Student Loan Repayments - when do the repayments kick in?

NormalforNorfolk

My child has secured a grad scheme job, and we’re just working out what monthly take home pay will be in order that they can start doing some budgeting to work out how much they can save and how much they will contribute in housekeeping. Starting salary will be £31,000 p.a. We believe the monthly repayment deducted via payroll will be £12 but is it deducted from day 1 or does it only get deducted once the cumulative pay reaches the threshold?

silvercar

I’ll move this to the student Board.

Congratulations to your offspring on getting a grad scheme, I hear it’s really difficult for new graduates in the market place at the moment,

Each month is considered independently. If at the end of the financial year her his total earnings are below the threshold, (s)he can ask for a refund of contributions. So I would expect that from month 1, (s)he will be making a payment.

On plan 2 loan, the threshold is £29,385, so (s)he would have £1,615 for repayments, that would be about £12 a month. If (s)he is starting work mid financial year, (s)he may not have earned £29,385 in the financial year and could then apply for a repayment of her/his contributions. (note that plan 5 loan threshold is £25k, so higher monthly repayments and a lower threshold to request a repayment.)

(Corrected figures.)

QrizB

We believe the monthly repayment deducted via payroll will be £12 but is it deducted from day 1 or does it only get deducted once the cumulative pay reaches the threshold?

Also note that SL repayments don't start until the tax year after they graduated, so if they're a summer 2026 graduate they won't be paying the SL 9% until their end-of-April 2027 payslip.

https://www.gov.uk/repaying-your-student-loan/when-you-start-repaying

(My eldest graduated this year and was worried that his employer wasn't taking SL repayments, but this was why.)

Ed-1

https://forums.moneysavingexpert.com/discussion/comment/82172102#Comment_82172102

Other way round.

Plan 2 threshold is £29,385.

Plan 5 threshold is £25,000.

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82172298#Comment_82172298

duh!! I’m blaming jet lag and altitude adjusting. Will correct. Thanks.

NormalforNorfolk

that’s great thank you, makes sense and I’d forgotten about the payments not starting to be deducted until the following financial year. - yes very proud because the process was really rigorous and thousands applied! As he’s only just starting the job and hasn’t worked prior to this in the financial year, he won’t be paying any tax for the time being either so we are encouraging him to take advantage of that to save as much as he possibly can.