MoneyPaths

Analysis

The Plan 2 threshold freeze: who pays more, and who pays less

MoneyPaths · Published 1 August 2026 · Last reviewed 1 August 2026. Next reviewed when the April 2027 thresholds and interest rates are confirmed.

Plan 2 repayments start once you earn over £29,385. That figure normally climbs with inflation every April. Not now: it's frozen until 2030, and so are the income levels that set your interest rate.

We ran 10,000 simulated futures twice - once with the freeze, once without - to see what it does to the total you repay. It doesn't land the same way on everyone.

Some borrowers repay thousands more because of it. Others repay slightly less. What follows is where the line between them falls, and what it does to the maths on paying extra.

What the freeze changes

Every figure below runs the same simulated futures under both threshold paths. A plus means more repaid because of the freeze. A minus means less.1

£25,000 earner, £45,000 balance
+£4,530
more repaid over the loan's life. This balance never clears, so the extra is simply extra.
£50,000 earner, same balance
-£1,022
less repaid. The money goes sooner, so less interest builds up before the loan clears.
Futures where a £50,000 earner clears £50,000
6 in 10
with the freeze, up from 4 in 10 without it

Extra repaid over the loan's life

Middle-of-the-road outcome across 10,000 paired simulated futures, at a £45,000 balance today. Each cell is the lifetime difference in today's money, with cash terms - the pounds of the years they're actually paid - in brackets.
Stage of the journey£25,000 salary£50,000 salary£75,000 salary
Early (repaying since 2025)+£5,895 (+£9,942 cash)-£1,322 (-£4,278 cash)-£363 (-£901 cash)
Mid (repaying since 2020)+£4,530 (+£7,095 cash)-£1,022 (-£3,057 cash)-£365 (-£896 cash)
Late (repaying since 2016)+£3,469 (+£5,136 cash)+£4,172 (+£5,679 cash)-£363 (-£894 cash)

Will the loan still be cleared before write-off?

After 30 years the law cancels whatever's left. That's write-off. Because the freeze pulls repayments forward, it makes clearing the balance more likely, not less - and the borrowers sitting on the edge feel it most.2

+22 points

More likely to clear: a £50,000 earner with a £50,000 balance61% of simulated futures clear the balance with the freeze, against 39% without it. It's the biggest single movement anywhere in this analysis, and it lands on borrowers whose loans could have gone either way.
Share of simulated futures where the loan is fully repaid before write-off, mid-journey (repaying since 2020), with no voluntary overpayments. The change column is in points of that share. Rows where the loan clears in every future under both paths are left out - at £100,000 and £125,000 nothing moves.
Salary and balanceCleared, with the freezeCleared, withoutChange
£50,000 salary, £50,000 balance61% of futures39%+21.76 points
£50,000 salary, £70,000 balance1% of futures0%+0.73 points
£75,000 salary, £70,000 balance100% of futures99%+0.45 points

The line between paying more and paying less

A frozen threshold means 9% is taken from a wider slice of your pay. The money leaves faster. If your loan was heading for write-off, that's the whole story - more collected, nothing saved, because the balance was going to be cancelled anyway.

Leaving faster works differently on a loan that clears. The balance shrinks sooner, so less interest piles up over the years that remain, and the loan can finish a year early. Earn enough against a small enough balance and that saving beats the extra collected.

Every borrower gets both effects. Which one wins depends on whether the loan finishes, and near the line the two almost cancel - which is why two borrowers who look alike can end up on opposite sides of it.

Nothing snaps, though. The difference doesn't jump from thousands more to hundreds less as you cross: it fades towards nothing, passes through zero, then grows again the other way. The big numbers sit at opposite corners of the map, far from the line. Within a couple of hundred pounds of it, a whole loan's difference is under £200 either way.

