Repayment thresholds for student finance confirmed
Repaying student finance can seem complicated, with a number of different plan types each having different repayment thresholds. The thresholds for the forthcoming year have just been confirmed. What’s the full story?
If your employees have an outstanding student loan, HMRC will notify you via a start notice. You must then deduct repayments via the payroll. From your perspective as the employer, this is straightforward, as the payroll software should work out the correct amount in each pay period. You just need to ensure you set them up on the correct loan type. However, an awareness of the thresholds is still worth having, as it can help inform decisions about pay rises or bonuses. The thresholds for 2026/27 will be as follows (previous levels in brackets).
- Plan 1 — £26,900 (£26,065)
- Plan 2 — £29,385 (£28,470)
- Plan 4 — £33,795 (£32,745)
- Plan 5 — £25,000 (first year in operation)
- postgraduate loan — £21,000 (unchanged)
Above these thresholds, repayment is at 6% for postgraduate loans, and 9% for all other types.
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