Corporate report

SLC Annual Report and Accounts 2025 - 2026

Published 4 September 2026

1. Chair’s Statement

SLC exists to enable opportunity through the delivery of student finance - this is our core purpose, which we fulfil each year for our customers across the UK.

I am pleased to introduce this year’s Annual Report and Accounts as Chair of the Student Loans Company (SLC), having taken up the role in April 2026 at a pivotal moment for the organisation. SLC is entering a period of significant change, with Enable, SLC’s transformation programme, setting a clear direction for the future. Through this programme, SLC will become a simpler, more modern and increasingly digital organisation, delivering efficiently and effectively for customers, our four government shareholders and colleagues.

This work builds on a strong foundation, following another successful year of delivery of our core public services. In FY2025-26, SLC continued to administer student finance effectively at scale, supporting millions of customers to access further and higher education, while safeguarding public funds and consistently performing well against our shareholder set performance targets.

This performance was delivered against the backdrop of significant public, stakeholder and parliamentary interest in the wider student finance system and the broader higher education funding landscape. As the organisation responsible for administering student finance on behalf of government, SLC was inevitably affected by this heightened public debate. While SLC does not have a policy-making role, we engaged constructively and transparently with parliamentary committees and other stakeholders where invited to do so, helping to inform understanding of the operational delivery of student finance. This heightened level of interest created additional demands on the organisation during the year, which colleagues managed with professionalism and resilience, while remaining firmly focused on delivering for customers, protecting public funds and supporting our shareholders.

In fulfilling this role, SLC continues to act as a trusted delivery partner to government. As a Non-Departmental Public Body (NDPB), SLC operates on behalf of its government shareholders, working closely with them not only to respond to, but to help deliver, evolving policy priorities successfully.

I would like to recognise the significant contribution of my predecessor, Sir Peter Lauener, whose leadership over the past six years has helped position SLC strongly for this next phase. His wise counsel, dedication and professionalism have been instrumental in shaping the organisation, and he leaves it well placed for the future. I wish him every success in the years ahead.

Having served on the Board over the past five years, including as Chair of the SLC Remuneration Committee, I have seen first-hand the scale and significance of SLC’s work and the commitment of colleagues across the organisation in delivering for customers. The SLC Board and I are committed to supporting Chris Larmer as CEO and his wider Executive Leadership Team and look forward to continuing to work with our colleagues, shareholders and partners to deliver our core purpose and realise our ambition to be a simpler, more modern and digital organisation.

Gary Page
Chair
10 July 2026

2. Chief Executive’s Foreword

I am pleased to introduce the Annual Report and Accounts for FY2025-26 as Chief Executive of the Student Loans Company (SLC). Our purpose is to enable opportunity through the delivery of student finance, and for many individuals their first significant interaction with Government is through SLC.

Our role is of significant scale across the UK. As a NDPB operating on behalf of our four government shareholders, we play a critical role in enabling opportunity through access to education and supporting the implementation of government policy. Each year, we process around two million applications for financial support and pay approximately £25 billion to students and their education providers. We are responsible for the assurance of a growing student loan book currently valued at £324.8bn. We deliver this core public service while continuing to support the delivery of Government policy reforms and progressing our transformation into a simpler, more modern and digital organisation.

This year, I am especially proud of one of our strongest ever delivery performances for the annual student finance application cycle. Our strategy to encourage earlier applications this year has been successful, supported by cross-directorate efforts, enhanced digitalisation and self-service, and improved communications. By the end of July 2025, 967k applications were ready to pay (86% of 1.13 million submitted), up from 890k (81% of 1.10 million) the previous year.

We have also delivered a further year of improvement in our Disabled Students’ Allowance (DSA) service, with application processing times reducing and customer satisfaction increasing, reflecting a sustained focus on improving outcomes for our customers. DSA will remain a priority for SLC in 2026-27.

Across our repayments services, we have continued to deliver year-on-year improvements, including increased customer satisfaction and enhancements to the customer experience. During the year, we introduced a new live chat channel, providing customers with greater choice and more accessible ways to engage with our services.

SLC has also advanced delivery readiness for the UK Government’s Lifelong Learning Entitlement (LLE) ahead of its planned introduction from September. We are developing a new Digital Student Finance Service (DSFS) platform to support LLE and have taken the strategic decision to extend this simpler, more modern platform as the future foundation for all our student finance application services. This will support the progressive decommissioning of legacy systems and is expected to reduce both cost and risk over time.

During the year, we have also secured Government approval for the business case for SLC’s long-term transformation through Enable, building on the foundations established through SLC’s previous Evolve programme. This represents a multi-year journey to simplify services, modernise our technology estate and reshape our operating model.

Alongside this, we have continued to work closely with the Department for Education (DfE) and the Office for Students to protect taxpayer funding and the integrity of the student finance system, including through further strengthening of our approaches to identifying and preventing fraud and error.

Our progress this year has been underpinned by the continued commitment and professionalism of our colleagues. As we look ahead to implementing our future Target Operating Model, we are continuing to invest in our people - building skills and capability, strengthening leadership, and reinforcing our culture and values to support long-term success. It is encouraging to see colleague sentiment reflected in an improvement in our employee engagement score, and we remain focused on developing a skilled, engaged and well-supported workforce.

I continue to be supported by a strong Executive Leadership Team, bringing a wide range of skills and experience from across the public and private sectors. I would also like to place on record my thanks to our former Chair, Sir Peter Lauener, who stepped down in March after two terms of service, for his leadership and significant contribution to the Company. I am pleased that Gary Page, an existing SLC Non-Executive Director, has taken up the role of Chair, bringing substantial experience, insight and continuity as we further deliver our strategic priorities. I would like to express my thanks to colleagues across SLC, our Non-Executive Directors, and our four government shareholders, with whom we continue to work shoulder to shoulder in delivering our shared priorities.

Chris Larmer
Chief Executive Officer
10 July 2026

3. Strategic Report

The Annual Report and Accounts for FY2025-26 provide an open and transparent view of the performance of SLC over the last 12 months. It highlights what has gone well, where challenges were experienced and provides an overview of the company’s future direction.

3.1 Overview - About SLC

SLC is a UK public sector organisation responsible for providing student funding (in the form of loans and grants) to approximately two million new and returning students annually in higher and further education across England, Northern Ireland, Scotland and Wales, in accordance with statutory functions established under primary and secondary legislation.

It is a non-profit making organisation. The company is wholly in public ownership; the four UK Government Administrations are its shareholders and since April 1996 SLC has been classified as an executive NDPB.

As one of HM Government’s (HMG) key strategic delivery partners and the DfE’s largest partner organisation by headcount, HMG relies on SLC to assess new and returning students and learners each year; to manage a total customer base of 9.87 million applicants, students, sponsors and repayers; and to manage a growing loan book of £324.8bn at the end of March 2026 (up from £294.1bn at 31 March 2025).

Tailored policy and student finance services

Student finance is a devolved matter across the UK. The SLC does not set student finance policy. The company’s role is to administer student finance products on behalf of the UK Government and the Devolved Administrations, in accordance with legislation, regulations and directions issued by the respective Ministers.

SLC tailors its delivery model to meet the distinct policy, legislative and operational requirements of each of its four Government shareholders reflecting the different student finance systems operating across the UK.

In this context, SLC administers the payment of grants and loans and the management and collection of loan repayments strictly in line with Ministerial policy decisions and legislation. The company has no role in setting eligibility criteria, loan amounts, interest rates or repayment terms, and operates within the statutory framework established by each administration.

Separately, the company is also contracted by many higher education providers to securely administer the payment of bursaries to their selected students.

A single UK-wide repayment service

SLC assures repayment services on behalf of all four UK administrations. The growing “income-contingent repayment” (ICR) loan book is predominantly owned by HMG, with a small portion of it owned by private investors. SLC is responsible for the assurance of the entire asset, and SLC works in partnership with HMRC to facilitate student loan repayments through PAYE and self-assessment. While most repayments are made directly to HMRC, SLC collects repayments too - from those borrowers outside the UK tax system; additionally, any borrower may choose to repay SLC directly should they wish to do so.

The student loan book is a significant UK Government asset. While the English student loan book is recorded on the DfE balance sheet, student loans issued by the devolved administrations are recognised separately in the financial statements of the Scottish Government, Welsh Government and the Department for the Economy, Northern Ireland.

Note that the value of the loan book referred to in this document represents the face value of the total UK loan book, not the carrying value reported in the DfE Consolidated Annual Report and Accounts, which relates to the English student loan book only.

The overall loan book balance across all domiciles, split between higher and further education, in billions, is as follows:

England (HE)	Wales	Northern Ireland	Scotland	HE Total	England (FE)	UK Grand Total
294.6	11.8	6.0	10.4	322.8	2.0	324.8

Working with partners and government bodies

As part of SLC’s role in effectively administering student finance services, SLC collaborates with a range of partners across the education landscape:

• The Universities and Colleges Admissions Service (UCAS) provides the national admissions service.
• The Student Awards Agency for Scotland (SAAS) assesses students’ applications for finance in Scotland.
• The Office for Students (OfS) regulates the higher education sector (in England), and is responsible for graduate outcomes and provider compliance.
• Universities UK provides a collective voice and promotes the sector.
• The Public Sector Fraud Authority (PSFA) works across Government to reduce fraud.