£25k salary, £10k balance: +£3,029£25k salary, £15k balance: +£4,247£25k salary, £20k balance: +£4,503£25k salary, £25k balance: +£4,528£25k salary, £30k balance: +£4,530£25k salary, £35k balance: +£4,530£25k salary, £40k balance: +£4,530£25k salary, £45k balance: +£4,530£25k salary, £50k balance: +£4,530£25k salary, £55k balance: +£4,530£25k salary, £60k balance: +£4,530£25k salary, £65k balance: +£4,530£25k salary, £70k balance: +£4,530£25k salary, £75k balance: +£4,530£25k salary, £80k balance: +£4,530£30k salary, £10k balance: too close to call£30k salary, £15k balance: +£428£30k salary, £20k balance: +£4,850£30k salary, £25k balance: +£5,793£30k salary, £30k balance: +£5,957£30k salary, £35k balance: +£5,969£30k salary, £40k balance: +£5,970£30k salary, £45k balance: +£5,970£30k salary, £50k balance: +£5,970£30k salary, £55k balance: +£5,970£30k salary, £60k balance: +£5,970£30k salary, £65k balance: +£5,970£30k salary, £70k balance: +£5,970£30k salary, £75k balance: +£5,970£30k salary, £80k balance: +£5,970£35k salary, £10k balance: too close to call£35k salary, £15k balance: +£254£35k salary, £20k balance: +£515£35k salary, £25k balance: +£1,827£35k salary, £30k balance: +£5,327£35k salary, £35k balance: +£5,882£35k salary, £40k balance: +£5,987£35k salary, £45k balance: +£5,997£35k salary, £50k balance: +£6,000£35k salary, £55k balance: +£6,000£35k salary, £60k balance: +£6,000£35k salary, £65k balance: +£6,000£35k salary, £70k balance: +£6,000£35k salary, £75k balance: +£6,000£35k salary, £80k balance: +£6,000£40k salary, £10k balance: too close to call£40k salary, £15k balance: +£213£40k salary, £20k balance: +£374£40k salary, £25k balance: +£558£40k salary, £30k balance: +£772£40k salary, £35k balance: +£4,209£40k salary, £40k balance: +£5,593£40k salary, £45k balance: +£5,921£40k salary, £50k balance: +£5,987£40k salary, £55k balance: +£5,997£40k salary, £60k balance: +£6,000£40k salary, £65k balance: +£6,000£40k salary, £70k balance: +£6,000£40k salary, £75k balance: +£6,000£40k salary, £80k balance: +£6,000£45k salary, £10k balance: too close to call£45k salary, £15k balance: too close to call£45k salary, £20k balance: too close to call£45k salary, £25k balance: too close to call£45k salary, £30k balance: too close to call£45k salary, £35k balance: too close to call£45k salary, £40k balance: +£505£45k salary, £45k balance: +£4,887£45k salary, £50k balance: +£5,696£45k salary, £55k balance: +£5,930£45k salary, £60k balance: +£5,987£45k salary, £65k balance: +£5,996£45k salary, £70k balance: +£5,999£45k salary, £75k balance: +£6,000£45k salary, £80k balance: +£6,000£50k salary, £10k balance: too close to call£50k salary, £15k balance: too close to call£50k salary, £20k balance: too close to call£50k salary, £25k balance: -£307£50k salary, £30k balance: -£493£50k salary, £35k balance: -£720£50k salary, £40k balance: -£960£50k salary, £45k balance: -£1,022£50k salary, £50k balance: +£2,111£50k salary, £55k balance: +£5,110£50k salary, £60k balance: +£5,725£50k salary, £65k balance: +£5,927£50k salary, £70k balance: +£5,984£50k salary, £75k balance: +£5,996£50k salary, £80k balance: +£5,998£55k salary, £10k balance: too close to call£55k salary, £15k balance: too close to call£55k salary, £20k balance: too close to call£55k salary, £25k balance: -£308£55k salary, £30k balance: -£477£55k salary, £35k balance: -£686£55k salary, £40k balance: -£934£55k salary, £45k balance: -£1,195£55k salary, £50k balance: -£1,371£55k salary, £55k balance: -£1,296£55k salary, £60k balance: +£3,189£55k salary, £65k balance: +£5,181£55k salary, £70k balance: +£5,723£55k salary, £75k balance: +£5,919£55k salary, £80k balance: +£5,978£60k salary, £10k balance: too close to call£60k salary, £15k balance: too close to call£60k salary, £20k balance: too close to call£60k salary, £25k balance: -£208£60k salary, £30k balance: -£329£60k salary, £35k balance: -£478£60k salary, £40k balance: -£658£60k salary, £45k balance: -£868£60k salary, £50k balance: -£1,105£60k