Plan 2 Student Loan Repayment Thresholds Rise to £29,385 in April 2026—Then Freeze
New repayment thresholds for student loans take effect from 6 April 2026, with Plan 2 rising to £29,385 but then freezing until 2030—and new Plan 5 debuts at lower £25,000 threshold.
From 6 April 2026, all student loan repayment thresholds have risen by 3.2% following RPI indexation, but the changes carry mixed news. Plan 1 thresholds rise to £26,900, Plan 2 to £29,385, and Plan 4 to £33,795. Critically, the Plan 2 threshold will be frozen at this amount from April 2027 until April 2030—meaning borrowers on Plan 2 face fiscal drag as real wages rise but their repayment trigger stays flat.
New Plan 5 and threshold freeze impact
Plan 5 student loan repayment applies to students who started undergraduate or postgraduate courses in England on or after 1 August 2023, based on 9% of income over the £25,000 threshold (as of 2026/27). Plan 5 has a lower repayment threshold and a longer term to pay back, though the lower threshold means borrowers start repaying at lower real-terms income each year.
For Plan 1 borrowers, the rise to £26,900 brings modest relief—approximately £6 less per month for those earning £30,000. But all graduates are affected by the broader context: personal tax and National Insurance thresholds remain frozen until 2031, compounding the impact of freeze years on household budgets.
If you are a current or recent graduate living in the UK on a visa—or an expat who studied in the UK—check your loan plan (gov.uk/student-loans or via HMRC's SA302 records) to understand your new repayment threshold and calculate the impact on your take-home pay.
Sources
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