Key facts

• SLC operates from four offices across the UK: these are in Glasgow city centre, Hillington, Darlington and Llandudno Junction.
• At 31 March 2026, the company’s 9.87m customers comprised:
  • 6.78m with loans in repayment
  • 1.57m with loans but not yet in repayment
  • 0.04m with grants only
  • 0.37m with applications but not yet paid
  • 1.11m sponsors
• SLC processed 2.01m applications for student funding in relation to the 2025/26 Academic Year.
• SLC paid £24.73 billion during the FY2025-26 financial year to students and their education providers, comprising:
  • £11.75 billion in maintenance loans
  • £0.04 billion in maintenance grants
  • £11.85 billion in tuition fee loans
  • £0.30 billion in tuition fee grants
  • £0.79 billion in other grants
• The number of education providers receiving payments directly from SLC during AY2025/26 were:
  • 657 HE providers (across the UK)
  • 439 Advanced Learner Loan providers (FE, England)
• In addition, we also work with 411 schools and colleges (FE Wales and Northern Ireland) for the administration of Education Maintenance Allowance (EMA).
• SLC received 1.3m enrolment confirmations from education providers (required before the release of maintenance loan payments).
• SLC received 2.5m attendance confirmations from education providers (required before the release of fee loan instalments).
• Education providers sent SLC 0.3m notifications of corrections or changes in student circumstances.

SLC strategy

A renewed Corporate Plan

The timing of the UK General Election led SLC to defer publication of a new Corporate Plan to ensure alignment with the Government’s Comprehensive Spending Review (CSR). The forthcoming Corporate Plan will therefore cover the period 2026-27 to 2028-29, aligning with Government funding settlements and strategic priorities.

This period represents a significant phase of organisational change as SLC continues its transition to a simpler, more modern digital organisation, aligned with the Government’s digital agenda.

SLC’s Evolve Programme (2019-2023), the company’s previous transformation programme, established the foundations for improved customer journeys, enhanced digital services and the building blocks for technology modernisation. The programme was independently assured by the Infrastructure and Projects Authority (IPA) and achieved a “green” rating, reflecting the company’s successful delivery.

Building on these foundations, SLC has commenced the next phase of its transformation through Programme Enable, a multi-year, organisation-wide transformation programme. The Programme will be the primary vehicle for delivering the company’s long-term strategic ambitions, further simplifying services, advancing the modernisation of its technology estate, and improving outcomes for customers, colleagues and shareholders.

Purpose, strategic objectives and outcomes

SLC’s purpose remains to enable opportunity through the delivery of student finance, underpinning its role as a trusted delivery partner to the UK Government and the Devolved Administrations.

The Corporate Plan sets out three strategic objectives:

• Perform - the effective and efficient delivery of student finance, reflecting SLC’s core public service role in administering loans and grants, ensuring the timeliness and accuracy of payments, and the effective collection of repayments.
• Reform - delivery of Government policy reforms, acting as a trusted delivery partner to shareholders in implementing changes to the student finance system. This includes delivery and embedding of the UK Government’s Lifelong Learning Entitlement for English domiciled students, which will provide a flexible funding system enabling individuals to learn, upskill and retrain across their working lives.
• Transform - creating a simpler, more modern and digital SLC, primarily through Programme Enable.

SLC assesses its performance against these objectives through three strategic lenses: customer, shareholder and colleague, with defined target outcomes for each.

For our customers, SLC aims to improve satisfaction and ease of access to services, while enhancing the speed and flow of the end-to-end customer journey. We engage with customers through our Customer Panel to ensure we understand evolving user needs and expectations. We are also committed to providing more tailored support for those with additional needs.

For shareholders, success is measured through the delivery of policy reforms and transformation activity, improvements in efficiency and cost to serve, reductions in fraud and error, the collection of repayments due, and compliance with regulatory and statutory requirements.

For colleagues, SLC continues to focus on creating a positive, inclusive and healthy workplace, supporting a consistent and high-quality colleague experience, and developing a workforce with the skills required to deliver the company’s strategic ambitions.

3.2 Performance Analysis

Shareholders confirm SLC’s role, core responsibilities and priorities each year in an Annual Performance and Resource Agreement (APRA). This document also sets out the company’s annual budget and outlines a set of key performance measures and targets which shareholders expect SLC to meet - the APRA measures and targets. Performance against these targets is regularly monitored and reported by SLC’s Executive Team, its Board and DfE (on behalf of all four shareholders).

APRA performance summary

Shareholders set twelve APRA targets for FY2025-26. SLC exceeded nine of them - these all reported a “green” RAG status for the full year; SLC’s annual employee engagement score improved this year, but remained below the 60% APRA target, and this measure was rated “amber”.

Two measures were rated “red” because SLC underspent against both its administration and capital budgets in FY2025-26. Although forecasts showed that SLC could remain within APRA budget tolerance limits, this relied on the resolution of an outstanding legal case. As the case was not concluded by year end, SLC recorded underspends beyond APRA tolerances in both budgets.

Notably, every measure associated with customer service exceeded its target during FY2025-26.

The table below sets out the full year APRA performance to 31 March 2026:

APRA Measure and Target	FY2024-25 Performance	FY2025-26 Performance	FY2025-26 RAG Status
Customer Lens:
Apply-to-Pay Customer Satisfaction to be ≥ 75%	80.8%	82.4%	GREEN
Repay Customer Satisfaction to be ≥ 62%	63.6%	64.3%	GREEN
Disabled Student Allowance Customer Satisfaction to be ≥ 70%	(New Target for 2025-26)	71.8%	GREEN
Ease and Efficiency: Digital Engagement to be ≥ 92% (Combined A2P/Repay)	93.8%	94.1%	GREEN
Quality Outcomes to be ≥ 92% (Combined A2P/Repay)	94.4%	94.7%	GREEN
Shareholder Lens:
Variance from Administration budget (from +2% under to -0% over)	£0.6m / 1.4% underspend	£2.7m / 6.2% underspend against £44.11m budget	RED
Variance from Programme budget (from +5% under to -1% over)	£0.9m / 0.4% underspend	£7.1m / 2.8% underspend against £250.30m budget	GREEN
Variance from Capital budget (from +5% under to -5% over)	£2.8m / 13.1% underspend	£1.7m / 11.7% underspend against £14.48m budget	RED
Technology Service Experience to be ≥ 87%	95.1%	96.0%	GREEN
Repayment Efficiency to be ≥ 90%	91.9%	91.5%	GREEN
Fraud Savings Return on Investment to be ≥ £47.3m / 18.7 to 1 RoI	£45.5m / RoI of 26 to 1	£56.3m / RoI 23.4 to 1	GREEN
Colleague Lens:
Employee Engagement Index to be ≥ 60%	Revised measure for 2025-26	58%	AMBER

Customer

Academic cycle

SLC’s Academic Year 2025/26 cycle was one of its most successful ever, outperforming previous cycles from the service-launch, with both the number of applications submitted and the number paid or ready-to-pay tracking well ahead of previous years.

The success was the result of a combination of effort and initiatives from across the organisation, including: increased processing speed and refined processes; strong proactive communications campaigns; interventions to improve automation and significantly reduce the volume of telephone calls reaching the contact centre, in turn enabling a markedly lower average speed of answer, fewer abandoned calls and reduced repeat contact. On this year’s A-level results day there was a 99.9% reduction in abandoned calls compared with that day on the previous year, and a drop in wait times of 21 minutes and 43 seconds - an excellent results day for SLC’s customers, shareholders and colleagues.

SLC also successfully reduced the volume of students entering the academic year in a temporary non-means-tested payment position, improving the timeliness of accurate assessment where supporting information is pending.

Disabled Student Allowance

In FY2025-26, SLC continued to work with two external suppliers who provide a “one-stop-shop” service for eligible students in England and Wales. This service covers both the assessment of support needs and the provision of assistive technology and training. Following sustained management focus, the customer delays seen in FY2024-25 reduced significantly. Both suppliers consistently met their framework targets, delivery timescales improved, and DSA customer satisfaction increased gradually, ultimately meeting the APRA target.

Shareholder

Repayments performance

• Of the 6.78 million customers who, at the end of the year, had loans that were eligible to be repaid, 91.5% were verified to be in the correct repayment channel, which again exceeded the APRA target (90%) for this measure. In addition to the repayments made directly to HMRC (via payroll deductions or self-assessment), SLC also collected a further £135.7 million over the year, including from customers outside of the UK tax system. At the same time assisted contact for repayment customers reduced by 9% year-on-year, reflecting the impact of the enhanced self-service options that SLC has delivered for repayment customers.
• During FY2025-26, SLC also facilitated historic “below-threshold” refunds totalling £98 million. In line with student finance policy these refunds were made to customers where repayments had been made in year, but by the end of the financial year, the customers’ earnings were below the annual repayment threshold.

Programme Enable

Programme Enable is SLC’s organisation-wide transformation programme and a central element of its long-term strategy. The programme is designed to reshape how SLC delivers student finance, enabling the organisation to operate as a simpler, more resilient and modern digital delivery body, aligned with the Government’s digital agenda. Programme Enable will deliver across three financial years 2026-27 to 2028-29.

Enable builds on earlier investment in customer experience, digital capability and technology modernisation, and focuses on reconfiguring customer services, core systems and organisational design. At its core is the development of DSFS, providing a single, scalable platform for customers to access student finance products across the UK and supporting greater consistency of service for learners. In 2025-26, SLC also undertook preparatory activity to lay the foundations for Enable delivery. These activities have established a strong foundation for delivery and benefits realisation over the life of the programme.

The programme will address longstanding risks associated with legacy technology, strengthen operational resilience and improve the organisation’s ability to respond to future policy change for all shareholders. Through increased digital self-service, greater use of data and automation, and the rationalisation of systems and processes, Enable is expected to reduce SLC’s cost-to-serve and improve overall value for money for the public purse.

HE policy reforms

The Lifelong Learning Entitlement (LLE) is a significant reform to the student finance system in England and will become the framework through which eligible English-domiciled learners access student finance for Level 6 and many Level 4 and 5 courses.

SLC is responsible for delivering the student finance system changes required to support LLE, including the implementation of new digital services, processes and operational capabilities. The company has undertaken sector readiness activity to support providers and continues to work closely with the DfE as policy and delivery requirements are confirmed.

