Learning aim
Students can explain how Plan 5 student loans work, calculate annual repayment for a given salary, and articulate why most Plan 5 borrowers will not benefit from voluntary overpayment.
National Curriculum links
- PSHE Association KS5 H30: long-term financial planning, including knowing how to manage debt
- Citizenship KS5: the role of public-service borrowing and individual obligations
- Economics A-Level: government finance, the difference between graduate tax models and conventional debt
- Maths A-Level: percentage calculation in financial contexts; compound vs simple interest
What you'll need
- Plan 5 mechanics handout (threshold, rate, write-off horizon, interest formula)
- Calculator
- Three earnings scenarios: £28k starter, £45k mid-career, £70k high earner
- Mini-whiteboards
- UK Tax Drag's full student loans guide for teacher prep
Lesson structure (50 minutes)
HOOK
TEACH
GUIDED
CHALLENGE
PLENARY
Adapting for all learners
Support (working below ARE)
Pre-fill the calculation template — pupils only complete the final multiplication step. Allow calculator. Focus on understanding the threshold concept rather than fast arithmetic.
Stretch (working above ARE)
Pupils compute interest accrued vs repayments made over the first 5 years at £30k salary, demonstrating that the balance can GROW despite paying. Then discuss what this means for the "graduate tax" mental model.
SEND adaptations
For pupils with dyscalculia: provide a step-by-step decision flowchart — "Earnings < £25,000? → pay £0. Earnings ≥ £25,000? → repayment = (earnings − £25,000) × 9%." For pupils with autism: provide a visual timeline showing the 40-year horizon and key milestones.
EAL support
Vocabulary: "threshold", "marginal rate", "income-contingent", "write-off horizon", "graduate tax". Sentence frames: "If I earn £___, my annual loan repayment is £___." "Plan 5 writes off after ___ years."
Assessment criteria
Pupils can: (1) state the Plan 5 threshold and rate; (2) calculate Plan 5 repayment for any salary; (3) explain the 40-year write-off mechanism; (4) articulate why most Plan 5 borrowers should not voluntarily overpay.
Homework pack
Three activities consolidating Plan 5 mechanics. ~30 minutes.
Calculation set
What pupils do: Calculate Plan 5 annual repayment for these salaries: (a) £24,000, (b) £30,000, (c) £42,000, (d) £58,000.
Expected output: 4 calculations with working.
Marking guidance: 2 marks per accurate answer. 8 marks total.
Comparison essay
What pupils do: In 200 words, compare Plan 5 (40-year write-off) with Plan 2 (30-year write-off). Which is "better" for graduates? Justify with reference to typical career-earnings paths.
Expected output: 200-word structured response.
Marking guidance: 6 marks — 2 for accurate mechanics, 2 for analysis, 2 for justified conclusion.
Real-world decision
What pupils do: A 24-year-old graduate has a £45,000 Plan 5 balance. They've been left £30,000 in a will. Should they pay off the student loan, put it in a stocks-and-shares ISA, or save for a house deposit? Justify your recommendation.
Expected output: 300-word recommendation with reasoning.
Marking guidance: 8 marks — 3 for accurate Plan 5 understanding, 3 for considered analysis of alternatives, 2 for clear recommendation.
Homework pack
Four activities to consolidate UK income tax mechanics. ~30 minutes.
Band calculation
What pupils do: For each gross salary, calculate the UK income tax (England/Wales/NI 2026/27 rates): (a) £15,000, (b) £30,000, (c) £55,000, (d) £85,000. Show the band split for each.
Expected output: 4 calculations with band-by-band working.
Marking guidance: 2 marks per accurate total (8 marks). Bonus 4 marks for correct band splits.
Personal Allowance research
What pupils do: What is the Personal Allowance? Why does it exist? Who loses it (the taper rule)?
Expected output: A 3-question short-answer response.
Marking guidance: 2 marks per accurate answer. 6 marks total.
Public spending
What pupils do: Find 5 different things UK income tax pays for. Order them by approximate share of government spending (biggest first).
Expected output: A ranked list of 5 spending categories.
Marking guidance: 1 mark per category, 1 mark per correct relative ranking. 8 marks total (e.g. NHS, pensions, education, defence, welfare).
Extension (optional)
What pupils do: Compare England, Scotland, and Wales income tax for someone earning £50,000. Which nation pays the most? Why?
Expected output: A 3-nation comparison table plus 2-sentence explanation.
Marking guidance: Up to 6 marks for accurate research and conclusion (Scotland pays more above ~£28k).
Family discussion prompt (safeguarding-aware)
Ask a working adult: "Name three things you think our tax money pays for." Compare their answers to what you learned in class.
Classroom safeguarding
Related lesson plans
- Understanding your first payslip (KS3 · Year 7 / Year 8)
- National Insurance — what it is, who pays it (KS3 · Year 8)
- Tax codes and emergency tax — decoding the letters and numbers (KS3 · Year 8 / Year 9)
- All lesson plans (KS1 · KS2 · KS3 · KS4) →