Plan 4 mechanics (2026/27)
- Threshold: £32,745 per year
- Rate above threshold: 9%
- Calculation: per pay period through PAYE
Monthly threshold: £32,745 / 12 = £2,728.75 Weekly threshold: £32,745 / 52 = £629.71
Standard PAYE: 9% on earnings above the period threshold each pay period, rounded DOWN to the nearest pound.
Who has Plan 4
Plan 4 applies to:
- Scottish students who started university or further education from September 2017 onward through SAAS (Student Awards Agency Scotland)
Pre-2017 Scottish students are on Plan 1. Cross-border students (Scottish student studying in England) generally take their loan from their home nation, so a Scottish student at an English university typically has Plan 4.
Worked example — Plan 4 on £35,000
Annual: - Above £32,745 = £2,255 - 9% × £2,255 = £203/year
Monthly: £16. Very modest deduction reflecting the high threshold.
Worked example — Plan 4 on £50,000
Annual: - Above £32,745 = £17,255 - 9% × £17,255 = £1,553/year
Monthly: £129. Combined with Income Tax + NI on £50k, total deductions are roughly £960/month.
Plan 4 vs Plan 2 — same job, different plans
A £40,000 salary:
- Plan 2 (E&W cohort): above £28,470 = £11,530 × 9% = £1,038/year
- Plan 4 (Scotland cohort): above £32,745 = £7,255 × 9% = £653/year
Plan 4 borrowers pay £385/year less on the same salary at this income level — a direct result of the higher Scottish threshold.
This advantage narrows at higher incomes (both plans deduct 9% above their threshold, so the £385 gap stays constant).
Plan 4 interest
Plan 4 interest is set by the Scottish Government via SAAS:
- Base rate: Bank of England base rate + 1%
- Subject to caps in line with market conditions
- Generally lower than Plan 2 RPI-linked rates in low-RPI years, higher in high-RPI years
Interest is added daily to your balance but doesn't affect the monthly deduction (9% of income above threshold is fixed regardless of interest).
Plan 4 + PGL
If you did postgraduate study and took a Postgraduate Loan in addition to your Plan 4 undergrad:
| Salary | Plan 4 (9% above £32,745) | PGL (6% above £21,000) | Total |
|---|---|---|---|
| £35,000 | £203 | £840 | £1,043 |
| £45,000 | £1,103 | £1,440 | £2,543 |
| £55,000 | £2,003 | £2,040 | £4,043 |
The PGL rules apply identically regardless of which undergrad plan you have. Note: PGL is England-only via SLC; Scottish postgrads typically don't have it.
Salary sacrifice on Plan 4
Same optimisation as other plans — sacrifice into pension reduces threshold-relevant income.
For a Plan 4 borrower on £35,000:
Without sacrifice: - Above £32,745 = £2,255 × 9% = £203/year
With 7% sacrifice (£2,450): - Threshold-relevant income: £32,550 - Below £32,745 → £0 student loan
The £2,450 sacrifice eliminates student loan entirely while contributing to pension and saving Income Tax + NI.
When Plan 4 writes off
30 years from the April you first became repayable.
For someone who graduated in 2021 and started repayments in April 2022, write-off is April 2052.
In short
Plan 4 is the Scottish student loan plan for 2017+ SAAS borrowers. Threshold £32,745 (highest of any UK plan) with 9% rate above. 30-year write-off. Interest tracks Bank rate + 1%. Use the take-home calculator → to model. For the full reference, see the student loans hub →.