Plan 5 essentials
- Repayment threshold for 2026-27: £25,000 per year (frozen until at least April 2027)
- Repayment rate: 9% of income above the threshold
- Interest rate: RPI only (currently 3.2%) — much lower than Plan 2
- Loan written off 40 years after the April you became liable to repay
- Lower interest but longer write-off — more Plan 5 borrowers will repay in full than Plan 2 borrowers
Not sure? Check your account at gov.uk.
Frequently asked questions
When do Plan 5 repayments start?
From April 2026 at the earliest. If you started in September 2023, you become eligible to repay in the April after you finish your course. For most, that's April 2026 onward.
Is Plan 5 better or worse than Plan 2?
It depends on your income trajectory. Plan 5 has lower interest (RPI only vs RPI+3%) but a longer 40-year write-off. Lower earners may end up paying MORE total under Plan 5 because they're repaying for an extra decade. Higher earners benefit from the lower interest. The calculator above lets you model both scenarios.
Why is the Plan 5 threshold frozen at £25,000?
The legislation that created Plan 5 fixed the threshold at £25,000 with no automatic inflation link until at least April 2027. After 2027 it's intended to rise with RPI. The freeze means inflation gradually erodes the real-terms threshold, dragging more graduates into repayment over time.