UK Student Loan Calculator: Income-Contingent Repayment
Work out your UK student loan repayment — which is a percentage of income above your plan's threshold, not a fixed loan instalment — and how the rest of your above-threshold income is left.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Annual repayment | Income above threshold you keep |
|---|---|---|
| 9% of £10,000 above (£900) | 900 | 9,100 |
| 9% of £5,000 above | 450 | 4,550 |
| 6% of £10,000 above (postgrad) | 600 | 9,400 |
| 9% of £20,000 above | 1,800 | 18,200 |
How This Calculator Works
Subtract your plan's repayment threshold from your annual income, enter the excess, and choose your repayment rate (9% for most undergraduate plans, 6% for postgraduate). The calculator returns the annual repayment. UK student loans are income-contingent: you repay a fixed percentage of income above the threshold — nothing on income below it — collected automatically through PAYE, and any balance is written off after the plan's term.
The Formula
Percentage of an Amount
Amount is the base value, Percentage is the rate applied to it
Worked Example
On £10,000 of income above the threshold at 9%, the annual repayment is £900 (£75 a month). UK student loans don't work like ordinary loans. Repayments are income-contingent: you pay 9% (undergraduate plans) or 6% (postgraduate) of your income above a plan-specific threshold, regardless of how much you borrowed. If you earn below the threshold, you repay nothing. Repayments are deducted through PAYE like a tax, interest is added to the balance, and whatever remains unpaid is written off after the plan's term (e.g. 30 or 40 years depending on plan).
Key Insight
UK student loans behave more like a graduate tax than a conventional debt, and that changes how to think about them. The defining feature is income-contingent repayment: you repay a set percentage of income above a threshold, not a fixed monthly amount tied to the balance — 9% above the threshold for undergraduate plans (Plan 1, Plan 2, Plan 4 in Scotland, and Plan 5 for newer English students) and 6% for postgraduate Master's/Doctoral loans (Plan 3), with each plan having its own threshold and write-off period. Crucially, if your income is below the threshold you pay nothing, and repayments rise only as income rises, so the 'cost' depends on your earnings, not the loan size. Repayments are collected automatically via PAYE (or Self Assessment), much like income tax. Two things this calculator deliberately leaves out: interest, which accrues on the balance (rates vary by plan and can be inflation-linked or income-linked), and the write-off — any remaining balance is cancelled after the plan's term (commonly 30 years for Plan 2, 40 years for Plan 5), which means many borrowers never repay in full. This has a counter-intuitive implication: because of the write-off, making voluntary overpayments often doesn't pay off for lower-and-middle earners who won't clear the loan anyway — the repayment behaves like a 9% surcharge on income above the threshold for the term, then stops. Note that if you have both an undergraduate and a postgraduate loan, you can be repaying 9% and 6% simultaneously on income above the relevant thresholds. This calculator shows the annual repayment as the percentage of the above-threshold income you enter; for your figure, use your plan's correct threshold and rate, and remember interest and the eventual write-off determine whether you ever clear the balance.
Plan 1 vs Plan 2 vs Plan 4 vs Plan 5: which one applies to you
UK student loan repayment depends on the Plan you're on, which depends on when and where you started university. Plan 1: started before September 2012 in England/Wales, OR Northern Ireland (any year). Threshold 2026-27: £24,990. Rate: 9% above threshold. Writeoff: 25 years after first April due (or age 65 depending on cohort).
Plan 2: started September 2012-2022 in England/Wales. Threshold 2026-27: £28,470. Rate: 9% above threshold. Writeoff: 30 years after first April due. Interest: RPI to RPI+3% depending on income — the variable interest rate is the big difference from Plan 1.
Plan 4: Scottish students (any year started in Scotland). Threshold 2026-27: £31,395 (higher than Plan 2). Rate: 9% above threshold. Writeoff: 30 years. Plan 5: English/Welsh students starting September 2023 or later. Threshold 2026-27: £25,000 (low). Rate: 9% above threshold. Writeoff: 40 YEARS (extended from 30). Plan 5 is the most punishing for moderate earners — lower threshold, longer writeoff.
It's a graduate tax, not a loan: when overpaying is wrong
UK student loans behave more like a 9% graduate tax than a debt. Repayments are income-based (not balance-based), the loan eventually writes off, and most borrowers never repay the full balance. This fundamentally changes the math on overpayment decisions.
Worked example for a Plan 2 graduate earning £40,000: salary £11,530 above the £28,470 threshold. Annual repayment: 9% × £11,530 = £1,037.70. The repayment amount depends ONLY on income — not the loan balance, not the interest rate. Whether you owe £20,000 or £80,000, repayments are identical. Overpaying $5,000 today doesn't reduce future repayments — it just reduces the amount that would have been written off in 30 years.