Significant delivery activity took place in FY2025-26 and the programme remains on track for launch in September 2026, supported by active management of delivery and operational risks.

Following a commission from DfE, SLC has recently completed the Inception phase of the programme to develop a shariah compliant Alternative Student Finance (ASF) product. This work will support ongoing engagement with shareholders to inform decisions on the sequencing and implementation of student finance policy reforms.

Safeguarding public money

For the 2025-26 financial year, the Public Sector Fraud Authority set SLC a significantly increased fraud prevention target, rising from £10.0m in 2024-25 to £47.3m in 2025-26. Notably, SLC again exceeded the target, with £56.3m confirmed savings by the end of March 2026, a return on investment of 23.4 to 1 based on the annual cost of the company’s Economic Crime Unit.

Colleague

Colleague engagement

The company’s FY2025-26 “Our Voice” survey completed in March 2026, with 77% of colleagues taking part. Overall engagement measured at 58% - an improvement on the previous annual survey, but below the APRA target set by the Board and shareholders (60%). This result is rated amber.

The survey showed that line-management, wellbeing and inclusion have continued to be key strengths. There were also improvements in perceptions of senior leadership, and increased confidence in organisational and local communication and engagement. Growth and development opportunities were the lowest-scoring themes and will remain a priority area for action. Further targeted action plans at division, directorate and corporate level will be developed to support continued progress in improving engagement.

Values and culture

During the year, SLC refreshed its organisational values through engagement with colleagues across the business. The resulting values - Honesty, Empowerment, Accountability, Respect and Trust (HEART) - provide a clear framework for expected behaviours and are being embedded across the organisation.

These values support delivery of the Corporate Plan, defining how it will deliver its role as a public service provider, with a clear ambition to be recognised as an exemplar of public service delivery.

Key Risks and Risk Events

A defined SLC risk reporting hierarchy exists to ensure a consistent approach to the identification, reporting, and escalation of SLC’s most significant risks. Risks are discussed and challenged in each directorate via a Directorate Risk Forum, chaired by the respective ELT member four times a year. ELT members then, in turn, provide a summary report for the period in question to the Executive Risk Forum (ERF), chaired by the Accounting Officer - also four times a year. Second line Risk Category Owners (RCO) provide review and challenge for their respective risk areas throughout the year. Consolidated risk reports and RCO assurance reports are provided to the Audit and Risk Committee four times a year.

The journey for each significant risk in the review period is summarised as follows:

Area	Risk Description	25-26 Journey
Legacy Technology	Failure to define, measure and manage the SLC IT estate, encompassing legacy and current systems may result in a failure to maintain critical business services.	A strategic decision was taken in-year to fund the accelerated preparation to move from legacy IT systems to the new Digital Student Finance System (DSFS). This brings alignment across broader transformational change (via Programme Enable), which has now received approval to proceed with full funding, and policy delivery (LLE).
Cyber Security	Failure to keep pace with the persistent external cyber threat and evolving control requirements that support delivery of the technology strategy.	Focus has remained on ensuring that controls remain operationally effective in mitigating current threat levels, through incremental enhancements. A GovAssure independent review in the period confirmed the current adequacy of controls against the NCSC Cyber Assessment Framework.
Information and Data Handling	Inappropriate handling and processing of data may lead to a breach of legislative or regulatory requirements.	The risk remained stable throughout FY2025-26, with material progress made to mature the current compliance position. The previous multi-year programme of work will now coalesce around the delivery of systems and data management improvements delivered via Programme Enable.
Customer	The environment in which SLC is bound to operate creates complex processes and systems, resulting in potential customer detriment.	A new risk has been captured to identify, track and mitigate the various internal and external factors creating customer impacting issues. This includes working with DfE to address areas of policy and system complexity.
Data Quality	Poor data quality or ineffective data management caused by the lack of a data governance and management framework.	Activity has focused on designing an effective policy and framework. This work is important across the risk profile, for example in supporting loan book integrity.

Given the current volume and crossover of change and policy delivery activity, the reliance and impact on key subject matter experts is being closely overseen and managed, work is underway to grow capacity and capability where needed in order to support ongoing delivery of SLC’s key priorities.

Financial Performance and Position

SLC is primarily funded through Grant-in-Aid, received from DfE as SLC’s sponsor department. DfE receives appropriate apportionments of this funding from the three Devolved Administrations:

• The Welsh Government
• The Scottish Government
• Department for the Economy, Northern Ireland

This funding is also analysed through the “parliamentary lens” - that is, by Admin, Programme and Capital, as defined in HM Treasury’s Consolidated Budgeting Guidance (CBG).

DfE confirms SLC’s budget in the APRA letter, which provides a breakdown of the funds through both the business and the parliamentary lenses.

Grant-in-Aid funding

As part of the Government’s Budgeting Framework, Grant-in-Aid funding is allocated each year from the Departmental Expenditure Limit (DEL). This comprises two distinct budgets: net resource spending (resource DEL), which is split into Administration and Programme expenditure and Capital expenditure (capital DEL).

Resource DEL (Admin and Programme) is further divided into cash and non-cash components. In 2025-26, the cash element is £294.4m (2024-25: £269.8m). The non-cash element, which covers items such as depreciation and amortisation, amounts to £28m in 2025-26 (2024-25: £27.9m).

Grant-in-Aid funding for delivery of SLC core activities and change projects

	2025-26 DEL Administration £’000	2025-26 DEL Programme £’000	2025-26 DEL Capital £’000	2025-26 Total £’000
Non-ringfenced (Cash)	44,111	250,304	14,482	308,897
Ringfenced (Non-cash)	7,000	21,000		28,000
Total	51,111	271,304	14,482	336,897

	2024-25 DEL Administration £’000	2024-25 DEL Programme £’000	2024-25 DEL Capital £’000	2024-25 Total £’000
Non-ringfenced (Cash)	40,084	229,711	21,607	291,402
Ringfenced (Non-cash)	6,964	20,891		27,855
Total	47,048	250,602	21,607	319,257

In addition to DEL funding, SLC receives Grant-in-Aid funding for Annually Managed Expenditure (AME). This covers expenditure which cannot be fully controlled. The AME element of budget granted from DfE amounted to £1.7m charge (2024-25: £1.5m charge).

The non-ringfenced (cash) Grant-in-Aid of £308.9m, as presented in the table above, represents the budgeted allocation for FY2025-26. This is £7.0m higher than the £301.9m reported under Changes in Taxpayers’ Equity, which reflects the actual cash requirement. The difference arises from a combination of underspends against the allocated budget and accounting transactions that do not require cash outflows, such as accruals and prepayments, and includes AME related expenditure.

AME expenditure

The table represents AME expenditure included in the Statement of Comprehensive Net Expenditure.

	2026 £’000	2025 £’000
Pension interest charge / (income)	742	971
Pension administration expenses	387	302
Provisions	(118)	(34)
Depreciation	-	-
	1,011	1,239

Non-Grant-in-Aid funding

During FY2025-26, £3.0 million of non-GIA funding was received. An ongoing source of funding was provided through contributions from universities and colleges participating in the Bursary Administration Scheme, under which SLC administers bursary and scholarship payments, £1.0 million (2024-25: £1.0 million). In addition, £1.3 million was received from Higher Education Providers (HEPs) during the year to fund a technical enhancement to the system. A further £0.7 million (2024-25: £0.9 million) from Criminal Injuries Compensation Authority (CICA) for rental of the first floor at Clyde Place, which they occupy.

SLC was awarded £2.0 million of one-off funding by the Digital Inter-Ministerial Group (IMG) from its Innovation Fund to support the unified customer data profile project. The funding was available for use in-year only. Expenditure in 2025-26 totalled £1.3 million.

Year-end outturn

The overall outturn was £319.8m (2024-25: £314.1m). This included an underspend of £11.5m against our non-ringfenced cash (2024-25: £4.3m) and £5.5m (2024-25: £0.9m) against our ringfenced non-cash budget. In total, this represents a £17m underspend (2024-25: £5.1m) against the APRA budget, as shown below:

Final budget outturn position of net expenditure

	2025-26 Budget £’000	2025-26 Outturn £’000	2025-26 Variance £’000
Non-Ringfenced (Cash)	308,897	297,365	11,532
Ringfenced (Non-cash)	28,000	22,477	5,523
Total DEL	336,897	319,842	17,055

The non-ringfenced cash underspend of £11.5m comprises £2.7m against the Admin budget and £7.1m against the Programme budget. Programme spend was within budget tolerance, while Admin spend was outside the agreed performance measure set out in SLC’s APRA letter. There was further underspend of £1.7m on the Capital budget, which is also outside the performance measure. SLC recorded a level of underspend across Admin, Programme and Capital primarily due to an outstanding legal case not concluding by financial year end.

Ringfenced non-cash budgets were underspent by £5.5m in FY2025-26. This was mainly due to a reduced depreciation charge in year as a result of revisions to SLC’s useful economic lives introduced in FY2024-25. In addition, depreciation was impacted by lower-than-anticipated capitalisation of internally generated software.

The table below reconciles the net expenditure for the year as shown in the Statement of Net Expenditure with the outturn for the year, as noted above, in respect of our budget position as reported to DfE.

Reconciliation to Statement of Comprehensive Net Expenditure (to the nearest £100,000)

Reconciliation to Financial statements	2026
	£’000
Staff and restructuring costs	152,000
Depreciation, amortisation and impairments	22,500
Other administrative expenses	135,000
Finance Costs	1,800
Net expenditure per SoCNE	311,300
Non-Grant-in-Aid income (note 3)	(3,000)
Finance income	(100)
Net income per SoCNE	(3,100)
Non-Grant-in-Aid expenditure excluded from outturn	(1,500)
Non-Grant-in-Aid income excluded from outturn	1,300
Adjustments for non-Grant-in-Aid income and expenditure	(200)
AME expenditure recognised in SoCNE	(1,000)
AME expenditure in SoCNE	(1,000)
Capital expenditure	15,200
Non-Grant-in-Aid Capital	(1,000)
Capital AME recognised in SoFP	(1,400)
Net capital outturn	12,800
Total outturn	319,800

Staff and Restructuring Costs

Total Staff costs have increased by £9.9m (7.0%) from £141.8m in 2024-25 to £151.7m in 2025-26.

