Does a Pay Rise Affect My Student Loan Repayment?
Updated July 2026 · 4 min read · Free calculator inside
Yes — because UK student loan repayments are calculated as 9% of your income above your plan's threshold (6% for Postgraduate loans), any pay rise that keeps you above the threshold increases your monthly repayment. The increase is smaller than you might expect, since only the amount above the threshold is used in the calculation.
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A pay rise adds to your income, and if you are already above your plan's repayment threshold, 9% (or 6% for Postgraduate loans) of the full pay rise goes toward extra repayment. For example, on Plan 2 (threshold £29,385), a £2,000 pay rise for someone already earning £35,000 adds £180 a year (£15 a month) to their repayment — not 9% of your whole new salary.
Repayment thresholds by plan (2026)
| Plan | Threshold | Rate |
|---|---|---|
| Plan 1 | £24,990 | 9% |
| Plan 2 | £29,385 | 9% |
| Plan 4 (Scotland) | £32,745 | 9% |
| Plan 5 | £25,000 | 9% |
| Postgraduate | £21,000 | 6% |
What if the pay rise pushes me above the threshold for the first time?
- If you were earning below the threshold and a pay rise takes you above it, you only start repaying on the amount above the threshold — not the whole salary.
- If you have both a Plan and a Postgraduate loan simultaneously, both repayments (9% and 6%) apply on top of each other above their respective thresholds, which can add up to 15% combined.
- A bonus is treated the same way as a pay rise for that pay period — it can temporarily increase that month's repayment.
Frequently Asked Questions
Will my student loan repayment go up every time I get a raise?
Only if the raise keeps your income above your plan's threshold. If you are already above it, yes — 9% (or 6% for Postgraduate) of the extra income goes to repayment automatically through PAYE.
Can I choose to repay less after a pay rise?
No — the repayment percentage is fixed by law based on your plan and income; you cannot opt to repay less unless your income actually falls or you have finished repaying the loan.
Does overpaying my student loan voluntarily reduce future repayments?
Voluntary overpayments reduce your outstanding balance and can shorten how long you repay, but they do not change the 9%/6% rate applied to your income each month unless your balance is fully cleared.
See your new repayment after a pay rise
Skip the maths — get an instant, up-to-date figure with our free calculator.
Open the Student Loan Repayment Calculator →Related Guides
UK Student Loan Repayments Explained
How UK student loan repayments work in 2026: the repayment thresholds for Plan 1, 2, 4, 5 and Postgraduate loans, the 9% rate, and when loans are written off.
How to Calculate Your Take-Home Pay in the UK
Work out your UK take-home pay for 2026/27 — income tax bands, the £12,570 personal allowance, National Insurance, and what actually lands in your bank account.
⚠️ Disclaimer: This guide is for general information only and does not constitute financial, tax, or legal advice. Rates and thresholds can change — always check the latest figures on GOV.UK and consult a qualified professional before making decisions.