Plan 5 Student Loans: Threshold, Repayment, Interest and Write-Off
Plan 5 borrowers repay 9% of income above £25,000 a year (£2,083 a month) in 2026-27, and any balance left is written off after 40 years.
- Threshold (2026-27)
- £25,000
- You repay
- 9%
- Written off after
- 40 years
Source: GOV.UK, Repaying your student loan: how much you repay (opens in a new tab)
Plan 5 student loans are for English undergraduates who started a course on or after 1 August 2023. The 2026-27 Plan 5 student loan repayment threshold is £25,000 a year (£2,083 a month), and you repay 9% of income above it. Interest is RPI only, 4.1% until 31 August 2027, and the balance is written off after 40 years.
Written by Student Loan Calculator UK Editorial Team, reviewed by Student Loan Calculator UK Editorial Team ·
Plan 5 is one of five UK student loan plans. This page holds the rules and the worked examples; for your own figures, use the Plan 5 repayment calculator, which shows your monthly repayment, total repaid and write-off date. The RPI-only rate is set each September (see the interest section below); for a side-by-side with the plan it replaced, see Plan 2 vs Plan 5.
Who is on Plan 5?
Plan 5 is the newest and, from here, the fastest-growing UK student loan plan. You are on Plan 5 if you started an eligible undergraduate course in England on or after 1 August 2023. First Plan 5 repayments became due in April 2026, so most Plan 5 borrowers are only just starting to see deductions on their payslip. Because every new English undergraduate now enters on Plan 5, its borrower base grows with each intake while Plan 2 — closed to new starters since August 2023 — shrinks. Within a few years Plan 5 will overtake Plan 2 as the largest UK plan by borrower count.
Plan 5 is England-only. If you studied in Wales from the same date you stayed on Plan 2, because Wales chose not to adopt the reform. Scottish students remain on Plan 4 through SAAS, and Northern Irish students remain on Plan 1 regardless of start year. If you are unsure which plan applies to you, work through what student loan plan am I on before assuming.
A few situations change how Plan 5 works in practice. Moving overseas after graduation does not pause the loan, but it does change how it is assessed; see our page on Plan 5 repayments while living abroad. Taking maternity leave affects the income used for the 9% calculation during that period, covered in Plan 5 and maternity leave. And because deductions scale with income, the practical effect of Plan 5 is very different for high earners than for low earners. Borrowers who also took out a Master's or Doctoral loan should read how the two are repaid together in Plan 5 with a postgraduate loan.
Plan 5 student loan repayment: threshold and 9% rate (2026-27)
The Plan 5 repayment threshold for 2026-27 is £25,000 annually. Unlike Plan 1 and Plan 4, which rise each year with inflation, Plan 5 has been frozen at £25,000 since it launched, and stays frozen until April 2027, after which it is uprated annually. Below the threshold you repay nothing. Above it you repay 9% of the gross excess only, taken by your employer through PAYE each pay period or, if you are self-employed, through your Self Assessment bill.
| Period | Threshold |
|---|---|
| Annual | £25,000 |
| Monthly | £2,083 |
| Weekly | £480 |
Plan 5 interest rate
The Plan 5 interest formula is RPI (currently 4.1%). Plan 5 is the only UK undergraduate plan with no above-inflation margin at all: Plan 2 and the Postgraduate Loan can charge RPI plus up to 3% (capped at 6%), and Plan 1 and Plan 4 cap at the lower of RPI or Bank of England base rate plus 1%. The live Plan 5 rate is 4.1% (RPI March 2026), in force from 1 September 2026 to 31 August 2027, applying equally while studying and after graduation, with no sliding scale by income. Interest is calculated daily on your outstanding balance and added monthly. Because the balance never grows faster than inflation, Plan 5's real-terms cost is more predictable than Plan 2's income-linked rate. The rate is reset each September.
Plan 5 write-off rule
Plan 5 balances are written off 40 years after the first 6 April following the end of your course — the longest write-off of any UK student loan plan, ten years longer than Plan 2's 30 and fifteen years longer than Plan 1's 25. Death and permanent disability also trigger immediate cancellation. For a borrower who started university at 18-19, the 40-year clock means write-off typically falls in their early sixties rather than their late forties or early fifties, so a much larger share of a working career is spent making Plan 5 repayments. Check your exact date with our loan write-off checker.
