Student Loan Plans (1, 2, 4, 5)
The repayment plans that decide how UK student loans are deducted from pay.
Which plan you sit on depends on when and where you started: Plan 1 (pre-2012 in England, plus Northern Ireland), Plan 2 (2012 to 2022 in England and Wales), Plan 4 (Scottish students), and Plan 5 (English students starting from 2023/24). Each has its own repayment threshold and write-off period: Plan 2 starts repayments at £27,295 and writes off after 30 years; Plan 5 starts at £25,000 and writes off after 40 years. Above the threshold you pay 9% of the excess via PAYE. Postgraduate loans run alongside at 6%. HMRC and the Student Loans Company collect and administer the loans. For many graduates, repaying is effectively a 9% graduate tax rather than a normal debt.
A 60-second lesson that puts this term in context, alongside the others, lives inside the Finlo app.