How much will UK university cost a family in 2026/27?

A 3-year UK degree typically costs £60,000-£77,000 including tuition (£9,250/year in England), accommodation (£7,000-£10,500/year) and living costs (£3,500-£5,500/year). The student loan covers most of this, but maintenance loans are tapered by household income. Middle-income families typically face a £2,000-£6,000/year parental contribution gap that the loan doesn't cover.

Should I save into a Junior ISA for my child's university?

Yes for most middle-income families - a Stocks & Shares JISA at £100-£200/month from age 10 compounds to £15,000-£28,000 by age 18 (assuming UK historical real returns of 4-5%). This typically covers the parental contribution gap. Note: at age 18 the JISA becomes the child's adult ISA and they can withdraw - so consider a parental ISA if you want continued control over disposition.

Should we pay off the Plan 5 student loan to avoid debt?

For most Plan 5 graduates, no - the 40-year write-off, RPI-only interest, and £25,000 threshold mean roughly 50% of graduates never fully repay regardless of how much they overpay. Treating it as a "graduate tax" rather than a debt is closer to the correct mathematical framing. Exceptions: very high earners (£75k+ early career), graduates planning to emigrate, or those who prefer debt-free as a psychological matter rather than maths.

University funding - the UK parents’ guide 2026/27

Last reviewed by the UK Tax Drag editorial team · 12 May 2026 · How we review · Next review due 12 November 2026 · See what changed · Report an error

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For UK university 2026/27: tuition fees £9,250/year (England; lower in Scotland, Wales, NI). Plan 5 maintenance loan up to £13,762/year (London, away from home) but tapered by parental income above £25,000. Most middle-income families face a "parental contribution gap" of £2,000-£6,000/year per child as the maintenance loan doesn’t fully cover living costs. Most graduates should NOT overpay Plan 5 - 40-year write-off and RPI-only interest mean most never repay in full. ISA savings starting at age 10 are typically the most efficient way to build a university fund for parents.

The 2026/27 UK university cost

Cost	Per year	3-year total
Tuition fees (England)	£9,250	£27,750
Tuition fees (Scotland, Scottish student)	£0	£0
Tuition fees (Wales, NI)	£9,000-£9,250	£27,000-£27,750
Accommodation (away from home)	£7,000-£10,500	£21,000-£31,500
Living costs (food, transport, social)	£3,500-£5,500	£10,500-£16,500
Books and materials	£300-£600	£900-£1,800
3-year total	-	£60,000-£77,000

Plan 5 student loans - the key facts for parents

Plan 5 applies to English students starting from September 2023 academic year onwards. Key terms differ significantly from older plans:

Feature	Plan 5 (2023+)	Plan 2 (2012-2023)
Repayment threshold	£25,000	£28,470
Repayment rate	9% above threshold	9% above threshold
Interest rate	RPI only (zero real)	RPI + up to 3%
Write-off period	40 years from April after graduation	30 years
Expected % of graduates fully repaying	~50%	~25%

The longer term and lower threshold mean Plan 5 graduates pay more in total over their lifetime than Plan 2 graduates - but at a lower rate per year. The 40-year write-off means around half of graduates never fully repay.

Maintenance loan and parental income

The maintenance loan covers living costs, with the amount tapered by household income. A student "away from home" in London for 2026/27:

Household income	Maintenance loan (London, away from home)
Up to £25,000	£13,762 (maximum)
£35,000	£12,150 approx
£45,000	£10,540 approx
£55,000	£8,930 approx
£65,000+	£7,580 (minimum)

Outside London, the maximum is around £11,140. For students living at home, the maximum is around £8,610. Scotland and Wales have separate maintenance support systems with different tapering.

The parental contribution gap

Worked example: middle-income family, child going to university away from home in London

Household income: £80,000
Annual cost (accommodation £9,500 + living £4,500 = £14,000)
Maintenance loan (£80k income): ~£7,580
Annual parental contribution gap: £6,420
3-year total parental contribution: ~£19,260

This gap is the "hidden cost" of UK higher education that many middle-income families underestimate. The student can fund some via part-time work (£2,000-£5,000/year typical) but the rest typically comes from parents.

Should you save for university? - the strategy

Strategy 1: Junior ISA from birth or age 10£9,000/year JISA allowance (2026/27). £200/month from age 10 to 18 in a Stocks & Shares JISA at typical UK real returns (4-5%) compounds to roughly £25,000-£28,000 by age 18. That covers most of the parental contribution gap.

Strategy 2: Parental Stocks & Shares ISA earmarked for universityUse your own £20,000/year ISA allowance with the intent to draw down during university years. Advantage: more flexible than JISA (which becomes child’s adult ISA at 18 - they can withdraw). Disadvantage: counts as your asset for any benefits assessment.

Strategy 3: General investment account / cash savingsLess tax-efficient than ISA, but uses no allowance. Useful if you’ve already maxed ISAs. CGT exposure on disposal if held in shares/funds (use £3,000 AEA per year).

Strategy 4: Pay university costs from current incomeFor higher-earning parents, paying ongoing university costs from current income (£5,000-£8,000/year) may be the cleanest approach. Reduces tax-deferred or tax-sheltered savings need.

Should you (or your graduate) overpay Plan 5?

Most Plan 5 graduates should NOT overpayThe 40-year write-off plus RPI-only interest fundamentally changes the maths. For a graduate earning a typical UK career progression (£30k → £55k over 30 years), expected total repayments are around 50-70% of the original loan. Overpaying just reduces the write-off benefit without saving meaningful interest. Compare to investing the equivalent overpayment amount - it almost always wins over a 40-year horizon.

Exceptions where Plan 5 overpayment makes sense:

The graduate expects high earnings (£75k+ early career, £100k+ mid-career) - will fully repay anyway
The graduate prefers debt-free as a psychological matter, not maths
The graduate plans to emigrate (Plan 5 follows them but enforcement abroad is patchy)

For most middle-income career trajectories, treating the Plan 5 loan as a "graduate tax" rather than a debt to be repaid is closer to the correct framing. See our Plan 5 overpayment trap deep dive.

Common parental funding mistakes

Mistake 1: Assuming maintenance loan covers everything.It doesn’t for most middle-income families. Plan for a £2,000-£6,000/year parental contribution.

Mistake 2: Not starting saving early.Compound growth makes early saving substantially more powerful. £200/month from age 10 vastly outperforms £400/month from age 16.

Mistake 3: Choosing accommodation purely by price.£500/year cheaper accommodation that’s 90 minutes from campus often ends up more expensive net (transport + opportunity cost).

Mistake 4: Pushing graduate to overpay loan.For most graduates, this is poor advice mathematically. See the dedicated Plan 5 analysis.

Mistake 5: Ignoring tuition-fee differences.Scottish students at Scottish universities pay £0 tuition. Welsh students at Welsh universities pay £9,000 (Welsh Government covers some). The cross-border maths can shift "value" by £27,000+ over a 3-year degree.

Calculate Plan 5 repayment

The student loan calculator shows realistic repayment projections under Plan 5, including the 40-year write-off mechanic and total lifetime cost at different career trajectories.

Open the student loan calculator

Sources and references

UK student loan and tuition fee data from gov.uk student finance and Student Loans Company. Plan 5 terms from the Education (Student Loans) (Repayment) Regulations 2009 as amended. Maintenance loan tapering from gov.uk student finance loans.

UK Tax Drag is educational and not regulated financial, tax, legal or family advice - see the disclaimer for the full position. For decisions with material legal or family consequences (divorce, probate, separation), specialist advice from a solicitor and/or financial adviser is strongly recommended.

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