Plan 1 Student Loans Explained: UK Repayment Rules

Written by Student Loan Calculator UK Editorial Team, reviewed by Student Loan Calculator UK Editorial Team · 5 October 2026

Who is on Plan 1?

Plan 1 is the oldest still-active UK student loan plan. You are on Plan 1 if you started an eligible higher-education course in England or Wales before 1 September 2012, or if you started any UK undergraduate course while normally resident in Northern Ireland (regardless of year). Northern Ireland never adopted Plan 2 or Plan 5, so a 2024 starter at Queen's University Belfast is on Plan 1 just like a 2008 starter at Manchester.

The cohort is now largely 30- to 50-year-old graduates who have been repaying through PAYE for over a decade. A meaningful share of original Plan 1 balances has already been written off as borrowers reach the 25-year cutoff or, for pre-2006 English borrowers, the age-65 cutoff. Plan 1 is also the plan you fall back to if your immigration status changes mid-course or if a Plan 2 borrower transfers under specific SLC rules. If you are unsure, work through what student loan plan am I on before assuming, or compare all five UK student loan plans side by side.

You can hold student loan Plan 1 and 2 at the same time if you took a second undergraduate course after September 2012. HMRC does not run two deductions: your employer takes a single 9% of pay above the lower Plan 1 threshold. SLC then splits it: the 9% on the slice of pay between the Plan 1 and Plan 2 thresholds, £18.63 a month in 2026-27, goes to the Plan 1 loan, and everything above that goes to Plan 2^[source]. The Plan 1 vs Plan 2 comparison sets the two plans side by side across salaries.

Plan 1 repayment threshold (2026-27)

The Plan 1 repayment threshold for the 2026-27 UK tax year is £26,900 annually. The Department for Education raises Plan 1 each April in line with the previous September's RPI — one of the few thresholds still inflation-linked. Below the threshold you repay nothing. Above it you repay 9% of the gross excess only.

Plan 1 interest rate

The Plan 1 interest formula is min(RPI, BoE base rate + 1%). Whichever number is lower in any given month becomes that month's rate. The Bank of England base rate leg was added to protect Plan 1 borrowers from RPI spikes, which is why Plan 1 never carries the RPI + 3% margin that can apply to Plan 2 and the Postgraduate Loan. The live Plan 1 rate is 4.1% (RPI March 2026), which applies from 1 September 2026 to 31 August 2027. Interest is calculated daily on your outstanding balance and added monthly. Because Plan 1 carries no positive real interest margin in steady state, balances grow much more slowly than Plan 2 or Postgraduate Loan, and many disciplined repayers clear the loan before write-off^[source].

Plan 1 write-off rule

Plan 1 balances are written off 25 years after the first 6 April following the end of your course. For pre-September-2006 English borrowers a second cutoff applies: write-off also happens at age 65 if that arrives first. Northern Irish borrowers and post-2006 English/ Welsh Plan 1 borrowers use the 25-year rule only. The write-off is automatic, requires no application, and the balance is removed from your SLC account without any credit-file impact or tax charge. If you have been repaying since the late 1990s under the pre-2006 rules, you may already be eligible for write-off^[source] — check our loan write-off checker for your exact date.

Worked example: £30,000 graduate on Plan 1

Take a borrower earning a flat £30,000 gross salary for the 2026-27 tax year. The Plan 1 calculation is:

• Income above threshold: £30,000 − £26,900 = £3,100
• Annual repayment: 9% × £3,100 = £279
• Monthly repayment (PAYE): £23.25

This sits at the lower end of what most graduates pay. Because Plan 1 interest in 2026-27 is capped at RPI, the loan balance grows only with inflation. A £30,000 earner who stays at that salary indefinitely will see their nominal balance creep upward while the real balance stays roughly flat. Pay rises that lift income above £40,000 accelerate clearance significantly. Compared with a Plan 2 borrower on the same salary (£4.61 a month), the Plan 1 deduction is higher because the threshold is lower, but Plan 1 interest is also lower, so total lifetime cost depends on full earning trajectory rather than starting salary alone.

Worked example: £50,000 graduate on Plan 1

A higher-earning Plan 1 borrower on £50,000 sees the following numbers:

• Income above threshold: £50,000 − £26,900 = £23,100
• Annual repayment: 9% × £23,100 = £2,079
• Monthly repayment (PAYE): £173.25

At £50,000 the borrower is repaying roughly £2,079 per year. Because Plan 1 interest is the lower of RPI or BoE+1% (4.1% (RPI March 2026)), the loan typically clears well before the 25-year write-off for any borrower who sustains a salary above £45,000 across their career. Plan 1 borrowers in the higher-rate tax band almost always fully repay the loan, making voluntary overpayment economically rational in many cases — unlike Plan 5 where overpayment is rarely worthwhile. Use the overpayment calculator to model the trade-off against pension contributions.

