Student Loan Repayments Explained: Plans 1, 2, 4, 5 and Postgraduate
There are now five repayment plans for UK student loans, each with a different threshold and rate. A plain-English breakdown so you know which one applies to you and how much comes out of each payslip.
If you took out a student loan, your employer deducts repayments through PAYE alongside your tax and National Insurance. Repayments only start once your earnings cross the threshold for your plan, and they continue until the loan is paid off or written off (the write-off period depends on the plan).
Plan 1 — pre-2012 entrants in England and Wales, all of NI
Threshold for 2025/26: £24,990 a year. Repayment rate: 9% of earnings above the threshold. Loans are written off when you turn 65 (loans before 2006) or 25 years after the April you become eligible to repay (loans 2006–2012).
Plan 2 — 2012–2023 entrants in England and Wales
Threshold for 2025/26: £27,295 a year. Repayment rate: 9% above the threshold. Written off 30 years after the April you became eligible to repay. Most current graduates are on Plan 2.
Plan 4 — Scottish loans
Threshold for 2025/26: £31,395. Repayment rate: 9%. Written off 30 years after the April you became eligible to repay. If you took your loan from the Student Awards Agency Scotland (SAAS), you are on Plan 4.
Plan 5 — 2023+ entrants in England
Threshold for 2025/26: £25,000. Repayment rate: 9%. Written off 40 years after the April you became eligible to repay. Plan 5 applies to most students starting university from August 2023 onward in England — a lower threshold and a longer repayment window than Plan 2.
Postgraduate Loan
Threshold: £21,000. Repayment rate: 6% above the threshold (not 9%). Postgraduate loans are repaid alongside, not instead of, an undergraduate plan — so if you have both a Plan 2 and a Postgraduate Loan, both get deducted.
How it shows on a payslip
Student Loan deductions appear as a separate line. If you set the right plan in the payslipmaker.uk Payslip Generator the calculation runs automatically: 9% (or 6% for postgraduate) of the gross above the threshold for that pay period.