salary, £55k balance: -£1,323£60k salary, £60k balance: -£1,424£60k salary, £65k balance: -£1,263£60k salary, £70k balance: +£3,745£60k salary, £75k balance: +£5,242£60k salary, £80k balance: +£5,723£65k salary, £10k balance: too close to call£65k salary, £15k balance: too close to call£65k salary, £20k balance: too close to call£65k salary, £25k balance: too close to call£65k salary, £30k balance: -£234£65k salary, £35k balance: -£343£65k salary, £40k balance: -£477£65k salary, £45k balance: -£634£65k salary, £50k balance: -£816£65k salary, £55k balance: -£1,021£65k salary, £60k balance: -£1,234£65k salary, £65k balance: -£1,405£65k salary, £70k balance: -£1,445£65k salary, £75k balance: -£1,170£65k salary, £80k balance: +£4,130£70k salary, £10k balance: too close to call£70k salary, £15k balance: too close to call£70k salary, £20k balance: too close to call£70k salary, £25k balance: too close to call£70k salary, £30k balance: too close to call£70k salary, £35k balance: -£254£70k salary, £40k balance: -£354£70k salary, £45k balance: -£475£70k salary, £50k balance: -£614£70k salary, £55k balance: -£775£70k salary, £60k balance: -£956£70k salary, £65k balance: -£1,150£70k salary, £70k balance: -£1,338£70k salary, £75k balance: -£1,459£70k salary, £80k balance: -£1,444£75k salary, £10k balance: too close to call£75k salary, £15k balance: too close to call£75k salary, £20k balance: too close to call£75k salary, £25k balance: too close to call£75k salary, £30k balance: too close to call£75k salary, £35k balance: too close to call£75k salary, £40k balance: -£270£75k salary, £45k balance: -£365£75k salary, £50k balance: -£474£75k salary, £55k balance: -£598£75k salary, £60k balance: -£741£75k salary, £65k balance: -£901£75k salary, £70k balance: -£1,075£75k salary, £75k balance: -£1,256£75k salary, £80k balance: -£1,411£80k salary, £10k balance: too close to call£80k salary, £15k balance: too close to call£80k salary, £20k balance: too close to call£80k salary, £25k balance: too close to call£80k salary, £30k balance: too close to call£80k salary, £35k balance: too close to call£80k salary, £40k balance: -£210£80k salary, £45k balance: -£285£80k salary, £50k balance: -£373£80k salary, £55k balance: -£473£80k salary, £60k balance: -£586£80k salary, £65k balance: -£713£80k salary, £70k balance: -£856£80k salary, £75k balance: -£1,013£80k salary, £80k balance: -£1,179£85k salary, £10k balance: too close to call£85k salary, £15k balance: too close to call£85k salary, £20k balance: too close to call£85k salary, £25k balance: too close to call£85k salary, £30k balance: too close to call£85k salary, £35k balance: too close to call£85k salary, £40k balance: too close to call£85k salary, £45k balance: -£228£85k salary, £50k balance: -£298£85k salary, £55k balance: -£379£85k salary, £60k balance: -£472£85k salary, £65k balance: -£577£85k salary, £70k balance: -£692£85k salary, £75k balance: -£820£85k salary, £80k balance: -£963£90k salary, £10k balance: too close to call£90k salary, £15k balance: too close to call£90k salary, £20k balance: too close to call£90k salary, £25k balance: too close to call£90k salary, £30k balance: too close to call£90k salary, £35k balance: too close to call£90k salary, £40k balance: too close to call£90k salary, £45k balance: too close to call£90k salary, £50k balance: -£242£90k salary, £55k balance: -£309£90k salary, £60k balance: -£386£90k salary, £65k balance: -£471£90k salary, £70k balance: -£568£90k salary, £75k balance: -£674£90k salary, £80k balance: -£792£95k salary, £10k balance: too close to call£95k salary, £15k balance: too close to call£95k salary, £20k balance: too close to call£95k salary, £25k balance: too close to call£95k salary, £30k balance: too close to call£95k salary, £35k balance: too close to call£95k salary, £40k balance: too close to call£95k salary, £45k balance: too close to call£95k salary, £50k balance: too close to call£95k salary, £55k balance: -£254£95k salary, £60k balance: -£319£95k