Complete guide to when you start repaying your UK student loan
The repayment threshold is the minimum income level at which you start making student loan repayments. If you earn below this amount, you make no repayments at all—regardless of how much you owe or how long you've had your loan.
This guide explains the current thresholds for all UK student loan plans, how the system works, and what happens when your income crosses these important boundaries.
| Loan Plan | Annual Threshold | Monthly Threshold | Weekly Threshold | Repayment Rate |
|---|---|---|---|---|
| Plan 1 | £26,900 | £2,242 | £517 | 9% |
| Plan 2 | £29,385 | £2,449 | £565 | 9% |
| Plan 4 | £33,795 | £2,816 | £650 | 9% |
| Plan 5 | £25,000 | £2,083 | £481 | 9% |
| Postgraduate | £21,000 | £1,750 | £403 | 6% |
These thresholds apply from April 2026 (2026/27 tax year). Source: HMRC Employer Bulletin December 2025.
Each loan plan has a different repayment threshold, reflecting when the loan was taken out and the terms agreed at that time. The thresholds are reviewed annually and may change based on inflation and government policy.
If you have multiple student loans (e.g., undergraduate and postgraduate), you'll repay on both once your income exceeds each respective threshold.
Understanding how thresholds work is crucial for managing your finances as a graduate:
The threshold isn't a cliff edge where you suddenly start paying a large amount. You only repay a percentage of the income that exceeds the threshold.
If you're employed, your repayments are deducted through PAYE (Pay As You Earn) alongside tax and National Insurance:
If your income is below the repayment threshold:
Your repayment threshold is based on your total income before tax, including:
Benefits such as Universal Credit, Housing Benefit, and Child Benefit are not included in the calculation of your repayment income.
Repayment thresholds are reviewed and updated annually, though the method varies by loan plan:
Thresholds typically increase each year in line with RPI (Retail Price Index) inflation, helping to maintain the real-terms value of the threshold over time.
The Plan 2 threshold was frozen at £27,295 from 2021/22 to 2024/25. From April 2025, the threshold increased to £28,470, and from April 2026 it rises to £29,385. However, the government has announced the Plan 2 threshold will be frozen at £29,385 until April 2030, meaning it will not increase with inflation during this period.
Plan 5 thresholds are set to increase annually in line with average earnings, which typically grow faster than RPI inflation. This means Plan 5 graduates benefit from thresholds that keep pace with wage growth.
The postgraduate threshold has remained at £21,000 since the loan was introduced in 2016. The government has not announced plans to increase it, meaning it has fallen significantly in real terms.
Threshold changes are announced by the government each year, usually in the autumn Budget. Always check the latest figures from the Student Loans Company or gov.uk, as thresholds can be changed by government policy.
To give you context on how thresholds have evolved:
| Tax Year | Plan 1 | Plan 2 | Plan 4 |
|---|---|---|---|
| 2020/21 | £19,390 | £26,575 | £25,000 |
| 2021/22 | £19,895 | £27,295 | £25,375 |
| 2022/23 | £20,195 | £27,295 | £25,375 |
| 2023/24 | £22,015 | £27,295 | £27,660 |
| 2024/25 | £24,990 | £27,295 | £31,395 |
| 2025/26 | £26,065 | £28,470 | £32,745 |
| 2026/27 | £26,900 | £29,385 | £33,795 |
Plan 2 was frozen for several years while other plans increased. From April 2026, Plan 2 rises to £29,385 but will then be frozen at this level until April 2030.
If you have multiple sources of income, the threshold system can work differently:
Each employer assesses your income separately for student loan purposes:
You have:
What happens:
If you're self-employed, repayments work differently:
If you're both employed and self-employed:
You can claim a refund if:
Contact the Student Loans Company with evidence (payslips, P60) to claim any overpayments. Refunds are usually processed within 4-6 weeks.
Use our calculator to see exactly how much you'll repay based on your income and loan plan
UK Education Policy Specialist
With over 15 years of experience in UK education policy and student finance, Dr. Sharma founded Student Loan Calculator UK to help students navigate the complex world of student loans.