UK welfare · student loans FY 2026/27 · 5 PLANS
Five active UK plans, two simultaneous deduction channels, three write-off horizons (25 / 30 / 40 years). This calculator surfaces your monthly PAYE deduction, the effective marginal rate modifier your career-progression decisions are being throttled by, and whether your outstanding balance is mathematically clearing or sitting on the statutory write-off pathway.
Engine note · Concurrent multi-plan deduction in integer pence — undergraduate + PGL stacking month-by-month against the 25 / 30 / 40- year statutory write-off horizon.
Multi-plan deduction engine + lifetime balance projection. Pick your undergraduate plan, tick the Postgrad checkbox if it runs concurrently, optionally drop in an outstanding balance, and watch the engine surface your monthly deduction stack, combined marginal rate modifier, and whether your balance clears before the statutory write-off horizon.
Pulls the statutory threshold table for the chosen year.
Student loan structures in the United Kingdom are frequently misunderstood by borrowers, often discussed as standard commercial bank debt. In reality, a student loan behaves identically to an independent, lifetime marginal income tax. Repayments are not determined by your outstanding balance or the interest-rate environment — they are calculated as a fixed percentage levied on your gross earnings the exact moment your income moves past statutory threshold lines.
Because these deductions are processed directly by your company's payroll department via the PAYE pipeline, mapping how your specific plan configuration interacts with your tax code is vital for understanding your true take-home pay.
A critical aspect of the Student Loans Company (SLC) repayment engine is that it operates on a strictly non-cumulative, pay-period basis. Exactly like National Insurance, your student loan deductions are calculated within isolated weekly or monthly blocks, with zero memory of what you earned in prior periods.
If you receive a one-off performance bonus, a commission spike, or back-pay during a specific month, the payroll software evaluates that total monthly gross in isolation. If the combined sum jumps past 1/12th of your plan's annual threshold, the 9% deduction is automatically pulled from your check. Crucially, because the system is non-cumulative, you cannot claim a refund from HMRC at the end of the year if your total annual earnings ultimately fall below the annual threshold line, unless your global annualised income sits below the absolute statutory minimum.
The most intense financial pressure occurs for professionals who hold multiple active qualifications. If you completed an undergraduate degree and subsequently secured a master's or specialised doctoral qualification using a Postgraduate Loan (PGL), your deductions run concurrently.
The system does not pause your undergraduate repayments while clearing your postgraduate balance. Instead, the payroll engine layers them on top of each other. If you are on an undergraduate Plan 2 contract earning above £29,385, you pay a flat 9% on that surplus. If you also cross the Postgraduate threshold of £21,000, you pay an additional 6% on the surplus past that line. When you combine this 15% student loan drag with 40% higher-rate income tax and 2% National Insurance, your true effective marginal tax rate scales to an intense 57% — making it critical to model your deductions accurately.
Unlike standard debt, all UK student loans feature a built-in expiration date known as the statutory write-off horizon. Depending on your specific graduation year and home nation, any remaining loan balance is completely wiped out by the state after 25, 30, or 40 years — regardless of how much debt is left on the books.
Because of this write-off safety net, making voluntary overpayments into your student loan can often be a major financial mistake. Unless your earning trajectory is high enough to completely clear the entire compounding balance before hitting the write-off window, any extra manual payments you make represent lost cash that would have otherwise been wiped out by the state. The right-hand summary card's projection block colour-codes the outcome so you can see whether your current parameters land you in the “paid-off-early” camp or the “sitting on the write-off pathway” camp before allocating personal capital.
The statutory annual thresholds the deduction engine reads from. Cross the line by £1 → the % multiplier engages.
HMRC erases the residual balance at the horizon — regardless of how much debt remains.
How payroll software runs Plan 2 + PGL deductions in parallel rather than sequentially: 9% on the undergraduate surplus AND 6% on every PGL pound past £21,000. The 15% combined drag that lifts higher-rate earners to a 57% marginal stack.
The two paths most UK borrowers fall into: Path A (write-off majority, where overpayments flush real cash into an inevitable balance erasure) vs. Path B (high-earning clean-off where overpayments shorten the timeline). Plan 5's 40-year horizon makes the modelling more important than ever.
Non-cumulative NI caps, non-cumulative student-loan deductions, and the higher-rate PAYE band stack on top of each other to strip 51% off every commission pound that crosses the monthly UEL. The exact math, line by line.
Every £1 between £100k and £125,140 costs 62p in tax + NI because Personal Allowance tapers away. The escape is salary sacrifice — and the math is generous.