salary, £65k balance: -£391£95k salary, £70k balance: -£471£95k salary, £75k balance: -£560£95k salary, £80k balance: -£658£100k salary, £10k balance: too close to call£100k salary, £15k balance: too close to call£100k salary, £20k balance: too close to call£100k salary, £25k balance: too close to call£100k salary, £30k balance: too close to call£100k salary, £35k balance: too close to call£100k salary, £40k balance: too close to call£100k salary, £45k balance: too close to call£100k salary, £50k balance: too close to call£100k salary, £55k balance: -£210£100k salary, £60k balance: -£265£100k salary, £65k balance: -£327£100k salary, £70k balance: -£395£100k salary, £75k balance: -£470£100k salary, £80k balance: -£553£105k salary, £10k balance: too close to call£105k salary, £15k balance: too close to call£105k salary, £20k balance: too close to call£105k salary, £25k balance: too close to call£105k salary, £30k balance: too close to call£105k salary, £35k balance: too close to call£105k salary, £40k balance: too close to call£105k salary, £45k balance: too close to call£105k salary, £50k balance: too close to call£105k salary, £55k balance: too close to call£105k salary, £60k balance: -£225£105k salary, £65k balance: -£275£105k salary, £70k balance: -£333£105k salary, £75k balance: -£399£105k salary, £80k balance: -£470£110k salary, £10k balance: too close to call£110k salary, £15k balance: too close to call£110k salary, £20k balance: too close to call£110k salary, £25k balance: too close to call£110k salary, £30k balance: too close to call£110k salary, £35k balance: too close to call£110k salary, £40k balance: too close to call£110k salary, £45k balance: too close to call£110k salary, £50k balance: too close to call£110k salary, £55k balance: too close to call£110k salary, £60k balance: too close to call£110k salary, £65k balance: -£237£110k salary, £70k balance: -£285£110k salary, £75k balance: -£340£110k salary, £80k balance: -£402£115k salary, £10k balance: too close to call£115k salary, £15k balance: too close to call£115k salary, £20k balance: too close to call£115k salary, £25k balance: too close to call£115k salary, £30k balance: too close to call£115k salary, £35k balance: too close to call£115k salary, £40k balance: too close to call£115k salary, £45k balance: too close to call£115k salary, £50k balance: too close to call£115k salary, £55k balance: too close to call£115k salary, £60k balance: too close to call£115k salary, £65k balance: too close to call£115k salary, £70k balance: -£246£115k salary, £75k balance: -£294£115k salary, £80k balance: -£346£120k salary, £10k balance: too close to call£120k salary, £15k balance: too close to call£120k salary, £20k balance: too close to call£120k salary, £25k balance: too close to call£120k salary, £30k balance: too close to call£120k salary, £35k balance: too close to call£120k salary, £40k balance: too close to call£120k salary, £45k balance: too close to call£120k salary, £50k balance: too close to call£120k salary, £55k balance: too close to call£120k salary, £60k balance: too close to call£120k salary, £65k balance: too close to call£120k salary, £70k balance: -£211£120k salary, £75k balance: -£254£120k salary, £80k balance: -£302£125k salary, £10k balance: too close to call£125k salary, £15k balance: too close to call£125k salary, £20k balance: too close to call£125k salary, £25k balance: too close to call£125k salary, £30k balance: too close to call£125k salary, £35k balance: too close to call£125k salary, £40k balance: too close to call£125k salary, £45k balance: too close to call£125k salary, £50k balance: too close to call£125k salary, £55k balance: too close to call£125k salary, £60k balance: too close to call£125k salary, £65k balance: too close to call£125k salary, £70k balance: too close to call£125k salary, £75k balance: -£223£125k salary, £80k balance: -£262More repaid with the freezeLess repaid with the freeze£25k£50k£75k£100k£125kSalary today£20k£40k£60k£80kLoan balance today

