The Student Loan Company (SLC) has introduced a new payment plan structure.
Plan 5 will apply to students who started their undergraduate or advanced learner loan courses on or after 1 August 2023.
Any students who fall into the Plan 5 criteria will begin repaying their student loans from April 2026.
What is the Plan 5 criteria?
The Plan 5 criteria has three specific thresholds an employee’s income needs to meet. If this happens, they will need to start repaying their student loan, with deductions made automatically by the SLC.
The thresholds are:
· £25,000 per annum
· £2,083 per month
· £480 per week
However, automatic payments will stop if you drop below the thresholds in place. Only once your income returns to the threshold will the SLC start taking payments again.
The SLC will charge nine per cent on your income and that amount will be deducted to cover student loan payments. This will be collected either through payroll or via Self Assessment if you are self-employed.
If your salary increases at any stage, your student loan payment each month will also increase in line with the charge percentage in place.
To provide some context, if you are earning £28,000 per annum, you can expect around £22 of your monthly income to be taken by the SLC.
Should your salary then increase to £31,000 per annum, your monthly contribution would increase to around £45 per month, in line with the Plan 5 criteria and income increase.
Reach out for support if you have any concerns
With the new payment structure taking effect in April 2026, it’s important you understand how it works. For employers, you must clarify if Plan 5 applies to any of your employees, while for you as an employee, you need to know how the payment bracket works and plan accordingly.
If you are unsure about the newest payment structure, our team can advise and support you. We can help you clarify which bracket you fall into, explain how Plan 5 works and help you manage your finances.
Speak with our team for advice and support on the latest changes to student loan payment structures.
