Plan 5 Student Loans Now Repayable: £25,000 Threshold From April 2026
UK graduates who borrowed under the new Plan 5 scheme (from August 2023 onwards) begin repaying student loans from April 2026 with a lower annual threshold of £25,000, compared to Plan 2's £29,385.
Monthly repayments for the new Plan 5 student loans are scheduled to begin in April 2026. This scheme applies to students who started their course after 1st August 2023 and took out loans for maintenance or tuition fees. Unlike previous reforms, this scheme introduces a lower repayment threshold of £25,000 per year.
Plan 5 represents a significant change in how recent borrowers repay. Plan 5 has a lower threshold—£25,000 vs £28,470 for Plan 2—so you start paying sooner. Plan 5 graduates typically repay more over time because of the lower threshold and longer 40-year write-off period.
How Repayments Work
Student repayments are calculated on gross income, meaning they come out of the salary paid to the employee. Employed workers see deductions made automatically, while self-employed individuals pay annually. Repayments are 9% of income above the threshold — they do not appear on credit files and do not affect mortgage affordability like commercial debt.
For context, Plan 2 loans start repaying at £29,385 a year from April 2026; Plan 5 at £25,000. Employers and pay-roll systems have been updated to handle these deductions.
If you are a foreigner who completed a UK university degree after August 2023 and took out Plan 5 student loans, from 1 April 2026 your employer will begin deducting 9% of any earnings above £25,000 per year. If you are self-employed, report this through your Self Assessment tax return. Check your student finance plan type on your loan statement to confirm if you are on Plan 5.
Sources
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