Lifetime difference (today's money)

  • Above +£4,000
  • +£1,000 to +£4,000
  • +£200 to +£1,000
  • Too close to call (under £200 either way)
  • -£200 to -£450
  • -£450 to -£900
  • Below -£900
Each cell is one borrower's lifetime difference in today's money, mid-journey: red means they repay more because of the freeze, green means less. Deeper shades mean bigger differences. The line runs through the crossing point; the table below gives its exact balances.The two sides deepen in opposite directions, and that isn't an accident. Red deepens as you move up and left, towards loans that never clear - then flattens near £6,000, because once write-off is certain the freeze collects the whole of the extra and nothing is left to vary. Green is deepest just past the line, where a loan only barely clears and finishing early avoids the most interest. Climb further and it fades: those loans clear easily whatever the threshold does.Most of the map is hatched grey. That's the finding, not a gap: those loans land the same way whichever threshold applies. They either clear comfortably under both, or run to write-off under both, so moving the threshold barely shifts the total.Grey means under £200 either way across the whole loan - under a pound a month, over the twenty to thirty years these loans still have to run. The simulation measures far finer than that; the band is a display choice, not a limit of the model.

The rule of thumb

Under about £45,000 of salary, the freeze means more repaid at every balance we tested - these loans rarely clear, so the extra collected is just extra. Over about £70,000, it means slightly less, or nothing different at all. In between, your balance decides. The line starts near a £35,000 balance at £45,000 of salary and climbs to roughly £76,000 by £65,000.

Important: Three things the line can't do

  • It doesn't hold still. The line is drawn for someone mid-journey on our default salary growth. Fewer years left pushes it towards paying more, which is why the £50,000 earner late in the journey sits on the other side of it in the table above.
  • It isn't sharp. Within a couple of hundred pounds of the line, a whole loan's difference is tens of pounds - too small to show up in a monthly payment, and too small to plan around.
  • Just below it, the saving is thinner than it looks. The frozen interest levels nudge a mid earner's rate up while they repay, which eats into the gain.
Interpolated flip points from the searched grid (salaries and balances in £5,000 steps).
SalaryBalance where the freeze flips to less repaid
£45,000about £35,144
£50,000about £46,631
£55,000about £56,445
£60,000about £66,261
£65,000about £76,104

What it does to the return on paying extra

Well clear of the line, the freeze barely touches what overpaying earns you. The loan cleared either way. Now it clears slightly sooner.

Near the line it changes the odds. Overpaying only pays off if the loan actually clears, and the freeze makes clearing more likely - so the same £100 a month works harder under the freeze than it would have without it.

+5.0%

What £100 a month earns at £50,000 against a £50,000 balanceThat's a year, with the freeze. Without it, +4.1%. Everywhere else on the grid the two paths sit within a tenth of a point of each other.
4.0%4.5%5.0%5.5%6.0%6.5%Middle-of-the-road outcome, like interest of X% a year on the money paid inWith the freezeWithout the freeze£30k balance£50k salary£50k salary, £30k balance, without the freeze: like interest of 5.6% a year£50k salary, £30k balance, with the freeze: like interest of 5.7% a year£75k salary£75k salary, £30k balance, without the freeze: like interest of 6.0% a year£75k salary, £30k balance, with the freeze: like interest of 6.0% a year£100k salary£100k salary, £30k balance, without the freeze: like interest of 6.3% a year£100k salary, £30k balance, with the freeze: like interest of 6.3% a year£125k salary£125k salary, £30k balance, without the freeze: like interest of 6.4% a year£125k salary, £30k balance, with the freeze: like interest of 6.4% a year£50k balance£50k salary£50k salary, £50k balance, without the freeze: like interest of 4.1% a year£50k salary, £50k balance, with the freeze: like interest of 5.0% a year£75k salary£75k salary, £50k balance, without the freeze: like interest of 5.7% a year£75k salary, £50k balance, with the freeze: like interest of 5.7% a year£100k salary£100k salary, £50k balance, without the freeze: like interest of 5.9% a year£100k salary, £50k balance, with the freeze: like interest of 5.9% a year£125k salary£125k salary, £50k balance, without the freeze: like interest of 6.1% a year£125k salary, £50k balance, with the freeze: like interest of 6.1% a year£70k balance£75k salary£75k salary, £70k balance, without the freeze: like interest of 5.6% a year£75k salary, £70k balance, with the freeze: like interest of 5.6% a year£100k salary£100k salary, £70k balance, without the freeze: like interest of 5.7% a year£100k salary, £70k balance, with the freeze: like interest of 5.8% a year£125k salary£125k salary, £70k balance, without the freeze: like interest of 5.9% a year£125k salary, £70k balance, with the freeze: like interest of 5.9% a year
Middle-of-the-road outcome across 10,000 futures, glossed as an interest-like rate on the money paid in, for a mid-journey borrower. Each row pairs the two threshold paths; the full figures, including how often the return was positive, are in the table below.

