Regional ComparisonUpdated 2025

Plan 4 vs Plan 5

Compare Scottish Plan 4 with England's Plan 5. Understand how regional differences in thresholds, interest, and write-off periods affect your repayments.

Plan 4 Threshold

£32,745

Scotland - Highest threshold

Plan 5 Threshold

£25,000

£7,745 lower

Write-off Difference

10 years

P4: 30y, P5: 40y

Interest Rates

Both ≈3.2%

Similar flat-rate structures

ℹ️Which plan do you have?

Plan 4: If you studied at a Scottish university (any start date post-1998). Applied to all Scottish students regardless of year.

Plan 5: If you started your undergraduate course in England from August 2023 onwards.

Note: Scottish students also typically receive SAAS-funded tuition, meaning most Plan 4 borrowers only have maintenance loans (much smaller balances).

Side-by-Side Comparison

Feature	Plan 4 (Scotland)	Plan 5 (England)
Annual Threshold	£32,745	£25,000
Monthly Threshold	£2,728	£2,083
Repayment Rate	9%	9%
Interest Rate	Lower of RPI or Base +1%	RPI only
Current Interest (approx)	≈3.2%	≈3.2%
Write-off Period	30 years	40 years
Applies To	All Scottish students	England 2023+ starters
Typical Tuition	SAAS-funded (£0)	£9,250/year

The Threshold Battle: Plan 4's Massive Advantage

Plan 4's threshold is £7,745 higher than Plan 5. This creates a dramatic difference in monthly take-home pay, especially at typical graduate salaries.

📝 Example: £30,000 Salary

Plan 4:

Below threshold - £0 repayment

Plan 5:

Above threshold by £5,000

Monthly: £38/month

Annual: £450/year

Advantage:

Plan 4 keeps £38/month more

📝 Example: £40,000 Salary

Plan 4:

Monthly: £54/month

Plan 5:

Monthly: £113/month

Difference:

Plan 5 pays £58/month more

That's £697/year extra

Interest Rates: Similar in Practice

Unlike Plan 1 vs Plan 2, both Plan 4 and Plan 5 have reasonable, flat-rate interest structures. Neither penalizes high earners with income-linked interest.

📊Plan 4 Interest: RPI or Base +1% (Lower)

Formula: Lower of RPI or Bank of England base rate + 1%

Current rate: ≈3.2%

Key protection: Capped during high inflation periods

The Benefit: If RPI spikes to 8%, Plan 4 interest won't exceed Bank Rate + 1%, protecting borrowers from runaway interest.

💰Plan 5 Interest: RPI Only

Formula: RPI only (no additional margin)

Current rate: ≈3.2%

Key benefit: Simple, predictable, no income penalties

The Advantage: Your interest rate never changes based on your income, unlike Plan 2's RPI + 3% for high earners.

Bottom line: In the current environment, both plans have similar interest rates (≈3.2%). The threshold and write-off differences matter more.

Write-off Period: 30 vs 40 Years

Plan 5's 40-year write-off is 10 years longer than Plan 4's 30 years. This is a significant policy difference that affects lifetime repayment.

Plan 4: 30 Years

Written off 30 years after graduation
Typical write-off in early-to-mid 50s
Shorter repayment window benefits borrowers
More likely to hit write-off with average earnings

Plan 5: 40 Years

Written off 40 years after graduation
Typical write-off in early-to-mid 60s
Extra decade of potential payments
Balances the lower interest rate for government

💡What the Extra 10 Years Means

For someone earning £35k throughout their career, that extra 10 years could mean an additional £5,000-£10,000 in total repayments. The extended write-off particularly targets mid-range earners who would have reached forgiveness under Plan 4's shorter period.

The Scottish Advantage: Free Tuition

A critical context: Scottish students receive SAAS-funded tuition, meaning Plan 4 borrowers typically only have maintenance loans.

Typical Plan 4 Borrower

Tuition: £0 (SAAS-funded)

Maintenance loan: ≈£7,000/year × 4 years = £28,000

Total debt at graduation: ≈£28,000-£35,000

Typical Plan 5 Borrower

Tuition: £9,250/year × 3 years = £27,750

Maintenance loan: ≈£9,000/year × 3 years = £27,000

Total debt at graduation: ≈£50,000-£60,000

Impact: Even with the lower threshold, Plan 5 borrowers often have double the debt of Plan 4 borrowers, making direct comparisons complex.

Real-World Scenarios: Which Plan Costs More?

💰Scenario 1: Average Earner (£28k → £42k career)

Plan 4 debt: £30,000 | Plan 5 debt: £55,000

Plan 4:

Many years with £0 payments (below £32,745 threshold)
Smaller balance due to maintenance-only loans
Likely hits 30-year write-off
Total paid: ≈£12,000-£18,000

Plan 5:

Payments from day one (£25k threshold)
Larger balance but similar interest rate
Likely hits 40-year write-off
Total paid: ≈£22,000-£30,000

Winner: Plan 4 (by ≈£10,000-£12,000)

📊Scenario 2: High Earner (£35k → £75k career)

Plan 4 debt: £32,000 | Plan 5 debt: £58,000

Plan 4:

Smaller initial balance (maintenance only)
Higher threshold provides protection early career
Pays off in 8-10 years
Total paid: ≈£35,000-£40,000

Plan 5:

Larger balance but manageable interest (RPI only)
Pays from early career
Pays off in 12-14 years
Total paid: ≈£60,000-£70,000

Winner: Plan 4 (by ≈£20,000-£30,000)

When Each Plan Works Best

Plan 4 Advantages:

Highest threshold (£32,745) protects low-to-mid earners
Shorter write-off (30 years) means less time paying
Typically smaller balances (maintenance-only loans)
Interest rate capped during inflation spikes
Free tuition reduces overall debt burden
Better for average and high earners alike

Plan 5 Characteristics:

Lower threshold (£25,000) means earlier repayments
Longer write-off (40 years) extends payment period
Typically larger balances (tuition + maintenance)
Simple RPI-only interest (no income penalty)
More predictable than Plan 2, but less generous than Plan 4
You can't choose - determined by study location

Key Takeaways

✓ Plan 4 is significantly more generous: The combination of highest threshold, shorter write-off, and free tuition makes Plan 4 the most favorable modern student loan plan.

💡 Threshold matters most: The £7,745 threshold difference means Plan 4 borrowers keep significantly more take-home pay at typical graduate salaries.

⚠️ Context is key: Direct comparison is tricky because Scottish students typically have much smaller loan balances due to free tuition.

📊 You can't choose: Your plan is determined by where you studied, not personal preference. Focus on optimizing for your specific plan.