Student Loan Repayment UK: Plan 1 vs Plan 2 vs Plan 5 Explained
Your student loan plan was decided by when your course started, not by choice — and it changes your threshold, interest rate, and write-off date completely. Here's exactly how Plan 1, Plan 2, and Plan 5 differ for 2026/27.
Three students, three different repayment thresholds, three different interest rates, and three very different write-off dates — all just for starting university in a different year. Which plan governs your loan isn't a choice you made; it's determined entirely by when your course started. Here's what each one actually means.
Key Takeaways
Your plan is decided entirely by when your course started, not by choice — Plan 1 (before September 2012), Plan 2 (September 2012–July 2023), Plan 5 (September 2023 onwards).
For 2026/27, repayment thresholds are £26,900 (Plan 1), £29,385 (Plan 2), and £25,000 (Plan 5) — Plan 5 has the lowest threshold of the three, meaning repayments start on a smaller income.
Interest rates differ sharply: Plan 1 is capped at RPI (4.1%), Plan 2 is capped at 6.0%, and Plan 5 charges RPI only, with no added percentage.
Write-off timing is the biggest structural difference — 25 years (Plan 1), 30 years (Plan 2), and 40 years (Plan 5) after the April you were first due to repay.
All three repay at 9% of income above the threshold — the rate deducted from your payslip is identical; what differs is where the threshold sits and how long the loan can follow you.
At a Glance — Plan 1 vs Plan 2 vs Plan 5
Plan 1
Plan 2
Plan 5
Course started
Before September 2012
September 2012 – July 2023
September 2023 onwards
2026/27 repayment threshold
£26,900
£29,385
£25,000
Repayment rate above threshold
9%
9%
9%
Interest rate (2026/27)
Capped at RPI (4.1%)
RPI to RPI+3%, capped at 6.0%
7 min read·September 17, 2026·1
Maya Thornton
Writer
RPI only
Written off
25 years after first due to repay (or age 65 for pre-2006 loans)
30 years after first due to repay
40 years after first due to repay
Thresholds and rates are set annually and were current for the 2026/27 tax year at time of writing.
How to Check Which Plan You're Actually On
Your plan depends on when you started your course, not your choice or preference — but it's genuinely easy to get confused if you took a gap year, transferred courses, or aren't sure of the exact term dates. The reliable way to check is your Student Loans Company online account, which states your plan type directly, rather than relying on working it out from memory. This matters because the numbers below only apply correctly once you know which row you're actually reading.
Plan 1 — The Oldest, Cheapest-Interest Option
If you started an undergraduate course in England or Wales before 1 September 2012, you're on Plan 1. It carries the highest repayment threshold relative to its era and, currently, the lowest interest rate of the three plans — capped at RPI alone, currently 4.1%. Plan 1 is also written off the soonest: 25 years after the April you were first due to start repaying, or at age 65 if your very first loan was taken out before September 2006. For most Plan 1 borrowers by 2026, this is either already paid off, close to it, or approaching its write-off date regardless.
Plan 2 — The Middle Cohort, and the Most Volatile Threshold
Plan 2 covers English and Welsh students who started between September 2012 and July 2023 — currently the largest group of borrowers. Its repayment threshold has had a genuinely turbulent recent history: frozen at £27,295 since 2023, it rose to £29,385 for 2026/27, and is now set to freeze again at that level for three years from April 2027. Interest can run from RPI up to RPI+3%, capped at 6.0% for 2026/27 — meaningfully higher than Plan 1's ceiling. The loan is written off 30 years after the April repayments were first due, five years longer than Plan 1.
Plan 5 — The Newest, Longest, and Lowest-Threshold Plan
If you started your course from September 2023 onwards, you're on Plan 5 — and it's structured quite differently from its predecessors. The repayment threshold is £25,000, the lowest of the three, meaning repayments start biting at a lower income than either Plan 1 or Plan 2 borrowers experience. The interest rate is comparatively gentle — RPI only, with no added percentage — but the loan follows borrowers for 40 years after the April they were first due to repay, the longest write-off period of any current plan.
