When do I start repaying a Plan 5 student loan?

Plan 5 applies to English undergraduates who started a course on or after 1 August 2023. Those who started between September 2012 and July 2023 stay on Plan 2, Scottish students are on Plan 4, Northern Irish students on Plan 1, and Welsh students starting from August 2023 remain on a Plan 2 variant. Your plan is fixed by your course start date and cannot be changed.

How much you actually pay

Repayment is 9% of income above £25,000 — about £2,083 a month. Below the threshold you pay nothing, whatever the balance. So a £30,000 salary produces roughly £37 a month, £40,000 about £112, and £60,000 about £262. Income counts employment earnings, self-employment profit and unearned income above £2,000 a year, but not maintenance loans or grants. Employed graduates cannot fall behind, because deductions track earnings through PAYE; self-employed borrowers pay through Self Assessment.

The write-off is 40 years from the April you first became eligible to repay, which for most people means around age 62 to 65. A Postgraduate Loan runs alongside on its own threshold of £21,000 and is deducted in parallel.

Interest, and whether to overpay

The most important Plan 5 change is that interest is capped at RPI, so the loan grows only with inflation and never in real terms. A £45,000 balance can look like £80,000 after twenty years while being worth the same in today's money. Under Plan 2, by contrast, the rate ran from RPI to RPI plus 3% depending on income.

That reshapes the overpayment question. Voluntary payments only make sense if you are confident of clearing the loan inside 40 years — otherwise you are paying money that would have been written off. As a rough test, compare your projected lifetime repayments at 9% above £25,000 against the balance grown at inflation. For most graduates earning between £25,000 and £45,000 the loan will never be repaid in full and overpaying is simply lost money; for sustained high earners it can save interest. Use the Student Loans Company estimator and free guidance from MoneyHelper before deciding.

Two practical points: tell the SLC if you go abroad for more than three months and file the overseas income assessment each year, or you face penalty charges and inflated assumed income. And student loan repayments never appear on your credit file, though lenders do see the deduction when assessing affordability.