Your repayment threshold is the salary at which student loan deductions begin. Earn below it and you repay nothing. Earn above it and you repay a fixed percentage of the amount above it, never of your whole salary. Here are the current thresholds for every plan.
Thresholds for every plan
| Plan | Annual threshold | Monthly | Weekly | Rate above threshold | Written off after |
|---|---|---|---|---|---|
| Plan 1 | £26,900 | £2,241 | £517 | 9% | 25 years |
| Plan 2 | £29,385 | £2,448 | £565 | 9% | 30 years |
| Plan 4 (Scotland) | £33,795 | £2,816 | £649 | 9% | 30 years |
| Plan 5 | £25,000 | £2,083 | £480 | 9% | 40 years |
| Postgraduate | £21,000 | £1,750 | £403 | 6% | 30 years |
What a threshold actually means
This is the single most misunderstood part of the system. If you are on Plan 2 and earn £35,000, you do not repay 9% of £35,000. You repay 9% of the £5,615 you earn above the £29,385 threshold, which is £42.11 a month. The threshold is a shield, not a trigger.
Deductions are taken from your payslip through PAYE, in the same way as income tax. Payroll checks each pay period against the monthly or weekly threshold, which is why a one-off bonus can cause a deduction even if your annual salary sits below the annual figure.
Frozen thresholds and fiscal drag
Thresholds are reviewed each April but they do not always rise in line with wages. When your salary grows faster than the threshold, a larger slice of your income sits above it and your repayments climb, even though the headline 9% never changes. This quiet effect, sometimes called fiscal drag, is why more graduates repay more each year without any policy announcement.
What if I have more than one plan?
If you hold two undergraduate plans, the 9% is deducted once, calculated on income above the lowest of your thresholds. A Postgraduate Loan is different: its 6% is taken on top of any undergraduate deduction, so you can genuinely pay both at the same time.
Work out your own repayment
Pick your plan to see what you repay each month, and whether you will ever clear the balance before it is written off:
- Plan 1 calculator — repayments start at £26,900
- Plan 2 calculator — repayments start at £29,385
- Plan 4 (Scotland) calculator — repayments start at £33,795
- Plan 5 calculator — repayments start at £25,000
- Postgraduate calculator — repayments start at £21,000
Frequently asked questions
When do repayments start?
From the April after you finish or leave your course, and only once your income is above the threshold. If you never earn above it, you never repay a penny.
Do repayments stop if my salary falls?
Yes, automatically. Payroll simply stops deducting the moment your income drops below the threshold, and restarts when it rises. You do not need to notify anyone.
Is the threshold based on gross or take-home pay?
Gross pay, before tax and National Insurance, but after any salary-sacrifice pension contributions. Sacrificing into a pension can therefore reduce your student loan deduction.
Figures are the current published thresholds. They are reviewed each April. This is an estimate, not financial advice.