WiseGrad gives UK graduates the financial knowledge their university never taught them — legally reduce your loan repayments, find great jobs, and take real control of your money.
BA Economics · Grad 2024
Lloyds Banking · London · £32k
ONS · Newport · £29k
Below £27,295 threshold → £0/mo repayment · Pension tip active ✓
UK student loans are not like normal debt. Most graduates will never fully repay. Learn how to keep more of your money — completely legally.
| Plan | Who? | Threshold | Rate | Writeoff |
|---|---|---|---|---|
| Plan 2 | England/Wales uni 2012–2023 | £27,295 | 9% | 30 yrs |
| Plan 5 | England from Aug 2023 | £25,000 | 9% | 40 yrs |
| Plan 4 | Scotland | £27,660 | 9% | 30 yrs |
| Postgrad | Masters / PhD | £21,000 | 6% | 30 yrs |
Under UK law, student loan repayments are calculated on your gross salary minus pension contributions. If you earn £35,000 and pay £4,000/year into your pension, your assessable income becomes £31,000. On Plan 2 that's £342 less in loan repayments per year — plus you save income tax and National Insurance on the pension contribution too. This is one of the most powerful legal strategies available.
💡 Smart Strategy✅ UK Law CompliantBonuses count as income. A £5,000 bonus on a £27,000 salary means that month you're assessed on £32,000 annualised — triggering a one-off deduction. You cannot opt out via payroll. However: if you negotiate for your bonus to be paid as pension contribution instead of cash (some employers allow this), it reduces the amount assessed for loan repayment AND is tax-free. Ask your HR or payroll team about this option specifically.
💡 Bonus Planning✅ UK Law CompliantIf you have a second PAYE job, each employer deducts independently based on that job's earnings alone — potentially neither crossing the threshold. However at year end, HMRC totals all your income via Self Assessment. If your combined income exceeds the threshold, any underpaid loan repayment is collected. If you're self-employed for side income, you report this via Self Assessment and repayments are collected then. Set aside 9% of any side income above the threshold throughout the year to avoid a surprise tax bill in January.
⚠️ Plan Ahead✅ UK Law CompliantCycle-to-work, electric car leasing, childcare vouchers and extra pension contributions paid via salary sacrifice all reduce your gross pay figure — the number student loan repayments are based on. These schemes are actively encouraged by employers and HMRC. Unlike a pay cut, you receive equivalent value in benefits, and you reduce your student loan repayment, income tax and National Insurance simultaneously.
💡 Smart Strategy✅ UK Law CompliantMoving abroad does not cancel your student loan. You must notify the Student Loans Company and self-report your overseas earnings annually. Country-specific repayment thresholds apply (often lower than the UK threshold). If you fail to report, the SLC sets a fixed repayment that may be higher than if you'd declared income honestly. Check gov.uk/repaying-your-student-loan for the overseas income form.
✅ Know Your ObligationsHMRC sends employers your plan type, but errors do happen. If your payslip shows the wrong plan deduction — for example Plan 1 instead of Plan 2 — you may be overpaying (Plan 1 threshold is only £22,015). Contact the Student Loans Company to request a refund of any overpayment. Keep 3 months of payslips to make any claim easier.
✅ Important CheckIf you earn £60,000+ and expect strong salary growth, you may well repay your loan in full before writeoff. In that scenario, the interest rate (RPI + up to 3%) matters and earlier repayment could save you money. Use our calculator with projected salary growth to see your personal forecast. For the majority earning £25,000–£45,000, the writeoff route wins financially.
📊 For High EarnersThis is the most dangerous myth. UK student loans are unlike any other debt. You only repay when you earn above the threshold, repayments stop if your income drops, and anything unpaid is written off completely after 30–40 years. Treating it like a credit card or mortgage and rushing to clear it is almost always a financial mistake for average earners.
✅ Reality: It's more like a graduate tax than a debtCompletely false. UK student loans do not appear on your credit file at all. Lenders like mortgage companies, credit card providers and banks cannot see your student loan balance. It has zero impact on your credit score. Many graduates turn down jobs or live frugally believing this — don't be one of them.
