly deduction accurately — rather than guessing based on your total loan balance, which for most people isn’t really the number that matters.

This article is for general information only and reflects UK student loan rules for the 2026/27 tax year at the time of writing. It is not personal financial advice — for guidance specific to your circumstances, contact the Student Loans Company or a qualified financial adviser.

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