Who benefits from overpaying: only borrowers on track to fully repay before the writeoff date. For Plan 2, that's typically those who earn well above £50-60,000 throughout their entire career (rare). Plan 5 will be even fewer (40-year writeoff means most never repay). Decision rule: if the calculator estimates you'll repay <80% of your balance before writeoff, NEVER make voluntary overpayments — that money is better in pension or ISA.
The 'salary sacrifice' interaction: pensions reduce student loan
Student loan repayments are calculated on taxable income — meaning anything that reduces taxable income (workplace pension contributions, salary sacrifice schemes) also reduces student loan repayments. This creates a powerful effective rate on pension contributions for graduates.
Worked example: a Plan 2 graduate earning £40,000 considering an extra £2,000 of pension contribution. Direct income tax saving: £2,000 × 20% = £400. Plus National Insurance saving: £2,000 × 8% = £160 (employee NI rate). Plus student loan saving: £2,000 × 9% = £180. Total effective benefit per £2,000: £740 — a 37% effective tax relief, not the headline 20%. The 'true' net cost of the £2,000 pension contribution is only £1,260.
For Plan 5 graduates (lower threshold £25,000), almost ANY salary increase from £25k+ triggers 9% student loan deduction PLUS income tax PLUS NI — the combined marginal rate can exceed 50% in some bands. This makes pension salary sacrifice particularly attractive: it bypasses NI for both employer and employee, plus reduces student loan, plus reduces income tax.
UK student loan repayment by salary and Plan (2026-27)
Annual repayment = 9% × (salary − Plan threshold). For Plan 5, this is even more punishing because the threshold is lower (£25,000 vs £28,470 Plan 2) so repayments start earlier and continue longer.
| Annual salary | Plan 1 (£24,990) | Plan 2 (£28,470) | Plan 4 (£31,395) | Plan 5 (£25,000) |
|---|---|---|---|---|
| £25,000 | £1 (just above) | £0 | £0 | £0 |
| £30,000 | £451 | £138 | £0 | £450 |
| £40,000 | £1,351 | £1,038 | £775 | £1,350 |
| £50,000 | £2,251 | £1,938 | £1,675 | £2,250 |
| £75,000 | £4,501 | £4,188 | £3,925 | £4,500 |
Repayments deducted by employer through PAYE. Self-employed pay via Self Assessment. Interest accrues at RPI+ (varies by plan and income). Writeoff: 25 years Plan 1, 30 years Plans 2/4, 40 years Plan 5.
Frequently Asked Questions
How is my UK student loan repayment calculated?
It's a percentage of your income above your plan's threshold — not a fixed instalment. Subtract the threshold from your income, then apply 9% (undergraduate) or 6% (postgraduate). On £10,000 above the threshold at 9%, you repay £900 a year (£75/month). Income below the threshold isn't charged.
Why isn't it like a normal loan?
Because repayments are income-contingent, behaving like a graduate tax: you pay a percentage of income above a threshold regardless of how much you borrowed, collected through PAYE. If you earn below the threshold you pay nothing, and any balance left after the plan's term (e.g. 30 or 40 years) is written off.
What are the repayment rates and thresholds?
9% of income above the threshold for undergraduate plans (Plan 1, 2, 4, 5) and 6% for postgraduate loans (Plan 3). Each plan has its own income threshold and write-off period. Use your plan's threshold to work out the 'income above threshold' figure, and the matching rate here.
Should I make voluntary overpayments?
Often not, for lower-and-middle earners. Because the balance is written off after the plan's term, many borrowers never repay in full — so overpaying can be money wasted on a loan that would have been cancelled. It mainly benefits high earners who'll clear the loan before write-off. Consider your expected lifetime earnings.
Can I be repaying two loans at once?
Yes — if you have both an undergraduate and a postgraduate loan, you can repay 9% on income above the undergraduate threshold and 6% above the postgraduate threshold at the same time. Each is calculated separately on the income above its own threshold, so use this calculator once per loan.
References & Authoritative Sources
- Student Loans Company (SLC) — Repayment thresholds and rates for 2026-27 · consulted May 31, 2026 · Official repayment administrator — current thresholds, plan details, repayment process
- Department for Education — Student finance and repayment — official guide · consulted May 31, 2026 · Policy department — Plan 5 introduction (2023+), writeoff periods, interest rules
- Higher Education and Research Act 2017 — Statutory basis for Plan 2/5 loan terms · consulted May 31, 2026 · Statutory framework for English/Welsh student loans post-2012
Related Calculators
Methodology & Review
The annual repayment is the plan's percentage applied to income above the repayment threshold; enter only the income above the threshold. It models the income-contingent repayment and does not pick the threshold or rate for your plan, account for interest accruing on the balance, or the write-off after the plan's term.
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