The Department for Education (DfE) has confirmed the annual updates to the Interest Rates and Thresholds of Income Contingent Student Loans.

 

The current threshold for 2019-20 for Plan 1 is £18,935 and the DfE have confirmed that from 6 April 2020 the threshold will rise to £19,390 for Plan 1.  Earnings above £19,390 will be calculated at the usual rate of 9%.

The current threshold for 2019-20 for Plan 2 is £25,725 and the DfE have confirmed that from 6 April 2020 the threshold for post 2012 loans will rise to £26,575 for Plan 2.  Earnings above £26,575 will be calculated at the usual rate of 9%.

The DfE introduced a new loan type from 6 April 2019, Postgraduate Loan (PGL).  The current threshold for PGL for 2019-20 is £21,000.  For 2020-21 the threshold will remain at £21,000 and earnings above this will continue to be calculated at 6%.

 

Full details of annual updates to the Interest Rates and Thresholds of Income Contingent Student Loans and Mortgage Style Student Loans can be found on GOV.UK.

Source: The Chartered Institute for Payroll Professionals (CIPP)

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