13 February 2026 · 6 min read ·Student Loans

Student Loan Repayment Explained

Plan 1, 2, 4, 5 and Postgraduate loan impact explained with practical salary planning context.

Summary

Student loan plan choice can materially change monthly net pay at the same salary. This guide explains thresholds and repayment behaviour in practical terms.

At-a-glance examples (2025/26)

Typical default outputs for quick context.

Gross salaryNet monthlyNet annualOpen
£30,000 £2,093.30 £25,119.60 View page
£50,000 £3,293.30 £39,519.60 View page
£100,000 £5,713.12 £68,557.40 View page

Loan plan selection changes the result materially

The most common source of underestimation in salary calculators is incorrect student loan plan selection. Different plans use different thresholds and rates, so monthly take-home can shift quickly.

When users leave this as 'none', they often overstate net pay by a noticeable amount. That can distort budgeting, mortgage planning and salary negotiation decisions.

A good workflow is to model three cases: no loan, your current plan, and a future case if your repayment status changes.

Salary progression and repayment acceleration

As salary rises, student loan deductions typically rise too. This reduces how much of each pay increase lands in your bank account. Understanding this effect prevents surprise after promotions.

From a planning perspective, net pay growth is still positive, but slower than gross growth. The right metric is net change per month after all deductions, not gross change alone.

If you are deciding between two roles, include loan repayment in both models. Otherwise, your comparison is incomplete.

Use the calculator for practical scenarios

Guide FAQ

Why does student loan repayment vary by plan?

Each plan has its own threshold and repayment rate. Repayments only apply to income above the threshold for your plan, so two people on the same salary can repay different amounts. Correct plan selection is one of the biggest drivers of estimate accuracy.

Are repayments based on gross salary?

Repayments are based on earnings above your plan threshold through payroll rules, not a simple flat percentage of total gross salary. That threshold effect means repayment rises progressively as income increases. Using the wrong plan in estimates can overstate or understate monthly net pay.

Should I overpay student loan from monthly budget?

That depends on interest rate, expected earnings path and other priorities such as emergency savings or pension matching. This site provides deduction estimates, not personal financial advice. Use the calculator for cashflow planning, then make repayment strategy decisions with full personal context.

Can I test this guide topic in the calculator?

Yes. Use the scenario links in this guide to open prefilled states, then adjust salary, region, loan and pension settings.

Are these guide pages server-rendered for indexing?

Yes. Core content is rendered in HTML and linked to salary/city/tool pages for crawlable internal navigation.

Which assumptions are most important for accuracy?

Tax region, tax code, student loan plan, pension contribution and salary sacrifice are the key assumptions to check first.

Related guides

Sources