At £50,000 against a £70,000 balance the middle-of-the-road outcome is -100% under both paths: in most of those futures the loan is written off and every pound overpaid is lost. The freeze changes how often, not the middle outcome.

The same figures as the chart, plus the share of futures where the return was positive.
Salary and balanceWith the freezeWithoutPositive return, withPositive return, without
£50,000, £30,000+5.7%+5.6%100%100%
£50,000, £50,000+5.0%+4.1%91%77%
£50,000, £70,000-100.0%-100.0%7%3%
£75,000, £30,000+6.0%+6.0%100%100%
£75,000, £50,000+5.7%+5.7%100%100%
£75,000, £70,000+5.6%+5.6%100%100%
£100,000, £30,000+6.3%+6.3%100%100%
£100,000, £50,000+5.9%+5.9%100%100%
£100,000, £70,000+5.8%+5.7%100%100%
£125,000, £30,000+6.4%+6.4%100%100%
£125,000, £50,000+6.1%+6.1%100%100%
£125,000, £70,000+5.9%+5.9%100%100%

These are example borrowers. Yours will sit somewhere else on the grid.

Run the student loan overpayment calculator on your own numbers

It simulates the same 10,000 futures for the salary, balance and overpayment you enter, and shows how often paying extra saved money.

For scale

The Institute for Fiscal Studies puts the combined freezes at around £3,000 extra over a lifetime for the 2022 university entry cohort. That is measured on a different basis from our figures - across a whole cohort, counted from the start of their loans rather than from today - so it is context for the size of the thing, not a benchmark ours should match.3

What the simulations show

Loans that never clear repay more. At a £45,000 balance, a £25,000 earner repays £3,500 to £5,900 more in today's money, depending on how far through the term they already are. It comes out across the remaining years, and the loan still ends on the same date.

Loans that clear comfortably repay slightly less, or nothing different at all. Their money is collected earlier, the balance shrinks sooner, and the loan can finish up to a year early.

The line between the two runs, for someone mid-journey, from roughly a £35,000 balance at £45,000 of salary to roughly £76,000 at £65,000. Below about £45,000 of salary every balance we tested repays more; above about £70,000, less or the same. Which side any real loan falls depends on salary, balance, the years left to run, and futures nobody can know yet.

To see which side your own numbers fall on, run the free student loan overpayment calculator - its Plan 2 comparison card prices the freeze against your inputs.

Behind these figures

Every assumption, how we built the without-freeze comparison, what each scenario means and where the numbers come from: it's all on the workings page.

For the rules themselves: how Plan 2 interest actually works and when a student loan is written off.

Notes

  1. All figures are middle-of-the-road outcomes across 10,000 paired simulated futures, in today's money unless a cash-terms figure is given alongside, for a borrower mid-journey (repayments started 2020) unless the row says otherwise. ↩ back to the text
  2. These figures come from the same engine as our calculator. Its year-by-year core is reconciled against the Department for Education's published forecast method and agrees to the penny where the two share assumptions. The workings are set out in full here, and the underlying dataset and reconciliation are available on request - email [email protected]. ↩ back to the text
  3. Institute for Fiscal Studies, How do Plan 2 student loans work, and how have they changed over time?, published 27 May 2026. Figure checked against the source on 1 August 2026. ↩ back to the text