Much of the terminology used about universities is based around the experience of students who've come straight from school or sixth form college, studying full-time at a "bricks and mortar" university. The statistics indicate this group is actually a minority, albeit the largest single cohort (see HESA: Student numbers and characteristics for 2024-2025). But despite this most terms (and many tables) default to this experience and talk about other students with reference to them.
The Open University is, by definition, very different. There are no standard rates for taking qualifications with some students taking three years to get a Bachelor's degree and others spreading it out over the sixteen-year limit, taking only one module a year or even a break. Most students study at less than full-time rate and legally all OU students are part-time. So talking of "years" to mean stages of a degree is fairly meaningless.
Instead, the talk is of "levels". These map to the separate years of a three-year full-time Bachelor's degree but avoid confusion with the time taken. So there's Level 1, Level 2 and Level 3.
In addition, modules are weighted in terms of "credits" with each level requiring a student to pass modules worth a total of 120 credits. This aligns with, and uses the same level names as, the Credit Accumulation and Transfer Scheme (CATS) which is used nationally by many universities to measure the value of courses if a student transfers or even just takes a module at another institution. (A more detailed guide to CATS can be found on the University of Southampton's website.)
(Things are a little different with Master's degrees. The taught Master's level appears to always be labelled "postgraduate" rather than "Level M" which has been used elsewhere. A student taking a four-year integrated Master's degree, such as the Master of Environmental Science, will take modules at both Level 3 and postgraduate level at Level 3.)
What can confuse further is the use of other "levels" in qualification frameworks. For example on the page for Criminal law and the courts one will see "Level" and then a list of "OU level: 1, SCQF: 7, FHEQ: 4". These latter two refer to the Scottish Credit and Qualifications Framework and the Framework for Higher Education Qualifications in England, Northern Ireland and Wales (although there's multiple within that). These frameworks cover qualifications all the way from school to doctoral work so have more numbers.
But much of this detail doesn't have to be dived into to take courses with the OU. Instead, there's a straightforward structure that makes clear where one is on the journey to a qualification no matter how long they're taking.
(Image created with Microsoft 365 Copilot.)

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