1. What is the Student Loan Repayment Calculation?

The Martin Lewis Student Loan Calculator estimates annual student loan repayments in the UK as 9% of income above a plan-specific threshold. This calculation is based on the standard repayment terms for UK student loans.

2. How Does the Calculator Work?

The calculator uses the following equation:

Where:

• \( \text{Income} \) — Annual income in GBP
• \( \text{Threshold} \) — Plan-specific repayment threshold in GBP
• 0.09 — The 9% repayment rate above the threshold

Explanation: The calculation ensures you only repay when your income exceeds the threshold, and the repayment is 9% of the amount above that threshold.

3. Importance of Accurate Calculation

Details: Understanding your potential student loan repayments helps with financial planning and budgeting, especially when comparing job offers or considering career changes.

4. Using the Calculator

Tips: Enter your annual income in GBP and the relevant repayment threshold for your student loan plan. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the current thresholds for different plans?
A: Plan 1 threshold is £22,015, Plan 2 is £27,295, and Plan 4 is £27,660 (2023-24 figures). Postgraduate loans have different thresholds.

Q2: Is this calculation before or after tax?
A: The calculation is based on gross income (before tax) but repayments are taken through the payroll system after tax.

Q3: How often are repayments taken?
A: Repayments are typically deducted monthly from your salary if you're employed, or annually through self-assessment if self-employed.

Q4: What if my income varies?
A: If your income drops below the threshold, repayments stop until your income rises above it again.

Q5: Are there any other factors that affect repayments?
A: The calculation doesn't account for voluntary repayments, interest, or loan forgiveness after a certain period.