Plan 1 vs Plan 2 Student Loans
Comparing pre-2012 and post-2012 UK student loan repayment plans
Key Differences at a Glance
| Feature | Plan 1 | Plan 2 |
|---|---|---|
| Who has it? | Students who started before Sept 2012 in England/Wales, or Northern Irish students | Students who started between Sept 2012 and Aug 2023 in England/Wales |
| Repayment Threshold | £22,015 per year | £27,295 per year |
| Interest Rate | Lower of RPI or Bank of England base rate + 1% | Variable from RPI to RPI+3% depending on income |
| Write-off Period | 25 years after graduation or age 65 | 30 years after graduation |
| Average Loan Size | £12,000-£25,000 | £40,000-£60,000 |
Plan 1 and Plan 2 are the two main undergraduate student loan types in the UK, introduced at different times and with significantly different terms. This guide provides a detailed comparison to help you understand the key differences and how they affect your repayments.
Repayment Comparison
The most obvious difference between Plan 1 and Plan 2 is when you'll start making repayments. With Plan 1's lower threshold (£22,015), you'll start repaying sooner than with Plan 2 (£27,295).
Monthly Repayment Comparison
| Annual Salary | Plan 1 Monthly Repayment | Plan 2 Monthly Repayment | Difference |
|---|---|---|---|
| £25,000 | £22.40 | £0 | £22.40 more on Plan 1 |
| £30,000 | £59.89 | £20.29 | £39.60 more on Plan 1 |
| £35,000 | £97.38 | £57.79 | £39.59 more on Plan 1 |
| £40,000 | £134.88 | £95.29 | £39.59 more on Plan 1 |
| £50,000 | £209.86 | £170.29 | £39.57 more on Plan 1 |
Key Takeaway on Repayments
Plan 1 borrowers consistently pay more per month at any given salary level compared to Plan 2 borrowers. This is because:
- The Plan 1 threshold is £5,280 lower than Plan 2
- This creates a consistent difference of about £39.60 per month (£5,280 × 9% ÷ 12)
- At salaries below the Plan 2 threshold, the difference can be even more significant
Calculate Your Repayments
Use our calculators to see exactly how much you'll repay on your specific loan plan