Calculate your UK student loan repayments based on your salary and loan plan. Find out how much you'll pay monthly and annually for Plan 1, Plan 2, Plan 4, and Postgraduate loans. Updated for 2026/27 tax year.
Student loan repayments in the UK are income-contingent, meaning you only repay when you earn above a certain threshold. The amount you repay depends on your salary and which repayment plan you're on. Repayments are automatically deducted from your salary through PAYE if you're employed, or you pay through Self Assessment if you're self-employed. Your loan gets written off after a certain number of years regardless of how much you've repaid. Interest accrues on your loan from the day you take it out, but crucially, if your monthly repayments don't cover the interest charged, you're not required to make up the difference—the outstanding balance simply grows until it's written off. This means many graduates never fully repay their loans despite making payments for decades.
The main differences lie in repayment thresholds, interest rates, and write-off periods. Plan 1 applies to students who started before September 2012 in England and Wales, or current students in Scotland and Northern Ireland. The threshold is £24,990 (2026/27), you repay 9% of income above this, and the loan is written off after 25 years or at age 65 (whichever comes first). Interest is either RPI or 1% above Bank of England base rate, whichever is lower. Plan 2 applies to English and Welsh students who started September 2012 or later. The threshold is £27,295 (2026/27), you repay 9% above this, loans are written off after 30 years, and interest rates are RPI plus up to 3% depending on income during study (RPI+3%) and after graduation (RPI when earning under threshold, scaling to RPI+3% at £49,130 or above). Plan 4 applies to Scottish students who started September 2021 or later, with a threshold of £31,395 (2026/27), 9% repayment rate, write-off after 30 years, and interest at RPI. Postgraduate loans have a threshold of £21,000, repayment rate of 6%, write-off after 30 years, and interest at RPI+3%. If you have both undergraduate and postgraduate loans, you repay both simultaneously once you're above both thresholds, potentially paying 15% of income above £27,295.
Most graduates never fully repay their student loans. The Institute for Fiscal Studies estimates that around 75% of Plan 2 borrowers won't repay their loans in full before the 30-year write-off period. This is because interest rates often exceed repayment amounts for low to mid earners. Someone earning £30,000 on Plan 2 repays approximately £2,052 annually but accrues significantly more in interest. Only high earners (typically £45,000+ consistently throughout their career) are likely to clear their debt before write-off. Whether you repay in full depends on your starting salary, salary progression over 30 years, initial loan amount (including maintenance loans), and periods of unemployment or part-time work reducing repayments. Think of student loans less like traditional debt and more like a graduate tax—you pay a percentage of income for up to 30 years regardless of the outstanding balance. Many financial advisors recommend not making voluntary overpayments unless you're certain you'll fully repay before write-off, as overpaying simply means paying money you'd never have owed anyway. Focus instead on saving, pension contributions, or paying off high-interest debt like credit cards.
Moving abroad doesn't pause or cancel your student loan repayments. You must inform the Student Loans Company of your new country of residence. They'll set a repayment threshold based on UK equivalent earnings for that country, which may be higher or lower than the UK threshold. For example, if you move to Australia, your threshold might be around AUD$48,000 (subject to annual changes). You'll need to submit annual income declarations and make direct repayments to SLC. Failing to notify SLC or submit declarations can result in them treating you as a non-communicating borrower, potentially demanding full immediate repayment or adding a fixed monthly charge regardless of your actual income. For self-employed individuals in the UK, repayments aren't automatically deducted. You repay through Self Assessment based on your previous year's profit. HMRC shares your income information with SLC, who then calculate what you owe. You'll receive a payment demand and must pay by January 31st following the end of the tax year. Make sure to account for this when doing tax planning. Self-employed people often find it helpful to set aside approximately 9% of profits above the threshold monthly to avoid a large January bill. If your income fluctuates significantly year-to-year, your repayments will also fluctuate, which can make financial planning challenging but means you only pay based on what you actually earn.
Salary: £30,000. Threshold (Plan 2): £27,295. Income above threshold: £30,000 - £27,295 = £2,705. Annual repayment: £2,705 × 9% = £243.45. Monthly repayment: £243.45 ÷ 12 = £20.29. This relatively small monthly deduction demonstrates that student loans are affordable even on modest salaries. However, interest on Plan 2 loans can be 4-6% annually, meaning this person's £243 annual payment likely doesn't even cover the interest accruing on a typical £45,000 loan balance, so their debt continues growing despite making payments.
Salary: £40,000. Threshold (Plan 1): £24,990. Income above threshold: £40,000 - £24,990 = £15,010. Annual repayment: £15,010 × 9% = £1,350.90. Monthly repayment: £1,350.90 ÷ 12 = £112.58. Plan 1 has a lower threshold, so repayments kick in earlier and are higher for the same salary compared to Plan 2. However, Plan 1 interest rates are much lower, and the write-off period is 25 years rather than 30, making it generally more favorable for mid-to-high earners.
Salary: £50,000. Undergraduate threshold (Plan 2): £27,295. Postgraduate threshold: £21,000. Income above Plan 2 threshold: £50,000 - £27,295 = £22,705. Plan 2 repayment: £22,705 × 9% = £2,043.45. Income above Postgraduate threshold: £50,000 - £21,000 = £29,000. Postgraduate repayment: £29,000 × 6% = £1,740. Total annual repayment: £2,043.45 + £1,740 = £3,783.45. Monthly repayment: £315.29. This demonstrates the significant burden on graduates with both undergraduate and postgraduate loans, effectively paying 15% of income above the highest threshold.
Check your Student Loans Company account regularly online to see your current balance, interest charged, and repayments made. This helps you track whether you're likely to fully repay before write-off. If you're unlikely to repay in full (most Plan 2 borrowers), don't make voluntary overpayments as you're essentially paying money you'd never owe. Instead, use that money for pension contributions (which reduce taxable income and therefore student loan repayments too), emergency funds, or high-interest debt like credit cards. Understand that student loan repayments are effectively a 9% additional income tax until write-off or full repayment. When comparing job offers, factor in student loan repayments alongside income tax and National Insurance to calculate true take-home pay. A £32,000 job at a company with good pension matching might leave you better off than a £35,000 job with no pension, once you account for all deductions. If you're self-employed, set aside money monthly for your Self Assessment student loan payment to avoid a shock bill in January. Keep records of any periods of unemployment or low income as these can sometimes be incorrectly recorded by SLC. If you move abroad, notify SLC immediately and keep records of all communications and payments as their international borrower systems are notoriously problematic. Consider career salary progression: if you're in a field with strong salary growth potential (medicine, law, engineering, software), you might clear your debt before write-off, making overpayments more worthwhile. If you're in a sector with limited salary growth, write-off is almost certain, so optimize your finances accordingly. Finally, remember that having a student loan doesn't affect your credit score or mortgage applications in the UK, as repayments are income-contingent, not debt-servicing obligations like credit card or loan repayments.