Plan b student loan increase

Cedric1408

I am 26 years old and have a Plan 2 student loan.
My balance has risen from approximately £29,000 in 2022 to over £32,000 in 2025 despite repayments being deducted through PAYE. According to my statements, interest added each year has exceeded my repayments, causing the balance to grow.
My earnings have been around £40,000 plus a small annual bonus, but I am shortly moving into a role paying approximately £70,000 per year.
Given my age, outstanding balance of around £32,000 and expected salary increase, does it now make financial sense to make voluntary overpayments, or should I continue making only the compulsory repayments?
I would be grateful for your thoughts, as I am struggling to understand whether this loan is likely to be repaid in full and whether overpaying would save me money in the long term.

Sncjw

Have you worked out how mucb you will pay based on tbe new salary? Then times it by how ever long is left on tbe student loan before being wiped. Yes I know tberes interest to add but could be a base of seeing if you will pay it off before then or not

kaMelo

You can make calculations based upon certain assumptions such as you earning £70,000 which will increase annually, but you also need to remember you may want to buy a home soon which will require a deposit. Any voluntary overpayments will reduce that deposit and, by extension, increase your mortgage borrowing.

Also bear in mind things out of your control may change. Your student loan repayment will reflect your earnings when they go up but also, should life throw a curveball, if they went down too. A mortgage lender will want their repayment no matter what may happen.

There really is no black and white answer, it all depends upon you and your situation.

silvercar

Welcome to the forum @annieedmondson.

I'll move this to the student board.

silvercar

You could play around with this calculator to see the effect of overpayments.

https://www.studentcalc.co.uk/

Is it money that could be put to better use eg a home deposit?

Are you likely to have your loan written off? Also, bear in mind there is pressure on the government to raise the threshold for repayments, so your repayments could reduce, effecting the pay back period.