26 June 2025
In an email to software developers from the Software Developer Support Team (SDST) HM Revenue and Customs (HMRC) has confirmed some key details for Plan 5 Student Loans.
“Key details of Plan 5 are as follows:
- Plan 5 will be operated and collected in the same way as current plan types 1, 2 and 4.
- The earliest repayments will start for PAYE is 6th April 2026.
- Repayments will be made at 9% on earnings over a threshold of £25,000 per annum (before deductions from pay subject to Class 1 NICs).
- Employers will start to receive Student Loan start notices (SL1) in March 2026 for Plan 5 borrowers due to go into repayment from April 2026.
- The start notice will show the plan type which should be collected. As with current guidance employers:
- can only deduct one plan type at a time - Plan 1 or Plan 2 or Plan 4 or, from April 2026, Plan 5
- can deduct postgraduate loan (Plan 3) at the same time as a student loan Plan 1 or Plan 2 or Plan 4 or new Plan 5).
- From 2026/27, Plan 5 will be the new default plan type to use, where employees don’t know their plan type, until the employer receives the start notice.”
Additional specifications and guidance are expected later in the year.
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