✅ Reality: No effect on credit score whatsoeverFalse. Mortgage lenders assess your affordability based on your take-home pay after all deductions — including student loan repayments. Your loan repayment reduces your assessed affordability slightly (because it reduces your net income), but the loan itself is not a barrier. Millions of UK graduates get mortgages every year while carrying student loan balances.
✅ Reality: Won't block a mortgage applicationThe interest rate feels scary but is largely irrelevant for most graduates. Here's why: if you're not going to repay the full balance before writeoff (which is most people), the interest just makes the number bigger — but that bigger number still gets written off. You never pay the interest that accrued on the portion you won't repay anyway. Only high earners who will clear the full balance need to worry about interest.
💡 Reality: Irrelevant if you won't clear it in fullFor most graduates, this is one of the worst financial moves you can make. If you're unlikely to repay in full (use our calculator), every pound you voluntarily overpay is a pound you'll never see again — even if your circumstances change. That same money in a Stocks & Shares ISA earning 7% annually or a pension with tax relief almost always beats early student loan repayment mathematically.
💰 Reality: Invest or save before voluntarily overpayingNever true. You only ever pay 9% of income ABOVE the threshold. A £5,000 pay rise always leaves you better off — you'd only pay 9% of that rise in extra repayments (£450), keeping £4,550. There is no "trap" where earning more hurts you financially. Always chase the pay rise.
✅ Reality: More earnings always means more money in your pocketIf your income drops during maternity, paternity or shared parental leave — including if you receive Statutory Maternity Pay (currently £184.03/week) — your student loan repayments automatically drop too. If your income falls below the threshold during leave, repayments stop completely. There is nothing you need to do; your employer handles this automatically through payroll. When you return to work and your income rises again, repayments resume at the normal rate.
✅ UK Law: Automatic — no action neededYour student loan does not appear on mortgage applications as a liability — lenders look at your monthly repayment amount as an outgoing, not the total balance. To maximise your mortgage borrowing: increase your pension contributions before applying (this reduces your student loan deduction AND your assessed income tax, improving your net income figure). Also consider whether you can demonstrate a pattern of saving — this reassures lenders more than clearing your student loan would.
💡 Tip: Pension contributions help more than loan overpaymentIf you become seriously ill or disabled and are unlikely to work again, you may be eligible for a Disability and Long-Term Illness (DLTI) writeoff. Your loan can be cancelled entirely if a doctor confirms a permanent condition means you're unable to work. Contact the Student Loans Company directly. Additionally, if your income drops below the threshold due to illness, repayments stop automatically — there's no penalty for non-payment during low-income periods.
✅ SLC DLTI Writeoff availableSelf-employed income is reported through Self Assessment. Your student loan repayment for self-employment income is calculated by HMRC at the end of each tax year and collected via Self Assessment — not through payroll. Crucially: legitimate business expenses reduce your taxable profit, which in turn reduces your student loan assessment. Keeping clean records of expenses (equipment, travel, software, workspace) has a double benefit — less income tax AND less student loan repayment.
💡 Business expenses reduce your loan repayment tooYou must notify the Student Loans Company within 3 months of leaving the UK. You'll be asked to submit annual overseas income assessments. Each country has its own repayment threshold (often lower than the UK). Failing to report means the SLC estimates a fixed repayment — usually higher than your actual earnings would trigger. If you later return to the UK, repayments switch back to PAYE automatically. Never ignore this — non-payment accrues interest and can lead to legal action.
⚠️ Must notify SLC within 3 months of leaving UKRepayments stop the moment your income drops below the threshold. If you're made redundant and claim Universal Credit or Jobseeker's Allowance, you will not make student loan repayments. If you take a deliberate career break — to travel, care for a relative, or retrain — repayments pause for that period. The loan balance continues to accrue interest, but remember: for most graduates that balance will be written off anyway. A career break will not ruin your financial life.
✅ Repayments pause automatically below thresholdReturning to full-time study doesn't cancel your existing loan, but repayments pause if your income drops below the threshold during study. If you take out a Postgraduate Loan (up to £12,167), this is a separate loan with its own threshold (£21,000) and rate (6%). Both loans are repaid simultaneously if your income exceeds both thresholds — but each plan only charges 9% or 6% above its own threshold. They don't stack multiplicatively.