Worked example: £30,000 graduate on Plan 5
Take a borrower earning a flat £30,000 gross salary for the 2026-27 tax year. The Plan 5 calculation is:
- Income above threshold: £30,000 − £25,000 = £5,000
- Annual repayment: 9% × £5,000 = £450
- Monthly repayment (PAYE): £37.50
Because the Plan 5 threshold (£25,000) is lower than Plan 2's (£29,385), this borrower pays more per month than an equivalent Plan 2 graduate on the same salary (£4.61 a month). The offsetting benefit is Plan 5's lower, RPI-only interest rate, which slows balance growth relative to Plan 2's sliding scale.
Worked example: £50,000 graduate on Plan 5
A higher-earning Plan 5 borrower on £50,000 sees the following numbers:
- Income above threshold: £50,000 − £25,000 = £25,000
- Annual repayment: 9% × £25,000 = £2,250
- Monthly repayment (PAYE): £187.50
At £50,000, this borrower's Plan 5 interest rate stays at 4.1% (RPI March 2026) regardless of income — unlike Plan 2, where the same salary would push the rate toward the top of its sliding scale. That makes Plan 5 comparatively cheaper for sustained high earners, which is reflected in the government's own projection that around 56% of Plan 5 borrowers will repay in full, against roughly 20% on Plan 2. Use the overpayment calculator to model whether voluntary overpayment makes sense at your salary.
Plan 5 vs other Plans
Compared with Plan 2 (England 2012-2023, Wales post-2012), Plan 5 has a lower threshold (£25,000 vs £29,385 in 2026-27) so repayments start earlier, a lower interest cap (RPI only, against RPI to RPI+3% on Plan 2), and a longer write-off: Plan 5 runs 40 years against Plan 2's 30. Against Plan 1 (pre-2012 England/Wales plus Northern Ireland, threshold £26,900), Plan 5 has a lower threshold but a much longer write-off period. Against Plan 4 (Scotland, threshold £33,795, interest set at the lower of RPI or Bank of England base rate plus 1%), Plan 5 borrowers start repaying at a much lower salary. Read our Plan 2 vs Plan 5 comparison for a side-by-side worked example across earning bands, our Plan 4 vs Plan 5 comparison if you could have studied in either Scotland or England, or the full UK thresholds guide for every plan in one table.
FAQs
What is the Plan 5 threshold for 2026-27?
The Plan 5 repayment threshold for 2026-27 is £25,000 per year, £2,083 monthly and £480 weekly. You repay 9% of any gross income above this level. The threshold has been frozen at £25,000 since Plan 5 launched and stays frozen until April 2027, after which it rises annually. This is lower than Plan 2's £29,385 threshold.
Who is on Plan 5?
Plan 5 covers every English undergraduate who started their course on or after 1 August 2023. It is England-only: Welsh students starting from the same date stayed on Plan 2, Scottish students remain on Plan 4, and Northern Irish students remain on Plan 1. Because Plan 5 now applies to every new English undergraduate, its borrower base grows with each intake.
What is the Plan 5 interest rate in 2026?
Plan 5 interest is RPI only, with no added percentage, both while studying and after graduation. The applicable rate is 4.1% (RPI March 2026). Interest accrues daily on the outstanding balance from the day you receive each payment.
When is a Plan 5 loan written off?
Plan 5 loans are written off 40 years after the April following the end of your course, the longest write-off of any UK plan. Death and permanent disability also trigger immediate cancellation.
Is Plan 5 better or worse than Plan 2?
It depends on lifetime earnings. High earners benefit from Plan 5's lower, RPI-only interest rate. Low and middle earners typically pay more overall under Plan 5 because of the lower threshold and 40-year write-off. Which way it goes for you depends on where your earnings sit across those 40 years.
Can I pay off my Plan 5 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. With Plan 5's RPI-only interest, overpayment is more often worthwhile for high earners than on Plan 2, but for most graduates the 40-year write-off means it still is not the best use of spare income.
Does Plan 5 affect my credit score?
No. Plan 5 loans do not appear on UK credit files and do not affect your credit score. However, mortgage and personal loan underwriters do factor your monthly Plan 5 deduction into affordability calculations.
Plan 5 optimization strategies
Because Plan 5's interest rate carries no above-inflation margin, the overpayment decision is closer to break-even than it is on Plan 2, but the 40-year write-off still means most typical earners are better off treating Plan 5 as a graduate tax rather than a debt to clear early. Voluntary overpayment tends to pay off only for borrowers who sustain a salary well above the higher-rate tax threshold across most of their career. Salary sacrifice into a pension reduces the income used for the 9% calculation, lowering your monthly Plan 5 deduction while boosting retirement savings — a meaningful hidden saving worth modelling in our pension vs overpayment guide.