Repayment Threshold 2026/27

Ed-1

With RPI for March in at 3.2%, from 6 April 2026 the repayment threshold for
• plan 1 loans will rise to £26,900 (26,065 x 1.032 rounded up)
• plan 2 loans will rise to £29,385 (28,470 x 1.032 rounded up)
• plan 4 loans will rise to £33,795 (32,745 x 1.032 rounded up).

The postgraduate (plan 3) threshold remains frozen at £21,000.

The plan 5 threshold is £25,000 (this threshold comes into force for the first time from 6 April 2026).

From 1 September 2025, interest rates for
• plan 1, plan 4 and plan 5 loans will be 3.2%
• plan 2 loans will range from 3.2% to 6.2% depending on whether you are studying or not (including the period until April after finishing) and what you earn if you are in repayment
• postgraduate (plan 3) loans will be 6.2%

Ed-1

Updated with latest announcements.

Ed-1

Ed-1 said:

Updated with latest announcements.

Updated again with latest announcements.

https://www.gov.uk/government/news/student-loans-interest-and-repayment-threshold-announcement-for-plan-2-and-plan-3-loans

It has also been announced that the plan 2 threshold will be frozen for 3 years at £29,385 from April 2027.

johnnymorrison66

I remember Martin Lewis dismissing poor students fears of repaying loans with the Martin Lewis ‘Guarantee’  Not to worry you’ll either earn lots of more money in a graduate roll or you’ll probably never have to pay it off as the debt will be eventually written off. Now the Loan repayment threshold is very close to minimum wage, and with many former students struggling to find graduate roles, and forced into low paying jobs, they’ll actually be saddled  with debts of tens of thousands that MUST be repaid and still getting near minimum wage. I do hope Martin revises his advice! 

silvercar

johnnymorrison66 said:

I remember Martin Lewis dismissing poor students fears of repaying loans with the Martin Lewis ‘Guarantee’  Not to worry you’ll either earn lots of more money in a graduate roll or you’ll probably never have to pay it off as the debt will be eventually written off. Now the Loan repayment threshold is very close to minimum wage, and with many former students struggling to find graduate roles, and forced into low paying jobs, they’ll actually be saddled  with debts of tens of thousands that MUST be repaid and still getting near minimum wage. I do hope Martin revises his advice! 

All student loans have a write off, even if longer than before. There is no student loan that MUST be repaid.

The change in the advice is because more people will pay off their loans, so will be effected by the length of the loan and interest rates than before.

sheila18

it was interesting to hear Martin's interview with the Chancellor in which she made the comment that everyone was being asked to pay a little more and that 34% of students will have their loans written off in 30years time from the start of their plan 2 loan
my grand daughter is in second year of primary school teaching
On a modest initial student loan of £40,000 , with assumed increases at RPI rate of 4.3% and promotional increases of £5000 every 5 years and with threshold increments at RPI and interest charged at 6.2% throughout the end result after 30years is ; repayments made £80,395 and balance of loan to be written off £102,687
Then applying calculations from the budget with three year freeze on thresholds the result would be repayments made £99,907 (a 24% increase) and balance of loan after 30 years £60,490 for write off
On plan 2 loan "the little bit more" will be £19,512!!
The plan 2 interest rate is 6.2% whereas the plan 5 rate is 3.2% for up to 40years 
Were the interest rate  be reduced on plan 2 loans at the time of freezing the thresholds to the rate for plan 5 loans of 3.2% then the total repayments made would be £74,857 and the loan would fully paid off in its 28th.
Student loan repayments would be higher over the next few years as a result of the threshold freezing and would therefore not effect Government forecasts
But a change such as above would give students an aspiration to clear their loans towards the end of the loan period
Surely this would be a better result for all parties

silvercar

@sheila18, better to consider it a graduate tax.

I imagine she won't be earning enough on a teachers starting salary to be hit with a 6.2% interest rate initially. Promotions won't always lead to £5k rises in teaching and will become more sporadic as she moves up the career ladder.

She may also decide to take time out/ travel the word/ further study/ work part time.... Assuming a full career of 40 years in teaching is a big assumption.