That combination — a low starting threshold, moderate interest, and a very long write-off window — means many Plan 5 borrowers are likely to be repaying 9% of income above £25,000 for most of their working life without ever clearing the balance in full, at which point it's simply written off. Functionally, for a large share of borrowers, Plan 5 behaves closer to a long-running graduate tax than a conventional loan with a realistic full-repayment date — a distinction worth understanding fully in Does Dave Ramsey's 7 Baby Steps Actually Work in the UK?, which covers why that changes how it should be treated in a debt payoff plan.
A Brief Note on Postgraduate Loans
Postgraduate Master's and Doctoral loans run on a separate structure entirely — a lower £21,000 threshold but a different, typically 6% repayment rate on income above it, rather than the 9% that applies to Plans 1, 2, and 5. If you have both an undergraduate and a postgraduate loan, both get deducted simultaneously, based on their own separate thresholds.
Why the Plan You're On Changes Your Actual Financial Decisions
The differences here aren't just trivia — they change what a sensible financial strategy actually looks like. A Plan 1 borrower close to full repayment is in a fundamentally different position from a Plan 5 borrower who's mathematically unlikely to ever clear the balance before it's written off. Voluntary overpayments, decisions about saving versus repaying early, and even how to think about the loan on a mortgage affordability assessment all depend on which of these three rows actually describes your situation — not a generic "should I pay off my student loan" answer that ignores which plan you're on.
What This Means for You
Check your actual plan type before making any decision about your student loan — the right answer for a Plan 1 borrower nearing write-off and a Plan 5 borrower decades away from either full repayment or write-off can be completely different, even with identical salaries. Once you know which row applies to you, the maths around whether extra payments are worth it becomes a much more specific, answerable question.
What You Should Do Next
Check your Student Loans Company online account to confirm your actual plan type
Note your specific threshold and interest rate for the current tax year, since both change annually
Calculate roughly how many years remain until your write-off date, based on when repayments first began
If you're on Plan 5, consider whether you're realistically on track to repay in full before the 40-year write-off, or whether it functions closer to a graduate tax for your situation
Hold off on voluntary overpayments until you've worked out which of these actually applies to you
Plan 1, Plan 2, and Plan 5 aren't three versions of the same loan — they're three genuinely different repayment structures, assigned entirely by when your course started, with real differences in threshold, interest, and how long the loan can realistically follow you. Knowing which one actually applies to you is the necessary first step before any decision about overpaying, mortgage affordability, or how to think about the balance at all.
FAQ
How do I find out which student loan plan I'm on?
Check your Student Loans Company online account, which states your plan type directly — relying on memory of exact course start dates can lead to mistakes, especially around the September 2012 and September 2023 cutoff points.
Which student loan plan has the lowest interest rate?
Plan 5 charges RPI only, with no added percentage, making it the lowest of the three for 2026/27. Plan 1 is capped at RPI (4.1%), and Plan 2 is capped at 6.0%.
Why does Plan 5 have a 40-year write-off when Plan 1 only has 25?
Plan 5 was introduced as part of a 2023 reform that extended the write-off period substantially, alongside lowering the repayment threshold — a deliberate structural change from the earlier plans, not an oversight.
Do all three plans repay at the same rate?
Yes — all three deduct 9% of income above their respective threshold. What differs is where that threshold sits, the interest rate applied, and how long the loan continues before being written off.
This article is for informational purposes only and does not constitute financial advice. Student loan thresholds, interest rates, and rules are set annually and change — verify your specific plan and current figures directly via your Student Loans Company account or gov.uk.
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Maya Thornton is a personal finance writer specializing in credit, debt strategy, and consumer banking. With a background in financial counseling, she translates complex financial system mechanics into plain-language guides that help everyday people take real control of their financial lives.
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