Student loan Plan 5

Plan 5 is the student loan plan for students from England who started undergraduate courses after Plan 2 closed to new borrowers. In 2026/27 you repay 9% of earnings above £25,000 a year, which payroll applies as £2,083.33 a month or £480.76 a week. That is the lowest threshold of any UK undergraduate plan, so most graduates in full-time public sector jobs will repay something from their first payslip once repayments are due.

Who is on Plan 5

Plan 5 applies only to students from England. It replaced Plan 2 for new undergraduate borrowers, and the course start date that decides which plan you are on is given on gov.uk under “which repayment plan you are on”. Students from Wales stayed on Plan 2, students from Scotland are on Plan 4 and students from Northern Ireland are on Plan 1.

Repayments start from the April after you leave your course, as long as you are earning above the threshold. If you are still studying, or finished recently, check your Student Loans Company account for your repayment start date.

What it costs on public sector salaries

The low threshold means that even entry-level graduate posts produce a deduction. All examples are full-time 2026/27 rates in England, assuming Plan 5 only.

Salary	Example post	Over £25,000	Per year	About a month
£25,614	NJC pay point SCP 3	£614	£55.26	£5
£28,392	NHS band 4 entry	£3,392	£305.28	£25
£32,073	NHS band 5 entry	£7,073	£636.57	£53
£34,069	Teacher M1, outside London	£9,069	£816.21	£68

A newly qualified nurse on band 5 entry repays about £637 a year on Plan 5. A colleague on Plan 2 with the same salary repays about £242. A new teacher on M1 repays about £816 a year on Plan 5, compared with about £422 on Plan 2. See take-home pay for an NHS band 5 nurse and take-home pay for a newly qualified teacher for the full picture.

How each deduction is worked out

Payroll subtracts the Plan 5 threshold for the pay period from your gross pay and takes 9% of the rest. Each period is calculated on its own. On monthly pay of £2,672.75 (the band 5 entry salary), that is £2,672.75 minus £2,083.33 = £589.42, and 9% is £53.05.

Extra shifts, enhancements for unsocial hours and back pay all count as pay in the month they are paid. Workplace pension contributions under a net pay arrangement, which is how the NHS, teachers’ and local government schemes usually work, do not reduce the pay used for the calculation. Salary sacrifice does.

If your income for the whole tax year is below £25,000, for example because you started work part way through the year or work part-time, you can ask the Student Loans Company to refund repayments taken in high-earning months.

Part-time and term-time staff

Plan 5 borrowers working in schools as teaching assistants, cover supervisors or learning mentors are often paid less than the full-time salary because of part-time hours or term-time-only contracts. What counts is the pay you actually receive, not the advertised full-time equivalent. A post advertised at an NJC point worth £28,000 full-time could pay well under £25,000 in practice, in which case you repay little or nothing. Take-home pay for a teaching assistant shows how term-time pay is spread across the year.

The combined rate on extra earnings

For a basic-rate taxpayer in England, each extra pound above £25,000 loses 20p to income tax, 8p to National Insurance and 9p to Plan 5, leaving 63p before pension contributions. That is the same marginal rate as Plan 2 above its own threshold; the difference is that Plan 5 starts taking it much lower down the pay scale. With a Postgraduate Loan as well, a further 6p goes, leaving 57p.

Interest and write-off

Interest is added to the balance and does not affect your monthly deduction. The Plan 5 rate on gov.uk was 4.1% at the time of checking; it changes during the year.

Plan 5 loans are written off after a set number of years, and on death or permanent disability. The repayment period is longer than on Plan 2, so with a lower threshold as well, you are likely to repay for more of your working life. The current write-off rule and how the threshold changes in future years are in the Student Loans Company terms and conditions on gov.uk.

Getting the plan right on your payslip

Plan 5 is new to many payroll teams. Check that your payslip shows Plan 5, not Plan 2. If payroll is using Plan 2, you are repaying too little and the Student Loans Company will ask for the difference later, which can be an unwelcome bill. Tell payroll and the Student Loans Company as soon as you spot it. Student loan repayments from salary explains how deductions are started and stopped.