This increase was primarily driven by £3m relating to the full year impact of the FY2024-25 pay remit and £2m relating to the part year impact of the pay remit uplift implemented in October 2025. In addition, the UK increase in higher employer National Insurance contributions from April 2025 resulted in an increase (£3m), and there was the introduction of a new company-wide performance related pay scheme (£1m) made to staff, excluding ELT, this bonus related to performance in FY2024-25 but was paid in FY2025-26.

In addition, SLC employee costs charged to capital projects reduced from £5.4m in 2024-25 to £3.5m in 2025-26. A decrease of 35.0% £1.9m.

Indirect Staff costs for the year were £1.5m (2024-25 1.1m).

Depreciation, Amortisation and Impairments

Depreciation, amortisation and impairment charges of £22.5m (2024-25 £27.0m) are in line with capitalisation policies on both existing assets and additions net of disposals in 2025-26. The movement in depreciation and amortisation charge for the year reflects a lower asset base due to the ongoing move to cloud-based solutions.

Other Administrative Expenses

Overall, other Administrative spend increased by £8.6m to £135.4m compared to £126.8m in 2024-25.

The majority of the in-year movement relates to Technical Service Delivery, with an increase of £8.0m from £46.6m in 2024-25 to £54.6m in 2025-26. The movement is due to the reduction in less Internally generated assets being developed and as a result, more labour costs are expensed in year.

Technology, Licences, Voice & Data spend increased by £2.8m offset by a reduction in Postage & Courier costs of £2.4m.

Note 2 to the accounts shows spend by operating segment but does not split staff and other administrative expenditure. More detail on the movement by category can be seen in Note 4 to the accounts showing smaller movements. Increased spend on Professional Services, Premises Costs, General Expenditure, Bank Charges and Recruitment totalled £1.3m. These increases were offset by spend reducing by £1.1m across Outsourced Services, Postage & Courier, Office Services and Other.

Financial Risks and Challenges

SLC reviews it’s priorities on an ongoing basis and engage with DfE regularly on our in-year financial performance, SLC are subject to cost pressures from inflation increases across operating costs as DfE funding for FY2026-27 will not include any non-pay inflationary uplift. To mitigate the risk of overspending, we have additional budget controls in place.

Sustainability

Greening Government Commitment Performance

As an executive NDPB, SLC reports quarterly Greening Government Commitment (GGC) figures to the DfE. In line with the broader GGC goals, we aim to reduce our emissions, and waste and water consumption. This is reflected in the targets we have set out below.

Performance continues to be reported against the 2017-18 GGC baseline, in line with current guidance. Government has signalled an intention to recalibrate the baseline using 2025-26 data. Additional narrative has been included to provide context across the key themes of Emissions, Restoring Nature and Waste.

Performance against baseline

Category	Target	2025-26	2017-18 baseline	Percentage change from baseline
Overall greenhouse gas emissions (t CO2e)	Reduce overall greenhouse gas emissions by 56% from baseline	784	2,261	-65%
Direct greenhouse gas emissions (t CO2e)	Reduce direct greenhouse gas emissions by 36% from baseline	2	646	-96%
Overall waste generated (tonnes)	Reduce overall waste generated by 15% from baseline	202	352	-43%
Proportion of waste that is recycled	Increase the proportion of waste that is recycled to at least 70% of waste	80%	50%	+60%
Paper consumption (A4 equivalent reams)	Reduce paper consumption by 50% from baseline	2,125	3,780	-44%
Water consumption (m³)	Reduce water consumption by at least 8% from baseline	11,706	7,905	+48%
Domestic air travel (Tonnes of CO2e)	Reduce the emissions from domestic flights by 30% from baseline	25.30	57.93	-56%

No waste was disposed of to landfill during the year; therefore, the proportion sent to landfill is not reported.

Task Force on Climate related Financial Disclosures (TCFD)

Compliance Statement

SLC has reported on climate-related financial disclosures consistent with HM Treasury’s TCFD-aligned disclosure application guidance, which interprets and adapts the framework for the UK public sector. SLC does not consider climate to be a principal risk, and has therefore complied with the TCFD recommendations and recommendations disclosures around:

1. Governance (all recommended disclosures)
2. Metrics and targets (all recommended disclosures)
3. Risk management (all recommended disclosures)

SLC does not currently consider climate a principal risk, a significant component of another principal risk, or otherwise to be material. This is due to the existence of effective controls such as robust business continuity planning and cybersecurity protections.

Governance and Management

Climate-related risks are regularly assessed and managed through a combination of internal and external governance frameworks. At present, SLC has not identified any principal climate-related risks. To support ongoing monitoring, SLC is developing a climate risk and adaptation assessment log to record the factors informing this position and to track any future changes or emerging risks. The results of this exercise will be shared with ARC and are expected to be integrated into risk and compliance management processes by September 2026.

SLC’s Sustainability Board was established in FY2024-25 to identify emerging climate-related risks and opportunities, escalate them to Risk and Compliance teams, and develop initiatives to improve sustainability across all directorates. The Board includes colleagues from across the organisation, including the Green Matters network, and is led by the Head of Estates and Business Continuity and the Sustainability Manager.

In consultation with the DfE, SLC has developed a Sustainability Strategy covering FY2026-27 to FY2030-31. The strategy sets out a clear vision for what SLC aims to achieve and explains how this aligns with the DfE strategy, Greening Government Commitments, and the United Nations Sustainable Development Goals. It also outlines the actions we will take to deliver this vision.

Our key goals are:

1. Environment: Achieving Net Zero by 2050 and strengthening climate resilience
2. Society: Championing sustainability
3. Governance: Building a responsible business

The strategy identifies several opportunities to support these goals, including:

• Developing sites to encourage greater use of active and public transport
• Providing training to help employees understand their role in delivering the strategy
• Improving the carbon efficiency of our estate and reducing SLC’s overall carbon footprint
• Improving water efficiency across our estate
• Making more efficient use of our buildings

The business achieved ISO 14001 accreditation in 2023 and continues to work within its parameters, including transparent third-party audits and disclosures.

To date, 20 SLC colleagues have completed their Climate Literacy training with more training sessions planned. This training will allow those colleagues who have attended to train others internally.

SLC provides quarterly reports to DfE detailing all aspects of historic and current energy and resource usage.

Metrics and Targets

SLC report Scope 1, Scope 2, and Scope 3 greenhouse gas emissions in line with Greening Government Commitments (GGC) requirements and the methodology set out in the Sustainability Reporting Guidance 2025-26.

SLC does not manage or supply physical products. The organisation has established a robust business continuity framework that helps mitigate key climate-related risks through strong third-party support arrangements and hybrid working practices.

FY2025-26 has been set by the GGC as the next baseline year for all NDPBs. Performance in subsequent years will be measured against this baseline to track progress against identified opportunities.

Risk Management

SLC has a strong and mature risk management framework to identify, assess, and manage all risks across the organisation, as detailed in the ‘Our Strategy, Key Risks and Issues’ section of this report. The approach to climate risk follows the same principles as other risk categories, as defined in the SLC Risk Management and Compliance Policy. SLC operates in a low-risk environment with no manufacturing activities, carrying minimal exposure to environmental risks.

In recent years the organisation has invested heavily in decarbonisation and the strategic “right-sizing” of its estate to enhance sustainability and reduce environmental impact. SLC identifies climate related risks by regularly reviewing resource efficiency and consumption, reporting these through the Sustainability Board who meet quarterly. Any risks identified are incorporated into the Estates and Business Continuity team’s reporting and, depending on their rating and materiality, may be escalated to the SLC risk register and broader risk category reporting framework.

SLC contract a third-party UK-based workplace health, safety and environmental compliance company to carry out an independent review of our buildings, with particular focus on the environment (air quality and water).

In addition, SLC’s Total Facilities Management (TFM) provider (CBRE) provide specialist environmental input to work with the Estates management team to review the efficiency of our plant and equipment with a particular focus on reducing SLCs environmental impact, a formal monthly meeting is held to review the recommendations from this work.

Environment, Sustainability and Corporate Responsibility

As previously noted, SLC has developed a Sustainability Strategy and will publish this in FY2026-27. It has been under development in consultation with DfE throughout the year. Publication of the strategy was delayed from FY2024-25 as more time was required to align with the development of DfE’s own sustainability strategy.

We will use this as a platform to broaden and enhance reporting that helps demonstrate SLC’s commitment to sustainability and ensures we conform with the requirements of FReM. This new Sustainability Strategy will set targets and objectives for the company for the next 5 years and will be supported by SLC’s Sustainability Board.

As part of our alignment to the mandatory UK Greening Government Commitment “Making space for thriving plants and wildlife” SLC has introduced urban hives as well as progressing our own SLC nature recovery plan by raising awareness of biodiversity issues, identifying and taking opportunities to integrate biodiversity considerations into our service areas, and protecting and enhancing biodiversity.

By hosting hives at our offices SLC uses them as an educational tool and we regularly offer “bee tours” where colleagues can hear directly from an expert about bee behaviour and biology, and their role in sustaining biodiversity. These tours help colleagues understand the ecological importance of bees and can inspire us to plant bee-friendly flowers in our own gardens.

