Plan 2 student loan repayment calculator (2026/27)

How Plan 2 actually works

What this calculator doesn't cover

• Interest accrualon your outstanding balance, that's a separate calculation that depends on your specific balance, RPI rate, and repayment history. The Student Loans Company's online account is the authoritative source for current balance.
• Time-to-write-offprojection. To estimate whether you'll fully repay before 30-year write-off, use the MoneySavingExpert student loan calculator (mse.me/student-finance) which models the full balance trajectory.
• Voluntary overpayments: strategy on whether to overpay depends on your specific income trajectory and balance. For most Plan 2 borrowers the answer is no; see the FAQ section.
• Mid-year income changes: if you switch from PAYE to Ltd contracting partway through a tax year, the calculator's annual figure will overstate the in-year deduction. Pro-rate to the months you were on each route.
• Overseas income: Plan 2 borrowers living abroad use a country-specific threshold and pay through HMRC's overseas process, not at-source PAYE. Outside this calculator's scope.

Frequently asked questions

Am I on Plan 2?

Plan 2 covers English and Welsh students who started undergraduate studies between September 2012 and July 2023. If you took a gap year or did a year-in-industry, the start date is when you first received a maintenance / tuition loan. If you studied in Scotland or Northern Ireland during this period you'd be on Plan 4 or Plan 1 respectively. Plan 2 is the most common plan for UK working-age graduates today, most contractors in their late 20s through early 40s are on Plan 2.

What's the Plan 2 threshold for 2026/27?

£29,385, uplifted from £28,470 in 2025/26 by RPI. The threshold is uplifted annually for Plans 1, 2, and 4 (Plans 5 and Postgrad are frozen). The 2026/27 figure was confirmed by gov.uk in early 2026 ahead of the new tax year.

How much do I actually pay?

9% of every pound of income above £29,385. At £40,000 income that's 9% × (£40,000 − £29,385) = £955/year, or about £80/month. At £50,000 it's 9% × £20,615 = £1,855/year. At £60,000 it's £2,755/year. The repayment grows linearly above the threshold, there's no progression to a higher band like in income tax, just a flat 9% above.

What income counts toward the threshold?

For PAYE employees (including umbrella contractors): gross taxable salary, i.e. the figure on your payslip BEFORE tax and NI but AFTER any salary-sacrifice pension contribution. For self-employed and Ltd directors: total income on self-assessment, which includes salary + dividends + any other taxable income (rental, interest, etc.). Personal pension contributions made out of net pay don't reduce the income SL is calculated on; salary sacrifice DOES reduce it.

What if I have Plan 2 + Plan 1 (e.g. did an integrated Master's)?

You hold both plans but pay only ONE 9% deduction at the LOWER threshold (Plan 1 at £26,900 in 2026/27). HMRC takes the single deduction; the Student Loans Company allocates the resulting payment between Plan 1 and Plan 2 internally. So at £40,000 income you'd pay 9% × (£40,000 − £26,900) = £1,179, NOT 9% twice. Add Plan 2 to the calculator above to see this surfaced, the breakdown explicitly shows the lowest threshold is used.

What about Plan 2 + Postgrad?

These ARE stacked separately. Plan 2 contributes 9% above £29,385; Postgrad contributes a separate 6% above £21,000. At £40,000: Plan 2 × £955 + Postgrad × (40,000 − 21,000) × 6% = £1,140 = £2,095 total. Maximum combined rate with both held is 15% (9% + 6%) on income above the higher threshold.

Is there interest on Plan 2?

Yes, Plan 2 carries interest from the day the loan is first issued. Rate is RPI for low earners (under £29,385), and rises on a sliding scale up to RPI + 3% for high earners (£52,884+ in 2026/27). The interest is added to the balance daily. Most Plan 2 borrowers see their balance grow rather than shrink in early years because the interest exceeds their 9%-of-above-threshold repayment. Write-off after 30 years from the April you first became eligible to repay.

When does Plan 2 get written off?

30 years after the April you first became eligible to repay (NOT from when you graduated or started repaying). For most Plan 2 borrowers that's 30 years after the April following graduation. The write-off is automatic and unconditional, no tax bill on the written-off amount. Many Plan 2 borrowers, particularly those with 4+ year courses or those who never reached high earnings, will never repay the principal in full plus accumulated interest before write-off.

Should I overpay my Plan 2 loan?

Almost always no. Plan 2's interest rate plus 30-year write-off means the standard advice from MoneySavingExpert and most personal-finance commentators is to make the minimum 9%-above-threshold repayment and put any spare cash into pension, ISA, or mortgage offset instead. Overpayment only makes sense if you're confident you'll repay the full balance plus accrued interest before the 30-year clock, which typically means consistently very high earners (£80k+) for the full repayment period. For most graduates, treat the 9% as a marginal-rate quasi-tax until write-off.

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