FIRE Finance

UK Student Loan Repayment Calculator

Calculate your student loan repayments and see whether your loan will be repaid or written off — and how it affects your FIRE plan.

Your Student Loan Details

Check your current balance at studentloans.co.uk (England/Wales) or SAAS (Scotland).

UK Student Loans Are Not Like Normal Debt

This is one of the most important financial concepts for UK graduates to understand. Your student loan is an income-contingent graduate contribution — not a mortgage, not a credit card, not a personal loan. The repayment mechanics are fundamentally different.

You repay 9% of your income above the threshold (not 9% of the balance). If your income falls below the threshold (due to taking time off, illness, or early retirement), repayments stop automatically. After 25–40 years, any remaining balance is written off — regardless of how much is left. Your credit rating is not affected by having a student loan balance.

The FIRE Approach to Student Loans

The UK FIRE community broadly agrees: for most people on Plan 2 or Plan 5, you should treat your student loan repayments as a graduate tax and focus your savings on ISA and SIPP contributions. Here is why:

  • If your loan will be written off: Every pound of overpayment is wasted. The loan disappears regardless — you are voluntarily giving money to the government that you could have invested for FIRE instead.
  • If your loan will be repaid anyway: Compare the loan interest rate to your expected ISA/SIPP returns. If expected investment returns (6–7%) exceed loan interest, investing wins. If they are close, the psychologically debt-free feeling may win.
  • Early retirement means fewer repayment years: Retiring at 50 on Plan 2 means fewer years of repayments before write-off, making overpayment even less likely to be rational.

UK Student Loan Plans Explained

PlanWho2025/26 ThresholdWrite-off
Plan 1Graduated before 2012£24,990Age 65
Plan 2England/Wales 2012–2023£27,29530 years
Plan 4Scotland (SAAS)£31,39530 years
Plan 5England from 2023£25,00040 years

Frequently Asked Questions

Should I overpay my UK student loan?

For most borrowers: no. If your loan will be written off (which is the case for the majority of Plan 2 and Plan 5 borrowers), overpayments are wasted. Invest in your ISA or SIPP instead for better long-term returns.

When is my student loan written off?

Plan 2: 30 years after April following first repayment. Plan 5: 40 years. Plan 1: Age 65. Plan 4: 30 years. The balance is automatically erased — you do not need to do anything.

How does student loan repayment affect my FIRE timeline?

Treat repayments as a graduate tax on income above the threshold. They reduce your take-home pay by 9% above the threshold, which reduces your investable surplus. However, they stop if income falls below the threshold, which is useful if you shift to part-time work on the path to FIRE.

Does early retirement affect my student loan?

Yes — if you retire early and live on ISA/SIPP withdrawals below the repayment threshold, your student loan repayments stop automatically. This is another reason the loan behaves more like a tax than a traditional debt.

This calculator uses simplified interest rate assumptions (approx 6.5% for Plan 2). Actual interest rates vary with RPI and income. Repayment thresholds are reviewed annually. For your official loan balance and repayment forecast, visit studentloans.co.uk (England/Wales) or saas.gov.uk (Scotland). This does not constitute financial advice.

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