Our approach aligns with the Pollinator Strategy for Scotland and the expected Pollinator Action Plan to come from DEFRA in 2026, as part of the overarching commitments of the Environment Act (2021) to halt the decline in species abundance by 2030.

SLC has a small fleet of 4 vehicles, all of which are fully electric with electric vehicle charging stations installed at all SLC office sites. In addition, the Estate is entirely powered by Renewable Energy Guarantees of Origin (REGO) certified electricity and the use of Gas has been eliminated from all SLC sites.

Mitigating climate change and Net Zero 2050

In line with the reporting requirements of the government sustainability reporting framework, energy use, energy savings and associated carbon emissions data for FY2025-26 are detailed below. SLC’s energy consumption is captured from electricity bills, our resultant emission figures are calculated using carbon factors provided by the DfE within the quarterly return spreadsheet provided to us. Waste figures come from our TFM provider (including percentage of waste recycled or converted to energy) as part of their monthly reporting. Business travel data is provided by SLC Commercial and Finance and comes from expenditure and contract detail/analysis. Gas consumption has ceased since March 2025 and does not feature in reporting.

Following guidance published by the Department for Energy Security and Net Zero and the Department for Environment, Food and Rural Affairs, total greenhouse gas emissions are calculated using current conversion factors for the reporting year.

	2017-18	2021-22	2022-23	2023-24	2024-25	2025-26
Total gross emissions for Scope 1 (direct emissions) *	646	781	828	449	28	2
Total gross emissions for Scope 2 (energy indirect)	1,615	1,109	1,073	982	908	624
Total gross emissions for Scope 3 (other indirect) **	-	-	-	-	139	158
Total emissions	2,261	1,890	1,901	1,431	1,075	784

* Scope 1 includes the gas SLC uses to fire boilers. This has been removed since March 2025.

** Scope 3 (other indirect GHG emissions): all other emissions which occur as a consequence of activity, but which are not owned or controlled by the accounting entity, this is primarily business travel emissions. SLC started recording these in FY2024-25.

The primary reason for our successful reduction in emissions has been our focus on carbon hotspots related to energy demand and energy source selection. We have decarbonised our fleet to have zero tailpipe emissions, no longer procure any fossil derived fuel, and have recalibrated our office sizing to better reflect the needs of a modern hybrid workforce. Following last year’s 356 tonne reduction of CO2e, FY2025-26 saw a further reduction of 294 tonnes, equivalent to a reduction of 27% of overall emissions.

Business travel

	Unit	2017-18	2021-22	2022-23	2023-24	2024-25	2025-26
Fleet	000’s Km	107.3	148.2	177.3	222.4	209.9	203.7
Non-Fleet		157.3	20.2	71.1	23.3	15.1	23.0
Rail	000’s Km	369.5	38.4	516.1	844.6	920.8	1,071.0
Air	000’s Km	161.6	19.8	110.7	154.7	181.0	171.1
Total business travel	000’s Km	795.7	226.6	875.2	1,245.0	1,326.8	1,468.8
	Tonnes of CO2e	201.15	34.84	89.59	91.54	93.37	97.19

SLC’s greenhouse gas emissions from air travel

	Unit	2017-18	2021-22	2022-23	2023-24	2024-25	2025-26
Domestic flights	Tonnes of CO2e	57.93	2.57	20.08	19.08	29.13	25.30
International flights	Tonnes of CO2e	-	-	-	-	-	1.8
Total emissions	Tonnes of CO2e	57.93	2.57	20.08	19.08	29.13	27.10

Air travel remains circa 50% less than the baseline 2017/18.

Waste minimisation and management

In FY2025-26, SLC recycled 163 tonnes of waste, representing 80.7% of total waste generated and a 13.5% increase on the previous year’s recycling rate. The rise in overall waste was primarily due to a refit at the Hillington site, a storage clearance, and the disposal of furniture that had reached the end of its useful life.

58.4% (118 tonnes) of our total waste is confidential waste, with 101 tonnes of that being created by our Darlington site in relation to a process change regarding exiting a warehouse.

8% (17 tonnes) of total waste is comprised of electronics which are classed as other waste and are recycled or reused. All other waste is municipal.

The cost of waste disposal in FY2025-26 was £82,111 (FY2024-25 £84,431). Food waste is included in the energy from waste figure. There is no separate compostable waste figure.

SLC has been unable to collect and apportion financial information for certain waste and paper sustainability disclosures for the FY2025-26 financial year, as the underlying data is not currently available in a form that enables reliable financial measurement. SLC continues to work with third-party suppliers to improve data quality and processes, with the aim of enabling these disclosures to be reported in future years.

ICT and Digital

SLC Technology Group work with a Secure Recycling partner, CCL North, who collects IT equipment SLC no longer requires. Items are securely erased before refurbishing, reusing, or dismantling into components to maximise recycling ensuring nothing is sent to landfill. CCL North retain accreditations in quality management, environmental management, and information security management to ensure they are discharging their activities in a compliant manner.

	Unit	2017-18	2021-22	2022-23	2023-24	2024-25	2025-26
Non-recycled waste	Tonnes	176	153	224	87	36	39
Waste - recycled	Tonnes	176	153	132	111	74	163
Total waste	Tonnes	352	306	356	198	110	202
Total waste recycled	(%)	50	50	37	56	67	80
Total ICT waste recycled, reused and recovered (externally);	Tonnes	11	49	112	27	9	17
Total waste incinerated with energy recovery	Tonnes	165	104	112	87	36	39
Total waste incinerated without energy recovery	Tonnes	0	0	0	0	0	0
Total waste to landfill	Tonnes	0	0	0	0	0	0

Water, energy and paper consumption

In 2026, SLC printed 1.45 million sides of A4. We will focus on encouraging behavioural change by defaulting to double-sided printing, printing only when necessary, and using black and white as the standard print option.

Water consumption increased to 11,706m³ in 2025-26, compared with 6,036m³ in 2024-25. This was due to an irregularity in the Building Management System at 10 Clyde Place, which carried out excessive water flushing during the December 2025 and January 2026 holiday period. Outside this period, the system operated as expected.

	Unit	2017-18	2021-22	2022-23	2023-24	2024-25	2025-26
Paper	A4 reams equivalent	3,780	759	589	1,419	1,790	2,125
Water	Cubic meters (m³)	7,905	1,995	6,537	9,727	6,036	11,706
	£’000 *	110	12	15	34	19	13
Electricity	Megawatt-hours	3,920	5,222	5,551	5,174	4,108	3,526
	£’000	651	724	1,437	1,396	888	779
Gas	Megawatt-hours	3,258	6,339	3,942	2,747	1,527	0
	£’000	36	70	113	190	23	0
Diesel**	Megawatt-hours	39	25	23	16	12	0
	£’000	-	9	18	10	2	0
Total utilities	£’000	797	815	1,583	1,630	932	792

* Note: previous years water included wastewater cost.

** Note: the diesel referenced prior to FY2025-26 refers to fleet and generator combined. In Sept-Oct 2025 all generators had HVO replacement. All fleet has been fossil fuel free since Jan 2025.

Measures to reduce resource use are detailed in the Sustainability Strategy. The utilities consumed as part of hybrid working arrangements where staff work from home are not included here.

Energy consumption across SLC’s estate has decreased by 37.5% this year compared to 2024-25. The reduction in energy use is ultimately down to the removal of the gas supply from Memphis and Hillington and the move to 10 Clyde Place, which is not just a net zero new build, but also contributes to an Estate that has been downsized/rightsized in recent years.

Consumer Single Use Plastics (CSUPs)

CSUPs	2023/24	2024/25	2025/26	Target
Number of items	40	0	0	Reduce to zero

A re-use initiative to supply all employees with reusable cups has been implemented and in addition, no single use plastics are used in SLC catering facilities.

Office Usage

SLC employs staff in 4 locations with a total of 1,958 desks.

Sustainable Procurement

Sustainable Procurement means meeting organisational needs for goods, services and works in a way that delivers the life cycle value whilst benefitting the environment, society and economy.

SLC bases their approach on the Procurement Act 2023, where we must “have regard to the importance of maximising public benefit” (Section 12).

We consider how what is procured might improve the economic, social and environmental well-being of the relevant area:

• Environmental

  Achieving value for money over the life of a contract and, where legally possible, enabling local businesses and Small Medium Enterprises to participate in SLC procurement.

• Social

  Ensuring ethical supply chains, fair pricing and contract terms, and compliance with human rights and employment standards.

• Economic

  Minimising negative environmental impacts across the life cycle, from raw material extraction to end-of-life.

Our Approach

Around 90% of SLC expenditure is carried out via Crown Commercial Service (CCS) frameworks. Suppliers bidding for over threshold procurements must self-declare their compliance with the required standards for environmental, social and economic criteria using the Procurement Specific Questionnaire (PSQ). Specifications (where appropriate) would ensure compliance with the Government Buying Standards.

The social value element would be assessed with a minimum weighting of 10% within the technical evaluation, the suppliers offering would be monitored within the Contract Management phase, this process aligns with the requirements of the PPN 2025/002.

SLC commercial documents ensure social value is considered throughout the three-stage procurement process (Define, Procure and Manage) regardless of value, ensuring appropriate consideration and justification are recorded throughout.

SLC publish their Social Value KPIs for contracts over £5m.

SLC has a Sustainability Policy Statement which is shared with suppliers to support delivery of our sustainability objectives.

Standards, Assurance and Governance

Regular compliance checks at key procurement stages ensure adherence to relevant Procurement Policy Notes, including those on carbon reduction and social value.

Social Value training is delivered as a refresher to all Commercial staff annually.

SLC also has a sustainability group whose membership includes two Commercial staff.

Performance against key non-financial requirements

Supplier Payment Policy

SLC aims to comply with the Government’s Better Payment Practice Code for the prompt payment of Small and Medium size Enterprises (SMEs). 96% (2024-25: 96%) of all invoices were paid within the normal trading terms of 30 days, with 32% (2024-25: 39%) being paid within 5 days. In FY2025-26, 11% of all prompt payments were made to SMEs.

