Plan 2 vs Plan 5: Which Is Better?
Plan 2 and Plan 5 are the two loan types most English university students will encounter. Plan 2 covers those who started between 2012 and 2023, while Plan 5 applies from 2023 onwards. They differ in repayment threshold, interest rate, and write-off period — and these differences can mean tens of thousands of pounds more or less repaid over your career.
Side-by-Side Comparison
The key terms of each plan at a glance. Plan 5 has a lower threshold and longer write-off, but simpler (and lower) interest.
| Feature | Plan 2 | Plan 5 |
|---|---|---|
| Eligibility | 2012-2023 | 2023+ |
| Repayment threshold | £28464/yr | £24996/yr |
| Repayment rate | 9% | 9% |
| Interest rate | RPI to RPI + 3% (sliding scale) | RPI only |
| Write-off period | 30 years | 40 years |
Total Repayment by Salary
How much you repay in total depends heavily on your salary. This chart shows the total amount repaid over the life of each loan for a range of starting salaries, assuming a balance of £45,000.
Balance Over Time
See how the outstanding balance changes month by month. Toggle between salary levels to see how income affects the repayment trajectory for each plan.
Key Takeaways
- Lower earners often pay more on Plan 5 because the 40-year term and lower threshold mean more months of repayments.
- Higher earners may pay more on Plan 2 because interest can reach RPI + 3%, growing the balance faster.
- Plan 5’s simpler interest (RPI only) makes the balance more predictable, but the longer write-off window is the real cost driver.