Plan 1 vs other Plans

Compared with Plan 2 (post-2012 English/Welsh), Plan 1 has a lower threshold (£26,900 vs £29,385 in 2026-27) so repayments start earlier, but a far lower interest cap (the lower of BoE+1% or RPI, against RPI to RPI+3% on Plan 2) so the balance grows much more slowly. Against Plan 4 (Scottish SAAS, threshold £33,795), Plan 1 demands repayment £6,895 earlier on the income scale but with similar long-run interest cost. Plan 1 is also structurally cheaper than Plan 5, because Plan 1 clears at the 25-year cutoff while Plan 5 (England only, courses starting on or after 1 August 2023, threshold £25,000) runs for a full 40 years before write-off. Plan 1 borrowers who also took out a Postgraduate Loan stack the 6% PGL deduction on top of the 9% Plan 1 deduction, with separate thresholds. Read our Plan 1 vs Plan 2 comparison for a side-by-side worked example across earning bands, or the full UK thresholds guide for every plan in one table.

FAQs

What is the Plan 1 threshold for 2026-27?

The Plan 1 repayment threshold for 2026-27 is £26,900 per year, £2,241 monthly and £517 weekly. You repay 9% of any gross income above this level. The Plan 1 threshold rises each April in line with RPI inflation. Plan 5 is different: it is frozen at £25,000 until April 2027. Plan 2 rose to £29,385 in April 2026 and is then frozen at that level from April 2027 to April 2030.

Who is on Plan 1?

Plan 1 covers English and Welsh undergraduates who started their course before 1 September 2012, plus all Northern Irish undergraduates regardless of start year. Northern Ireland never moved to Plan 2 or Plan 5, so a 2024 NI undergraduate is still on Plan 1. If you started in England or Wales between September 2012 and August 2023 you are on Plan 2, not Plan 1.

What is the Plan 1 interest rate in 2026?

Plan 1 interest is the lower of RPI or the Bank of England base rate plus 1%. The applicable rate is 4.1% (RPI March 2026), which runs from 1 September 2026 to 31 August 2027. Interest accrues daily on the outstanding balance from the day you receive each tuition or maintenance payment.

When is a Plan 1 loan written off?

Plan 1 loans are written off 25 years after the April following the end of your course. Pre-2006 English borrowers have an additional rule: write-off also happens at age 65 if that comes first. Most current Plan 1 borrowers are in their late thirties to fifties; balances are routinely written off each year as borrowers reach the 25-year point.

Can I pay off my Plan 1 loan early?

Yes. You can make voluntary overpayments at any time through the Student Loans Company online account, by bank transfer or by direct debit. Because Plan 1 has the lowest interest cap of any UK plan, early repayment usually only makes sense if you are within a few years of full repayment, otherwise the money is better placed in pension contributions or higher-interest debt repayment.

Does Plan 1 affect my credit score?

No. Plan 1 loans do not appear on UK credit files (Experian, Equifax, TransUnion) and do not affect your credit score. However, mortgage and personal loan underwriters do factor your monthly Plan 1 deduction into affordability calculations, reducing the maximum they will lend by roughly four times the annual repayment amount.

What happens if I move abroad?

You must notify the Student Loans Company within three months of leaving the UK and complete an Overseas Income Assessment Form each year. The Plan 1 threshold is adjusted to your country's cost of living using SLC bands A, B or C. Failure to provide income evidence triggers a fixed monthly repayment which is typically higher than the income-based amount.

Student loan Plan 1 and 2: what is the difference?

Plan 1 has a lower threshold (£26,900 vs £29,385 in 2026-27), a lower interest rate cap (the lower of BoE+1% or RPI, against RPI to RPI+3% on Plan 2) and a shorter write-off period: Plan 1 writes off after 25 years, Plan 2 after 30. A Plan 1 borrower on £30,000 repays £23.25 a month; a Plan 2 borrower on £30,000 repays £4.61 a month. If you hold both, HMRC deducts a single 9% above the lower Plan 1 threshold; SLC sends the 9% on the slice between the two thresholds (£18.63 a month in 2026-27) to the Plan 1 loan and everything above that to Plan 2.

Plan 1 optimization strategies

Because Plan 1 carries the lowest interest rate of any UK student loan plan and the shortest write-off period, most Plan 1 borrowers who earn above the higher-rate threshold (£50,270) will repay in full long before the 25-year cutoff. The optimization question is whether overpayment is worth it. As a rule of thumb, voluntary repayment beats extra pension contribution only if you are within roughly 5 years of full repayment and your pension contribution would not capture employer matching. Salary sacrifice into pension reduces the income above threshold and therefore the monthly Plan 1 deduction — a meaningful hidden saving worth modelling in our pension vs overpayment guide. Avoid lump-sum overpayment in the final 12 months — deductions continue under PAYE until the SLC informs HMRC, often resulting in a refundable over-deduction.