Modern Slavery Act

In line with section 54 of the Modern Slavery Act 2015, SLC is committed to the highest level of ethical standards and has a zero-tolerance policy towards modern slavery and human trafficking. The company is committed to acting ethically and with integrity in all business dealings and to taking steps to ensure that modern slavery and human trafficking do not exist in any part of the business or its supply chains, and to continually improving SLC’s practices to combat these crimes.

Overall, the nature of SLC’s business means that the risk of modern slavery and human trafficking in its directly managed business activities and the first line of its supply chain is considered to be relatively low. Nevertheless, the company continues to review its operations to identify areas where the risk could arise, and considers what policies and safeguards are in place to prevent this.

Statutory guidance states that organisations should publish their Modern Slavery Statement within six months of their financial year-end and accordingly SLC’s full statement for FY2024-25 was approved by the Board in July 2025 and then published online. It can be viewed at www.gov.uk/slc.

Anti-Fraud and Anti-Corruption

SLC is committed to combatting fraud and corruption in all its activities, consistent with SLC’s commitment to the Nolan Principles of Public Life. The company’s Internal and External Fraud Policies set out its overall position, with due regard to relevant law and guidance. SLC has a dedicated Economic Crime Unit (ECU).

In addition, the company maintains related policies, for example, in relation to Money Laundering, Whistleblowing and Gifts and Hospitality, supplemented by regular training for SLC employees. SLC’s Risk Director acts as the company’s Money Laundering Reporting Officer and the Company Secretary is SLC’s Whistleblowing Officer.

Declaration and Signature

This Strategic Report forms only part of the annual report and accounts that SLC publishes online at www.gov.uk/slc. Directors have had full regard to the considerations set out in Section 172 Companies Act 2006 when fulfilling their duty to promote the success of the company, these being:

• The likely consequences of any decision in the long term
• The interests of the company’s employees
• The need to foster the company’s business relationships with suppliers, customers and others
• The impact of the company’s operations on the community and the environment
• The desirability of the company maintaining a reputation for high standards of business conduct
• The need to act fairly as between members of the company.

This report was approved by SLC’s Main Board on 7 July 2026 and signed on the Board’s behalf by:

Chris Larmer
Chief Executive and Accounting Officer
10 July 2026

4. Accountability Report

4.1 Corporate Governance Report

As an Executive NDPB, SLC’s control framework is set out in the SLC Framework Document, drawn up by the DfE in consultation with SLC and the relevant departments of the Devolved Administrations. The Framework Document refers to the appropriate HMG guidance on corporate governance, including HM Treasury’s Managing Public Money. As defined within Managing Public Money and in the Accounting Officer (AO) Delegation Letter, the AO is charged with ensuring that SLC operates with propriety and regularity; maintaining a sound system of internal control that supports the achievement of SLC’s policies, aims and objectives; and regularly reviewing the effectiveness of that system. Throughout FY2025-26 SLC operated to the 2022 Framework Document.

SLC carries out periodic reviews to assess levels of compliance with the requirements as set out in the Framework Document, where any actions raised are tracked to closure.

SLC is bound by ‘Internal Control: Guidance for Directors on the Combined Code’ (the Turnbull guidance).

4.2 Directors’ Report

The Directors’ Report including Financial Statements for Student Loans Company Limited (SLC) is for the year ended 31 March 2026. The Financial Statements have been prepared in accordance with the Companies Act 2006 and, as appropriate, the FReM, and other guidance issued by HM Treasury and the Secretary of State for Education where the disclosure requirements of these go beyond the Companies Act. The Financial Statements have been prepared and approved by Directors in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the UK (Adopted IFRSs) and International Financial Reporting Interpretations Committee Interpretations.

SLC remains compliant with DfE, HM Treasury and Cabinet Office guidance at all times.

Principal Activities

The principal activities of SLC are noted within the Strategic Report.

Business Review

The business review is included within the Strategic Report.

Dividends

SLC has no accumulated reserves and accordingly the Directors do not recommend the payment of a dividend (2024-25: £nil).

Directors and their Interests

Directors

Non-Executive Board Members	From	To
Peter Lauener, Non-Executive Chair *	April 2020	March 2026
Gary Page, Non-Executive Director *	October 2020	October 2026
Charlotte Moar, Non-Executive Director	May 2019	May 2025
Stephen Tetlow, Non-Executive Director	May 2019	May 2025
Natasha Toothill, Non-Executive Director	April 2023	March 2029
Amanda Beech, Non-Executive Director	October 2024	September 2027
Stephen Marston, Non-Executive Director	October 2024	September 2027
Margaret Ollerenshaw, Non-Executive Director	October 2024	September 2027
Janette Campbell, Non-Executive Director	October 2024	September 2027

* Peter Lauener stepped down as Chair of the Board on 31 March 2026. Gary Page was appointed as Chair with effect from 1 April 2026.

Executive Board Members (Statutory Directors)	From	To
Chris Larmer, CEO	November 2022	Ongoing
David Wallace, Deputy CEO and Chief Customer Officer	January 2019	Ongoing
Audrey McColl, Chief Financial Officer	August 2021	Ongoing
Company Secretary	From	To
Gary Womersley	December 2015	Ongoing

The best interests of the company as a whole are paramount in decisions taken by the Board and the directors also recognise their collective responsibility to foster the company’s business relationships with suppliers and other stakeholders, through their decision making.

All non-executive Directors are considered to be independent. Details of any related parties are disclosed in note 19 of the Financial Statements.

No Director had any interest in the shares of SLC throughout either the year ended 31 March 2026 or 31 March 2025.

SLC is wholly owned by the Secretary of State for Education, the Welsh Ministers, the Scottish Ministers and the Minister for the Economy in Northern Ireland. All are entered as ‘Registrable Relevant Legal Entities’ in SLC’s Register of Persons with Significant Control.

The Chief Executive Officer is also the Accounting Officer for SLC.

Employees

SLC keeps employees informed about the business, its performance and specifically about those matters that affect them directly. The company has several regular digital communications including weekly all-staff newsletters, a weekly update from the CEO and further ad hoc communications as required. SLC regularly holds sessions where colleagues can put their questions directly to the Executive Leadership Team/ Senior Management Team (SMT). SLC frequently issues all-colleague emails and maintains an intranet site available to all colleagues.

SLC has a longstanding relationship with its recognised trade union, the Public and Commercial Services Union (PCS). SLC meets with PCS on at least a monthly basis to share information and consult with on issues including policies and changes to the business. SLC also has a wide range of colleague networks representing particular colleague interests or characteristics, but which all colleagues can join. These include a women’s development network, LGBTQ Network, Disability Network, Neurodiversity Network, Ethnicity Network, Carers Network, Menopause Network, Sustainability Network, Wellbeing Network and a Mental Health First Aid Network. SLC regularly engages with these networks to discuss and resolve concerns and to take account of their views in decision-making.

SLC is an Equal Opportunities Employer. More information is contained in the Remuneration and Staff Report.

SLC give full and fair consideration for the employment, retention, training and development for those with a disability through the application of the following.

• Recruitment and Selection Policy
• Flexible Working Policy and Procedure
• Equality Diversity and Inclusion Policy
• Employee Wellbeing Policy
• Apprenticeships Policy, Learning & Development Support Policy, Performance Development and Improvement Policy and Procedure

Whistleblowing

SLC has stringent whistleblowing processes and procedures in place.

SLC’s Whistleblowing Policy is reviewed on an annual basis, reported to ARC and is available to staff internally and is also published in the staff whistleblowing policy on GOV.UK. Whistleblowing is a key part of all staff inductions and all staff are reminded of the policy and undertake training on an annual basis. All staff are also able to contact SLC’s Whistleblowing Officer via a variety of channels, either directly or to a dedicated confidential email address and telephone number.

In FY2025-26 there were no formal matters raised with SLC’s Whistleblowing Officer by SLC staff. Two complaints have been raised with and investigated by the DfE - SLC’s Whistleblowing Officer has been liaising with DfE and assisting with both matters. At present, one investigation remains ongoing by DfE, with the position confirmed as no case to answer in respect of the other.

Ombudsmen Statement

Depending on which student finance funding authority customers have applied to, the Parliamentary and Health Services Ombudsman (PHSO), the Public Services Ombudsman for Wales (PSOW), the Northern Ireland Public Services Ombudsman (NIPSO) or the Scottish Public Services Ombudsman (SPSO) provide an opportunity for customers who are dissatisfied with the outcome of the SLC’s complaints or appeals processes (the final stage of which is an independent and impartial review by an Independent Assessor (IA)) to seek a review through referral by their MP.

Details of engagement are shown in the table below. The final four columns show the outcome of cases referred for further investigation.

Engagements with Ombudsmen in 2025-26	Open cases as at 1 April 2025	Cases Referred in year	No further investigation	Progressed to further investigation	Still Being considered as at 31 March 2026		Completed and not upheld	Completed complaint partially upheld	Upheld in full	Await outcome
PHSO	12	29	10	8	23		4	0	3	1
PSOW	1	10	6	0	5		0	0	0	0
NIPSO	0	0	0	0	0		0	0	0	0
SPSO	0	0	0	0	0		0	0	0	0
TOTAL	13	39	16	8	28		4	0	3	1

As at 31 March 2026, 28 cases remain open (1 being investigated and 27 awaiting outcome of initial consideration). As noted above, across the three complaints upheld, the Ombudsman made 7 recommendations all of which were complied with, none were not complied with.

Where a complaint was upheld in full or in part, the PHSO required SLC to take further steps in the form of setting out service improvements and/or offering a higher ex gratia or consolatory award than the IA had recommended.

