There are 5 Income Contingent Student Loans we are concerned about in payroll. The term income contingent means that the repayment amount deducted is contingent on the amount of income in the pay period.
On 13 August 2024, 7 months ahead of the start of tax year 2025/26, the Department for Education in England announced some annual thresholds that will apply. We must be careful of this announcement, not only because it comes so far ahead of the start of the new tax year:
- It is primarily concerned about the interest rates that will apply on Student Loan balances, and
- The Department for Education applies in England. Therefore, any threshold announced only applies to the Plans applying to English borrowers (plus the Northern Irish and Welsh borrowers that have been incorporated into Plans 1, 2 and 3).
ICB conveys the threshold information that we have been provided in the 13 August 2024 announcement:
|
Plan
|
Applicable to:
|
Threshold 2024/25
|
Threshold 2025/26
|
|
1
|
Borrowers UK-wide
|
£24,990
|
£26,065
|
|
2
|
English and Welsh borrowers
|
£27,295
|
£28,470
|
|
3
|
English and Welsh borrowers
|
£21,000
|
To be confirmed
|
|
4
|
Scottish borrowers
|
£31,395
|
To be confirmed
|
|
5
|
English borrowers (from April 2026)
|
£25,000
|
£25,000
|
They are all named Plans 1 – 5, with Plan 3 being the one that we used to refer to as Postgraduate.
