Plan 5 has the lowest threshold (£25,000) and the longest write-off period (40 years). Plan 1 threshold is £24,990. How each plan reduces take-home at every salary.
| Feature | Plan 1 | Plan 5 |
|---|---|---|
| Repayment threshold (2026-27) | £24,990/year | £25,000/year |
| Repayment rate | 9% above threshold | 9% above threshold |
| Write-off period | 25 years | 40 years |
| Who is on it | Pre-Sept 2012 starters | Aug 2023+ starters (England) |
| Interest rate | RPI (capped) | RPI + 0% (capped) |
| Salary | Plan 1 repayment/mo | Plan 5 repayment/mo | Take-home (Plan 1) | Take-home (Plan 5) |
|---|---|---|---|---|
| £25,000 | £0.08 | £0 | £20,517 | £20,520 |
| £28,000 | £23 | £23 | £22,537 | £22,537 |
| £30,000 | £37.58 | £37.50 | £25,048 | £25,050 |
| £35,000 | £75.83 | £75 | £26,570 | £26,570 |
| £40,000 | £113 | £113 | £29,000 | £29,000 |
| £50,000 | £188 | £188 | £35,270 | £35,270 |
Plan 1 covers students who started undergraduate courses in England or Wales before September 2012, or in Scotland or Northern Ireland at any time. The repayment threshold for 2026-27 is £24,990 — only £10 per year below the Plan 5 threshold. The key advantage of Plan 1 is the shorter 25-year write-off period; many Plan 1 borrowers have already seen their loans written off.
Plan 5 applies to students who started undergraduate courses in England from August 2023 onwards. The 40-year write-off period means most borrowers will repay for a substantial portion of their working life. High earners (roughly above £45,000–£50,000 at career start) are likely to fully repay before write-off. Lower earners benefit from the write-off but pay more in total than under Plan 2.
At most salaries, Plan 1 and Plan 5 produce nearly identical monthly take-home — the thresholds differ by just £10/year. The major difference is long-term: Plan 1 write-off at 25 years vs Plan 5 at 40 years. If you expect high lifetime earnings, consider whether overpaying a Plan 5 loan makes sense; for Plan 1, the shorter write-off means many lower earners get the balance cleared automatically.
What is the difference between Plan 1 and Plan 5 student loan?
Plan 1 threshold is £24,990/year (2026-27) with a 25-year write-off. Plan 5 threshold is £25,000/year with a 40-year write-off. Both charge 9% on earnings above the threshold. Plan 1 is for students who started before September 2012; Plan 5 is for England students starting from August 2023 onwards.
Which student loan plan results in the lowest take-home pay?
At most salary levels the take-home difference is minimal — both charge 9% above their respective thresholds. Plan 5 borrowers start repaying from £25,000 (vs £27,295 for Plan 2), so they repay sooner and more. Plan 1 borrowers on lower salaries may repay less before the 25-year write-off than Plan 5 borrowers do in 40 years.
How much does Plan 5 cost per month on £30,000?
Plan 5: 9% on (£30,000 − £25,000) = 9% of £5,000 = £450/year or £37.50/month. Plan 1 at the same salary: 9% on (£30,000 − £24,990) = 9% of £5,010 = £450.90/year — virtually identical to Plan 5 at £30,000.
Does salary sacrifice affect student loan repayments?
Yes. Salary sacrifice pension contributions reduce your gross pay for student loan calculation purposes. A £30,000 earner with 5% salary sacrifice has an adjusted gross of £28,500 — repaying 9% on £3,500 (Plan 5) or £3,510 (Plan 1) rather than on £5,000. Saves approximately £135/year as a side benefit.
Free, accurate, 2026-27 rates. Scotland and tax code supported.