SLC conducts a full lesson-learned exercise after each Ombudsman engagement in order to mitigate the risk of the recurrence of issues raised.

Information, Equipment and Personal Data Losses

In the year SLC reported one incident (compared to nine incidents in FY2024-25) to the Information Commissioner’s Office (ICO), with no further response/action(s) received. This incident related to suspected phishing attempts on various (<100) customer accounts.

SLC is predominantly compliant with UK GDPR and is working towards full compliance. We continue to engage with the ICO in respect of our approach to data retention, as we continue to invest in complying with UK GDPR through a multi-year Strategic Data Minimisation project.

During FY2025-26 four laptops were reported as lost and two as stolen. All devices are encrypted and carry no company data or personal information.

Environment, Sustainability and Corporate Responsibility

As previously noted, SLC has, in consultation with DfE, developed a Sustainability Strategy covering FY2026-27 to FY2030-31. The strategy sets out a clear vision for what SLC aims to achieve and explains how this aligns with the DfE strategy, Greening Government Commitments, and the United Nations Sustainable Development Goals. It also outlines the actions we will take to deliver this vision.

SLC continues to monitor its energy use, energy savings, and associated carbon emissions data. Energy consumption across SLC’s estate has decreased by 37.5% this year compared to 2024-2025. Details are provided above, in section 3.2.5.

Payment Practices Reporting

SLC, as an NDBP, has voluntarily reported on its payment practices and performance in accordance with the Reporting on Payment Practices and Performance Regulations 2017. The Company has complied with these requirements and has published its payment practices reports on the Government’s Payment Practices Reporting Service website.

SLC Board

The SLC Board is responsible for ensuring that effective corporate governance arrangements are in place that set out how SLC is directed and controlled and that assurance on risk management and internal control is provided.

The Board is required to demonstrate high standards of corporate governance at all times and to ensure that best practice is followed. The responsibilities of the Board are set out in the Governance Statement.

Remuneration

The remuneration for the Chair and Non-Executive Directors is determined by the Secretary of State for Education, the Welsh Ministers, the Scottish Ministers and the Minister for the Economy in Northern Ireland.

The remuneration of the CEO is determined by the Board, excluding the CEO, subject to approval by the Secretary of State for Education, the Welsh Ministers, the Scottish Ministers and the Minister for the Economy in Northern Ireland.

The method of appointment of the Non-Executive Directors is included in the Governance Statement. Details of the standing Committees of the Board can be found in the Governance Statement.

External Auditor

The Comptroller and Auditor General, the head of the NAO, has been reappointed for the financial year ended 31 March 2026.

Details of fees earned by the external auditor are provided in note 4 of the Financial Statements.

This report was approved by SLC’s Main Board on 7 July 2026 and signed on the Board’s behalf by:

Chris Larmer
Chief Executive and Accounting Officer
10 July 2026

4.3 Statement of Directors’ Responsibilities

The Directors who held office at the date of approval of the Directors’ Report confirm that, to the best of their knowledge, there is no relevant audit information of which SLC’s external auditor is unaware. Each Director has taken all appropriate steps to make themselves aware of any information relevant to the audit, and to establish that SLC’s external auditor is suitably informed.

Directors are responsible for preparing the Directors’ Report in accordance with applicable laws and regulations. Company law requires them to prepare Financial Statements for each financial year. Under the Framework Agreement, they are required to follow the principles of the FReM. Consequently, they have elected under the Companies Act to prepare the Financial Statements in accordance with and applicable law and to provide the additional disclosures required by the FReM where these go beyond the requirements of the Companies Act 2006. Under company law, Directors must not approve Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the net income/expenditure of the company for the year.

In preparing Financial Statements, Directors are required to:

• Select suitable accounting policies and then apply them consistently.
• Make judgements and estimates that are reasonable and prudent.
• State whether they have been prepared in accordance with IFRS as adopted by the UK.
• Prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

Directors are responsible for keeping adequate accounting records sufficient to show and explain the company’s transactions and disclose, with reasonable accuracy, at any time the financial position of the company, and that will enable them to ensure that the Financial Statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

The Directors have prepared a Remuneration and Staff Report, in order to comply with the requirements of the FReM and in accordance with Schedule 8 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 made under the Companies Act 2006, to the extent that they are relevant. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website.

Chris Larmer
Chief Executive Officer
10 July 2026

4.4 Statement of Accounting Officer’s Responsibilities

In preparing the accounts, I am required to comply with the FReM in addition to the Directors’ Responsibilities under the Companies Act 2006 and in particular to:

• Observe the Accounts Direction issued by DfE, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
• Make judgements and estimates on a reasonable basis; state whether applicable accounting standards as set out in the Companies Act 2006 and FReM have been followed, and disclose and explain any material departures in the Financial Statements
• Prepare the Financial Statements on a going concern basis; and
• Confirm that the Annual Report and Accounts as a whole is fair, balanced and understandable and take personal responsibility for the Annual Report and Accounts and the judgements required for determining that it is fair, balanced and understandable.

As Accounting Officer, I am responsible for ensuring;

• The propriety and regularity of financial transactions under my control;
• For keeping proper records and for safeguarding SLC’s assets;
• The economical, efficient, and effective use of resources placed at the Board’s disposal as set out in Managing Public Money published by HM Treasury; and
• Safeguarding the assets of the Board.

Chris Larmer
Chief Executive and Accounting Officer
10 July 2026

4.5 Governance Statement

As SLC’s Accounting Officer, I have personal responsibility for maintaining a sound system of governance, internal control and risk management that supports the achievement of SLC’s policies, aims and objectives while safeguarding public funds and assets. This is in accordance with the responsibilities assigned to me by the DfE, as described within the Framework Document, and in accordance with relevant HM Treasury guidance, in particular the FReM and Managing Public Money and the Corporate Governance in Central Government Departments Code of Good Practice.

I am personally accountable to the UK Parliament, via and alongside the DfE Principal Accounting Officer, and to the Devolved Parliaments and Administrations, via their Accounting Officers.

This Governance Statement provides information about SLC’s corporate governance, risk management and internal control arrangements which have been in place throughout the year. It also outlines issues that have arisen during this and previous years and the mitigations that have been put in place.

The Governance Framework

The Framework Document, which can be found at www.gov.uk/slc, provides comprehensive detail of the roles and responsibilities of Executives, Board members and Shareholders, as well as of the two standing Board Committees - the Audit and Risk Committee (ARC) and the Remuneration Committee (RemCo).

SLC’s Legal Status

SLC was incorporated in 1989 as a company limited by shares under the Companies Act and is wholly in public ownership - the UK’s four Government administrations are its shareholders and SLC is directly accountable to Ministers in the UK Government and in devolved administrations. Since April 1996 SLC has been classified as an executive NDPB.

Accountability to Government Shareholders

The Secretary of State for Education accounts for SLC’s business in the UK Parliament as the “Responsible Minister”. The DfE Minister with responsibility for Higher Education may also act on his or her behalf as the “Responsible Minister”. SLC is separately accountable to the Responsible Minister and to Devolved Administrations’ Ministers for performance in their respective jurisdictions. However, the Devolved Governments have agreed that DfE will act as the “Sponsor Department”, having the primary relationship with SLC, particularly in relation to corporate governance.

The Responsible Minister appoints the SLC Chair and Non-Executive Directors and determines their terms and conditions. Appointments are made for a period of three years and comply with the Cabinet Office Governance Code on Public Appointments. The Responsible Minister also approves the Board’s appointment of the Chief Executive.

The Permanent Secretary of DfE, as the Principal Accounting Officer of DfE, and acting on behalf of the Accounting Officers of the Devolved Administrations, has designated SLC’s Chief Executive Officer (CEO) as SLC’s Accounting Officer.

Shareholders and Assessors

The four Government Shareholders each appoint an Assessor who has the right to attend all main Board and Committee meetings on their behalf, and thus have access to SLC’s regular business, financial and internal control and risk reports. Shareholders’ key responsibilities include determining policy and maintaining the legislative framework for student support, providing a resource budget and Grant-in-Aid, and setting SLC’s functions, strategic focus and business objectives.

SLC’s Board

The Board operates in accordance with the Companies Act, and the Board responsibilities set out at section 8.2 of the Framework Document. In summary, its role is: to establish SLC’s strategic vision, mission and objectives and to monitor performance against these; to ensure that there is effective governance concerning the use of public money; to regularly review financial information and take assurance that appropriate action is taken over any concerns; and to appoint (with the responsible Minister’s approval) the CEO and set their objectives.

Non-Executive Directors of the Board are appointed by the Secretary of State for Education, from a variety of backgrounds based on their knowledge and experience gained in both the public and private sectors.

The Board is required to demonstrate high standards of corporate governance at all times and to ensure that best practice is followed.

Board Membership and Attendance Record 2025-26

	From	To	Attendance in 25-26
Peter Lauener, Non-Executive Chair	April 2020	March 2026	8/8
Gary Page, Non-Executive Director †	October 2020	March 2029	8/8
Charlotte Moar, Non-Executive Director	May 2019	May 2025	1/1
Stephen Tetlow, Non-Executive Director	May 2019	May 2025	1/1
Natasha Toothill, Non-Executive Director	April 2023	March 2029	8/8
Amanda Beech, Non-Executive Director	October 2024	September 2027	7/8
Stephen Marston, Non-Executive Director	October 2024	September 2027	8/8
Margaret Ollerenshaw, Non-Executive Director	October 2024	September 2027	8/8
Janette Campbell, Non-Executive Director	October 2024	October 2027*	8/8
Chris Larmer, CEO	November 2022	Ongoing	8/8
David Wallace, Deputy CEO and Chief Customer Officer	January 2019	Ongoing	8/8
Audrey McColl, CFO	August 2021	Ongoing	6/8
Gary Womersley, Company Secretary	December 2015	Ongoing	8/8

* Janette Campbell joined SLC at the end of October 2024 whilst the remaining cohort of new Non-Executive Directors joined at the start of October 2024.

