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If you have a student loan, the amount you need to earn before you start making repayments is changing for the 2026/27 tax year (which starts in April 2026).
These changes affect the annual earnings threshold—the salary you must exceed before your employer starts taking repayments from your wages. The exact figure depends on which Plan you are on.
Here is a simple breakdown of the new annual thresholds, based on the update in the Budget on 26 November 2025.
New Annual Repayment Thresholds for 2026/27
| Loan Plan Type | Who the loan is for (Broadly) | New Annual Threshold (from April 2026) |
| Plan 1 | English/Welsh students who started before Sept 2012, or Northern Irish students who started after Sept 1998. | £26,900 |
| Plan 2 | English/Welsh students who started between Sept 2012 and July 2023. | £29,385 |
| Plan 3 | Postgraduate Master’s and Doctoral Loans (for England/Wales). | £21,000 |
| Plan 4 | All Scottish students. | £33,795 |
| Plan 5 | English students who started on or after 1 August 2023. | £25,000 |
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What Does This Mean for You?
The key thing to remember is that you only start making repayments once your gross earnings (your pay before tax and National Insurance) go over the threshold for your specific Plan in a pay period (whether that’s weekly, monthly, or yearly).
- If you earn less than the threshold for your Plan, you will not make any student loan repayments.
- If you earn more than the threshold for your Plan, you will pay back a percentage of the amount you earn above that threshold.
For most Plan types (Plans 1, 2, 4, and 5), this repayment is 9% of the income above the threshold. For Plan 3 (Postgraduate Loans), the rate is 6% of the income above the threshold.
💡 The Introduction of Plan 5
The 2026/27 tax year is particularly important because it is when Plan 5 loans will start being repaid for the first time.
- This plan is for students in England who began their university course on or after 1 August 2023.
- The repayment threshold is set at £25,000.
- Repayments are at a rate of 9% of income above this figure.
- The loan is cancelled after 40 years.
🧐 Quick Check: Which Plan Are You On?
It’s vital to know your Plan type, as the thresholds are very different!
- Check your details: The best way to confirm your Plan is to check your Student Loans Company (SLC) online account.
- Tell your employer: Your employer is responsible for collecting the money automatically through the PAYE system (just like tax). When you start a new job, you must tell your employer which Plan you are on. If you are not sure, they must start deducting based on Plan 1 until HMRC tells them otherwise.
Seeking Professional Advice
For most employed individuals, student loan deductions are managed smoothly by your employer through the PAYE system. However, if you are self-employed, have variable earnings, are repaying multiple loans (a Student Loan and a Postgraduate Loan), or have other complex income sources (like property income or significant unearned income), you may find it helpful to consult with a qualified accountant or tax advisor. They can ensure your self-assessment tax returns accurately reflect your student loan liabilities and help you understand the full impact of these repayments on your overall financial position.
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