Plan 5 Student Loans - What Payroll & HR Need to Know Before April 2026

Introduction

From April 2026, employers will have a new Student Loan plan that they have to operate in payroll systems. Whilst software developers are aware of this and will update their products, there is preparation that needs to be undertaken by employers.

In fact, the definition ‘employers’ needs to be expanded to include anyone involved in payroll processing, thereby encompassing all payroll and HR professionals, agents, bookkeepers and accountants.

The simple addition of a new Student Loan plan type needs to be explained logically, coupled with practical advice that can be used regardless of how the payroll is processed. After all, the borrowers who will be repaying under the new plan type will be our employees.

Following comments from professional bodies and representatives, HMRC released the updated Starter Checklist to software developers in December 2025. This adds the new Plan 5 as an option for new employees to select. Plus:

• For employees, it makes clear they should only select one Plan type for operation in the payroll, even if they have multiple plan types
• For employers, it makes clear they must only deduct one undergraduate Loan type (1, 2, 4 or 5) but they can operate a Postgraduate Loan (Plan 3) at the same time

What You Will Learn

This webinar will cover the following:

• What is the new Student Loan plan?
• How will payroll functions be advised to start a deduction
• What is the plan type hierarchy in payroll systems?
• Practical operation examples
• The changes required, internally and with external stakeholders
• The software implications, and
• The essential communications and engagement

This webinar was recorded on 24th November 2025

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