💡 Undergrad and postgrad loans are separateStop applying randomly. These are the best UK sites specifically for graduates — so you're competing against people at your level, not 10-year veterans.
STEM & business graduate schemes
Focused exclusively on graduate schemes and internships from top UK employers in engineering, tech, finance and business. Employers post here specifically because they want new graduates — not experienced hires.
UK's largest graduate job board
One of the most established UK graduate job sites. Thousands of schemes, internships and entry-level roles. Filter by degree subject, location and salary. Set up alerts so new matching jobs arrive in your inbox daily.
Career advice + graduate listings
Beyond listings, TargetJobs gives career guidance for graduates unsure what to do with their degree. Trusted by Deloitte, NHS, GCHQ and hundreds of UK employers. Great "what job suits my degree?" tools.
Internships with honest reviews
Unique because students rate their placement experiences. Find genuine entry-level roles AND read honest reviews from people who've done them. Reduces the risk of joining a company that's bad for early career growth.
Official UK graduate careers service
The UK's official graduate careers resource. Covers jobs, graduate schemes, postgrad study and salary data. Especially useful if you're not sure what roles your degree qualifies you for — has degree-by-degree career guides.
Entry-level first job listings
Exclusively entry-level positions for people who recently graduated. Less competition than general boards because employers specifically want new graduates — helping you avoid the frustrating "need 1 year experience" barrier.
Professional network + job board
Essential for every graduate. Build your profile, connect with recruiters and apply directly. Use the "Entry Level" filter and turn on job alerts. A strong profile means recruiters will contact you — not just the other way around.
Largest general UK job board
Aggregates jobs from company websites and other boards. Search "graduate [your field]" for entry-level results. Upload your CV to be searchable. Set daily email alerts — new graduate roles get hundreds of applicants within 24 hours so speed matters.
UK recruiter since 1960
Strong for finance, healthcare, education and public sector entry roles. Also offers hundreds of free online courses to improve your employability while you search — a great way to fill CV gaps and show initiative to employers.
Great for regional UK roles
One of the UK's biggest boards with excellent coverage outside London. If you're open to roles in Northern England, Scotland, Wales or the Midlands, competition is significantly lower and salaries often stretch further. Don't overlook regional opportunities.
Most companies use Applicant Tracking Systems (ATS) that automatically filter out CVs that don't include the right keywords. Copy the exact phrases from the job posting into your CV where relevant. If they write "stakeholder management", don't write "working with people". Mirror their exact language — it takes 10 minutes and dramatically improves your chances of being seen by a human.
70% of jobs are filled through networks, not job boards. Add your degree, any work experience or projects, and a professional photo. Connect with lecturers, classmates and alumni now. Join 3–5 industry groups relevant to your target career. Recruiters actively search LinkedIn for graduates daily — your profile is a passive job application running 24/7.
Top graduate schemes at PwC, Deloitte, HSBC, the Civil Service Fast Stream and others open in September/October and frequently close by December — for roles starting the following September. Most graduates don't realise this and miss the window. Set calendar reminders for October and apply within the first 2 weeks of a scheme opening. Early applicants are reviewed before later applicants.
Research consistently shows graduates — especially women — don't apply if they don't meet every listed requirement. If you meet 60–70% of the criteria, apply. The "1 year experience required" on entry-level roles is often aspirational or copied from a template, not a firm gate. Apply and let the employer decide — the worst they can say is no.
The Civil Service Fast Stream, NHS Graduate Management Scheme, local government and teaching (with Teach First) all offer strong graduate starting salaries, exceptional pension schemes (often 20–26% employer contributions — which also reduces your student loan assessment), genuine job security and structured career development. These roles are highly competitive but significantly less so than private sector equivalents, and the total compensation package often beats private sector at graduate level.
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BSc Computer Science · University of Manchester · Plan 2 Loan · Graduated 2024
Amazon · London / Remote
HSBC · London
Sage · Newcastle
Civil Service · Multiple UK