Repayment Threshold History
Complete timeline of UK student loan repayment thresholds from 1998–present (condensed pre‑2012), updated with confirmed 2025/26 figures and policy context.
Plan 1
£26,065
2025/26
Plan 2
£28,470
2025/26 (confirmed)
Plan 5
£25,000
2025/26 (set, repayments Apr 2026)
Annual Threshold History
| Year | Plan 1 | Plan 2 | Plan 4 | Plan 5 | Postgrad | Notes |
|---|---|---|---|---|---|---|
| 2025/26 | £26,065 | £28,470 | £32,745 | £25,000 | £21,000 | Plan 5 threshold set, repayments begin Apr 2026 |
| 2024/25 | £24,990 | £27,295 | £31,395 | — | £21,000 | |
| 2023/24 | £22,015 | £27,295 | £27,660 | — | £21,000 | Plan 5 legally introduced (threshold set), repayments start Apr 2026 |
| 2022/23 | £20,195 | £27,295 | £25,375 | — | £21,000 | Plan 2 threshold frozen |
| 2021/22 | £19,895 | £27,295 | £25,000 | — | £21,000 | |
| 2020/21 | £19,390 | £26,575 | — | — | £21,000 | Scottish loans used Plan 1 threshold in 2020/21, Plan 4 legal change Apr 6 2021 |
| 2019/20 | £18,935 | £25,725 | — | — | £21,000 | Scottish loans used Plan 1 threshold, Plan 4 established 06 Apr 2021 |
| 2018/19 | £18,330 | £25,000 | — | — | £21,000 | |
| 2017/18 | £17,775 | £21,000 | — | — | £21,000 | |
| 2016/17 | £17,495 | £21,000 | — | — | £21,000 | Postgrad loans introduced |
| 2015/16 | £17,335 | £21,000 | — | — | — | |
| 2014/15 | £16,910 | £21,000 | — | — | — | |
| 2013/14 | £16,365 | £21,000 | — | — | — | |
| 2012/13 | £15,795 | £21,000 | — | — | — | Plan 2 introduced |
| 1998–2011 | £10,000 | — | — | — | — | Plan 1 thresholds in this period were mainly £10,000 and later £15,000, kept for older borrowers |
Key Policy Changes
Plan 5 Introduced
New students in England from August 2023 are placed on Plan 5, with a lower threshold (£25,000) frozen until 2027, but lower interest rates (RPI only) and a longer 40-year write-off period.
Plan 2: freeze and thaw
The government froze the Plan 2 threshold at £27,295 from 2022. That freeze ended for the 2025/26 tax year when the threshold rose to £28,470. The government has signalled further uprating for 2026 followed by another potential freeze period.
Plan 4 reclassification (Apr 2021)
Scottish student loans were formally reclassified as Plan 4 on 6 April 2021 and gained their own threshold separate from Plan 1. Prior to that date Scottish loans used the Plan 1 thresholds.
Postgraduate Loans Introduced
New postgraduate loans for Master's and Doctoral study launched in England and Wales, with a separate £21,000 threshold and 6% repayment rate.
Plan 2 Introduced
Major reforms introduced Plan 2 for English and Welsh students, with higher fees (up to £9,000), a higher threshold (£21,000), and income-linked interest rates (RPI + 0-3%).
Why Thresholds Matter
Higher Threshold = Lower Repayments
When thresholds rise, you keep more of your salary. Plan 4's higher threshold (£32,745) means Scottish graduates pay less than English graduates on the same salary.
Frozen Threshold = Effective Pay Cut
When thresholds freeze while wages rise, graduates pay more each year in real terms. The Plan 2 freeze (2022–2024) increased repayments in real terms; the freeze ended for 2025/26 when the threshold rose to £28,470, although the earlier freeze caused substantial fiscal drag.
ℹ️Impact Example
If the Plan 2 threshold had been uprated with inflation from 2022, it would likely be around £31,000+ by 2025/26 instead of the current £28,470. That's roughly £2,500 more income before repayments start, worth about £230/year to graduates earning just above the threshold.
Postgraduate fiscal drag
The postgraduate threshold has been fixed at £21,000 since 2016, roughly worth £28,000 in today's money. Keeping this threshold frozen means many lower earning postgraduates are now inside the repayment net; this slow expansion of who pays is often called fiscal drag and is one of the most significant hidden impacts of postgraduate loan policy.
Plan 1: the low interest era
Between 2012 and 2021 Plan 1 thresholds rose substantially (from the low teens into the high teens), which made older Plan 1 borrowers relatively better off compared with later plans. That slow upward movement helped blunt the real cost of repayments for some cohorts.
What's Next?
💡Threshold Outlook (2025+)
Plan 1 (pre‑2012): Generally rises annually in April using RPI/earnings uprating, this keeps repayments more stable in real terms.
Plan 2 (2012–): The freeze at £27,295 ended for 2025/26, the threshold increased to £28,470 (Apr 2025) and is expected to rise again to around £29,385 in Apr 2026. After that, current policy indicates a re‑freeze period may follow (likely until 2029).
Plan 4 (Scotland): The Scottish government has increased Plan 4 thresholds independently, it now stands at £32,745 (2025/26) and remains higher than the English equivalent.
Plan 5: Set at £25,000 for 2025/26. The government has fixed this threshold at £25,000 for the first few years of the plan. It is not currently scheduled to rise with inflation.
Postgraduate: Frozen at £21,000 since 2016. Because it hasn’t kept pace with inflation, the postgraduate threshold now brings many lower paid graduates into repayments (fiscal drag).
ℹ️Did you know? Timing and the 'September spike'
Thresholds change in April for the tax year, but academic year rules and interest can be applied later in September. Payroll and admin delays mean changes may only be visible on payslips in April/May or in the following months, check both April and May payslips if you expect a change.
Thresholds are set by government policy and can change. Always check official government announcements for the latest figures.