Plan 5 Student Loan

Plan 5 is the most recent UK undergraduate student loan plan, introduced for English students starting university courses on or after 1 August 2023. It runs in parallel with Plans 1, 2 and 4 (each of which still applies to the cohort that originally borrowed under that plan).

Plan 5's repayment threshold is £25,000 per year (£2,083 per month or £481 per week), lower than Plan 2's £27,295. Repayment runs at the same 9% rate as Plans 1, 2 and 4. The most significant difference is the loan term: Plan 5 loans are written off 40 years after entering repayment, ten years longer than Plan 2's 30-year write-off — meaning a much higher proportion of borrowers are expected to repay in full.

Repayments begin in the April after course completion. The plan is identified to the employer through HMRC's coding notice or via the new starter's declaration on the Starter Checklist; from April 2026 the FPS schema includes a dedicated Plan 5 indicator alongside Plans 1, 2 and 4.

Worked example: Adaeze graduated in summer 2026 from a Plan 5 course and starts a £32,000 job in September 2026. Repayments begin in April 2027. Her monthly PAYE includes a Plan 5 deduction of 9% × (£32,000 − £25,000) / 12 = £52.50. If she receives a £4,000 bonus in March 2028 her Plan 5 deduction that month is 9% × ((£2,667 + £4,000) − £2,083) = £412 — the deduction temporarily spikes alongside the bonus, then returns to normal the following month. Plan 5 deductions appear on the payslip as 'Student Loan — Plan 5' and are remitted to HMRC monthly through the FPS, which forwards the data on to SLC.