Practical guide · stated assumptions and checkable examples
UK student-loan repayments in 2026/27: identify the plan first
Published · Sources checked
Source and worked-example review; not professional advice or approval. Examples are synthetic unless explicitly identified otherwise. Follow the cited authority for current eligibility and legal requirements.
A student-loan balance alone does not determine the current repayment deduction. The repayment plan, relevant income, payroll period and any postgraduate loan must be established before applying a threshold.
Use 2026/27 thresholds, not a future announcement
The reviewed annual thresholds are £26,900 for Plan 1, £29,385 for Plan 2, £33,795 for Plan 4 and £25,000 for Plan 5. Those plans use 9% above the applicable threshold. A postgraduate loan uses £21,000 and 6%. A threshold announced for a later tax year must not be silently substituted into a 2026/27 calculation.
References: Student Loans Company / GOV.UK — What you repay
A Plan 2 annual-income example
With synthetic annual relevant income of £40,000, the excess above the Plan 2 threshold is £10,615. At 9%, annualized modeled repayment is £955.35. A separate postgraduate loan at the same income produces (£40,000 − £21,000) × 6% = £1,140. Together the annualized scenario is £2,095.35. This is not a payslip-by-payslip reconciliation.
Calculation: Annualized plan repayment = max(0, relevant annual income − plan threshold) × repayment rate
Compare plans without changing the income
At the same £40,000 annual income, Plan 1 produces £1,179, Plan 4 produces £558.45 and Plan 5 produces £1,350 under this simple annual method. These differences explain why a generic “student loan” field without plan selection is insufficient. They do not establish which plan a borrower has. Check the account and employer information before choosing.
Repayments and interest are different models
The September 2026 interest announcement applies to a stated period and includes plan-specific rules and caps. It should not be extrapolated as a guaranteed interest rate for a loan’s remaining life. The annual repayment worksheet does not simulate future salaries, variable interest, future thresholds or the timing of full repayment. A balance-growth forecast needs those additional assumptions and a separate calculation.
References: Student Loans Company — September 2026 interest announcement
Write-off rules depend on the plan and dates
GOV.UK describes different write-off conditions, including distinctions within some plans by the timing of the first loan. A generic number of years is not enough to determine an individual write-off date. Also, payroll deductions can depend on the pay period and uneven earnings, so dividing the annualized figure by twelve is a budget approximation rather than a guarantee of each monthly deduction.
References: Student Loans Company / GOV.UK — When loans are written off
| Plan | Annual threshold | Modeled annual repayment |
|---|---|---|
| Plan 1 | £26,900 | £1,179.00 |
| Plan 2 | £29,385 | £955.35 |
| Plan 4 | £33,795 | £558.45 |
| Plan 5 | £25,000 | £1,350.00 |
| Postgraduate only | £21,000 | £1,140.00 |
Questions about this guide
Is the annual amount divided by twelve exactly my monthly deduction?
Not necessarily. Pay-period rules, uneven pay and payroll rounding can cause differences. The worksheet is explicitly annualized.
Does the repayment result forecast how much I will repay over the whole loan?
No. Lifetime repayment requires assumptions about future income, interest, thresholds, balance and the applicable write-off conditions.