Aug 2020
21
Thresholds to rise for Student Loan repayment from 6th April 2021
The Department of Education have announced the new student loan thresholds that will apply from 6th April 2021.
The repayment threshold for Student Loan Plan 1 will increase by 3% and the repayment threshold for Student Loan Plan 2 will increase by 2.7%.
The repayment threshold for the Postgraduate loans will remain the same.
For any loans before 2012, Plan 1 Loans will apply and for loans after 2012 Plan 2 Loans will apply.
Earnings above the thresholds for both Plan 1 and Plan 2 for 2021/22 will be calculated as normal at 9%. The rate of the postgraduate loan type introduced in the 2019/20 tax year will continue to be calculated at 6%.
Summary of the Student Plan thresholds:
- Plan 1 loans will increase from the current threshold of £19,390 to £19,895 in 2021/22.
- Plan 2 loans will increase from the current threshold of £26,575 to £27,295 in 2021/22.
- Postgraduate loans will not change and remain at the current threshold of £21,000.
A Student Loan Type 4 will come into effect from 6th April 2021 for students who have taken a loan out in Scotland. The First Minister has committed to the student loan repayment threshold which will rise to £25,000 in Scotland from April 2021.
In BrightPay 2021/22, the new student loan repayment thresholds for both plans will automatically be calculated by the payroll software and the appropriate student loan deduction applied.
