Plan 2 vs Plan 5 student loans
Plan 2 and Plan 5 both deduct 9% above a threshold, but the 2026/27 thresholds are different. That can materially change the deduction shown on your payslip.
The key difference in 2026/27
| Plan 2 | Plan 5 | |
|---|---|---|
| Annual threshold | £29,385 | £25,000 |
| Monthly threshold | £2,448.75 | £2,083.33 |
| Repayment rate | 9% | 9% |
Because Plan 5 starts deducting at a lower earnings level, two employees on the same salary can see different student-loan deductions depending on their plan.
Which one applies?
For Student Finance England, most undergraduate borrowers who started a course from 1 August 2023 are on Plan 5. Those who started between 1 September 2012 and 31 July 2023 are generally on Plan 2. You cannot choose the plan yourself.
Do you repay 18% if you have both?
No. Where someone has more than one undergraduate plan type, the rules do not simply charge another 9% for each plan. Payroll uses the applicable plan information and the Student Loans Company allocates repayments under its rules.
Related NetSlip tools & guides
FAQs
Is Plan 5 a 9% repayment?
Yes. In 2026/27 Plan 5 repayments are 9% of earnings above the relevant £25,000 annual-equivalent threshold.
Is Plan 2 still used in 2026/27?
Yes. Existing Plan 2 borrowers continue on Plan 2; Plan 5 mainly applies to newer English undergraduate borrowers.
Can I choose Plan 2 instead of Plan 5?
No. Your repayment plan is determined by when and where you studied and the type of student finance you received.