Plan 5 student loans explained
See how Plan 5 differs from earlier plans and what that means for your repayments.
Who is on Plan 5?
You are on Plan 5 if you are from England and started an undergraduate course on or after 1 August 2023. That includes students who started in the 2023/24 academic year and everyone since. The first Plan 5 repayments started in April 2026.
If you started earlier, you are probably on Plan 2. See our Plan 2 guide for how that plan differs. If your funding came from SAAS in Scotland, see our Plan 4 guide instead.
Threshold and repayments
For the 2026/27 tax year the repayment threshold is £25,000 a year (£2,083.33 a month). You repay 9% of income above that figure, the same percentage as Plan 2 but from a lower starting point. Repayments are taken through PAYE like other student loan plans.
Worked example: on a salary of £30,000 you repay 9% of £5,000 (the amount above £25,000). That works out to about £37.50 a month.
The threshold is lower than Plan 2's £29,385, so Plan 5 borrowers start repaying earlier and pay more per month at the same salary. At £30,000 a Plan 5 borrower pays about £37.50 a month. A Plan 2 borrower at the same salary would pay much less, only 9% of the £615 above their higher threshold.
Interest is RPI only
Plan 5 charges interest at RPI only, with no income-based addition. From September 2026 that rate is 4.1% (based on March 2026 RPI).
This is the big advantage over Plan 2. Your balance grows more slowly, and in real terms it does not grow at all when RPI matches inflation. You are not fighting a balance that balloons when your salary rises. On Plan 2, higher earners can be charged RPI plus 3% (capped at 6% for 2026/27). Plan 5 keeps the same rate for everyone.
The 40-year write-off
Balances are cancelled 40 years after the April you were first due to repay. That is ten years longer than Plan 2. Most Plan 5 borrowers will repay for most of their working life unless they clear the balance early.
Plan 5 vs Plan 2 at a glance
Plan 5 and Plan 2 share the same 9% repayment rate above the threshold. The differences are in where that threshold sits, how interest is calculated, and when the balance is written off.
Plan 5
- Threshold: £25,000
- Interest: RPI only (4.1% from Sep 2026)
- Write-off: 40 years
- Repayment rate: 9% above threshold
Plan 2
- Threshold: £29,385
- Interest: RPI to RPI+3% (capped at 6% for 2026/27)
- Write-off: 30 years
- Repayment rate: 9% above threshold
Plan 5 trades a lower interest rate for a lower threshold and a longer repayment window. Whether that works out better for you depends on your salary path and how much you borrowed. Run your own numbers in our student loan calculator to see what that means for your salary and balance.
Related guides
This is general information, not financial advice. Check GOV.UK for official details that apply to your situation.