† Gary Page was appointed as SLC Chair from 1 April 2026.

As scheduled, the Board held eight meetings during 2025-26; the table above shows how many of these each member attended (during 2025-26).

Matters considered by the Board

At each meeting, the Board reviewed and took assurance on SLC’s operational and financial performance and issues under management via the monthly CEO Report, Corporate Performance Dashboard and the CFO Report.

There was close monitoring of operational services and planning throughout the year, including application numbers, delivery capacity and customer satisfaction. The Board also received reports on the following key areas over the year: Policy, Data Strategy, Provider Performance, Customer Experience, Repayments, the Application Cycle, LLE and HE reforms, DSA Reforms, Complaints and Appeals and the Independent Assessors Report. In line with the Board’s terms of reference, it approved Risk Appetite and Risk Management, the Modern Slavery Statement and business planning. The Board held a strategy session in November 2025 where it considered future planning and SLC’s transformation plans under the Enable Programme. The Board’s awareness of key business areas and issues was further developed via ‘lean-in’ sessions ahead of each in person Board.

The Board took also assurance from Committee updates and minutes, reviewed their Terms of Reference and endorsed the SLC Code of Conduct for the Chair and Board members.

The Board reviewed arrangements for the coming financial year (2026-27), including an advanced draft of the company’s business plan and indicative budget and draft APRA performance measures and targets, provided by DfE on behalf of shareholders.

Board Effectiveness

In accordance with the Framework Document, an annual board effectiveness review commenced in June 2025, and the results were discussed with the Chairs of the Board and committees in July 2025. At the Chairs’ meeting areas for consideration were reviewed with the results informing the work of the Governance team throughout the year.

The Board was considered to be operating very effectively, with transparent decision-making and effective oversight. The review found that the Board had a clear understanding of SLC’s core objectives and strategy, with Non-Executive Directors adding valuable external perspectives, while relationships with key stakeholders were considered to be collaborative and collegiate. Large programmes were found to receive thorough attention, with Board oversight further benefiting from well-functioning sub-committees.

New SLC Chair

In February 2026 Gary Page, SLC Non-Executive Director, was confirmed as the new SLC Chair with effect from 1 April 2026. The Chair was appointed following a robust recruitment process, with final approval from the Secretary of State for Education. The Chair is required to complete a thorough induction programme, including meetings with SLC, DfE and Devolved Administration senior leaders, topic specific inductions and visits to SLC’s Glasgow, Darlington, and Llandudno offices.

The Audit and Risk Committee (ARC)

ARC is a standing committee of the Board. The Board established ARC to provide it and the Accounting Officer with assurance on the operation of SLC’s internal risk and control systems, to oversee the provision of internal and external audit services, and to provide assurance on the adequacy of SLC’s corporate governance arrangements.

The Board determines the membership and Terms of Reference of ARC. Assessors, representing the shareholders, have the right to attend all committee meetings.

Members are independent of management and free of any business or other relationships (including cross Directorships or day-to-day involvement in the management of the business) which could interfere with the exercise of their independent judgement.

Committee meetings will normally be attended by the CEO, Deputy CEO, CFO and Company Secretary. The Board has a Chartered Accountant as an independent external member of ARC.

The Chair of the committee reports to the Board after each meeting and the minutes of committee meetings are provided to Board members for information. Executive Directors, the Company Secretary, the Head of Internal Audit and the representative of External Audit have free and confidential access to the Chair of the Committee.

ARC Membership and Attendance Record

	From	To	Attendance in 25-26
Janette Campbell, Non-Executive Director, ARC Chair*	November 2024	October 2027	5/5
Gary Page, Non-Executive Director	November 2020	March 2026	5/5
Stephen Marston, Non-Executive Director	November 2024	October 2027	5/5
Donall Curtin, Independent External Member	January 2023	December 2026	5/5

* Janette Campbell was announced as ARC Chair with effect from May 2025, replacing Charlotte Moar, with the first ARC meeting of 2025-26 held in May 2025.

During the year Peter Lauener, the Chair of the main Board, had a standing invitation to attend this Committee, although he was not a member.

As scheduled, ARC held five meetings during 2025-26; the table above shows how many of these each member attended.

Matters considered by ARC

The committee regularly reviewed key risks and issues, internal audit progress and ARC assurance reports throughout the year. The committee took assurance on how SLC was managing a range of matters including cyber security, people matters, customer matters, financial crime prevention, information security, disaster recovery, business continuity, health and safety, and commercial governance.

Additionally, it fulfilled its role in reviewing:

• The Annual Report and Accounts for FY2024-25, which was recommended by ARC for approval by the Board.
• The plan for the Annual Report and Accounts for FY2025-26, incorporating SLC’s accounting policies.
• The external audit strategy, and interim reports and fees for FY2025-26.
• Internal audit work undertaken during FY2025-26.
• The internal audit plan for FY2026-27.
• The annual review of Risk, relating to the previous financial year.

The Remuneration Committee (RemCo)

RemCo is a standing committee of the Board. Members of the committee are appointed by the Board.

The Board determines the membership and Terms of Reference of RemCo. Assessors, representing the shareholders, have the right to attend all committee meetings.

Members are independent of management and free of any business or other relationships (including cross directorships or day-to-day involvement in the management of the business) which could interfere with the exercise of their independent judgement.

The Chair of the committee reports to the Board after each meeting and the minutes of committee meetings are provided to Board members for information.

Committee meetings are attended by the CEO, the Deputy CEO, and the Executive Director, People and Company Secretary, except where the Committee is in closed session and, for example, conducting the annual performance review of the CEO. For further information, refer to the Remuneration and Staff Report.

RemCo Membership and Attendance Record

	From	To	Attendance in 2025-26
Gary Page, Non-Executive Director, Chair*	July 2021	March 2026	4/4
Margaret Ollerenshaw, Non-Executive Director**	November 2024	September 2027	4/4
Natasha Toothill, Non-Executive Director	May 2025	March 2029	4/4

During the year Peter Lauener, the Chair of the main Board, had a standing invitation to attend this Committee, although he was not a member.

* Gary Page ceased being RemCo Chair at the end of March 2026 following his new appointment as SLC Chair. He will provide interim cover here as required to ensure the committee remains quorate.

** Margaret Ollerenshaw was announced as the RemCo Chair with effect from April 2026, replacing Gary Page.

As scheduled, RemCo held four meetings during 2025-26; the table above shows how many of these each member attended (during the period of their membership). Outwith the three scheduled meetings one extra meeting was convened to discuss and approve Executive and Senior Managers’ pay, whilst review and approval of Executive recruitment was completed by correspondence.

Matters considered by RemCo

In accordance with its Terms of Reference, the committee met in closed sessions to approve the CEO objectives and performance as proposed by the SLC Chair, and the ELT objectives and performance as proposed by the CEO.

In 2025-26, RemCo supported the appointment of the new Chief Digital and Data Officer. RemCo considered the People Strategy at each of its meetings, reviewing updates on key strands of activity including, Pay, Employee Engagement and Strategic Workforce Planning.

The committee reviewed SLC’s Gender Pay Gap and EDI Reports, supporting SLC’s aim to close the gender pay gap and increase diversity.

The Transformation Oversight Committee (TOC)

As set out in the Framework Document, the Board may establish committees as required. The Board established a Technology and Evolve Oversight Committee (TEOC) in July 2019 as a Committee of the main Board. Over the course of 2023-24, with the formal close-down of the Evolve Programme, TEOC transitioned to become the Transformation Oversight Committee (TOC). In 2025-26, TOC supported the Board in its responsibilities, in preparation for overseeing SLC’s transformation activity, focusing on Programme Enable. The Committee also provided insight and took assurance on progress of the delivery of the Lifelong Learning Entitlement.

The Board determines the membership and Terms of Reference of TOC. Assessors, representing the shareholders, have the right to attend all Committee meetings.

The Chair of the committee reports to the Board after each meeting and the minutes of committee meetings are provided to Board members for information.

Committee meetings will normally be attended by the CEO, Deputy CEO, CFO, CIO, Executive Director of Change, Data and Repayments, and the Executive Director of HE and FE Reform.

TEOC and TOC Membership and Attendance Record

	From	To	Attendance in 2025-26
Natasha Toothill, Non-Executive Director, Chair †	April 2023	March 2029	4/4
Amanda Beech, Non-Executive Director	November 2024	September 2027	3/4
Joanna Davinson, Independent Advisor *	September 2023	November 2025	3/3

Peter Lauener, the Chair of the main board, had a standing invitation to attend this Committee, although he was not a member.

† Natasha Toothill was announced as the TOC Chair with effect from May 2025, replacing Stephen Tetlow, with the first TOC meeting of 2025-26 held in June 2025.

* Joanna Davinson left SLC in November 2025.

TOC held four meetings during 2025-26; the table above shows how many of these each member attended.

Matters considered by TOC

The TOC agenda covered the following items:

• The progress and delivery of LLE as an SLC Programme
• The development of the Enable Programme and Business Case.
• The delivery of the Digital Student Finance System.

Register of Interests

All Non-Executive Directors and members of the ELT are required to declare any outside interests. They are required to take due care to avoid conflict between their own and SLC interests. Related Party disclosures, as per IAS 24, are included within note 19 to the Financial Statements. A Register of Interests is available upon request.

The Executive Leadership Team (ELT)

The ELT is responsible for the day-to-day management of the company. ELT controls and monitors SLC’s operational and financial management, sets SLC’s business priorities and objectives in line with strategies set out by the Board and shareholders, and oversees SLC’s capacity and capability to deliver within available resources. Each Executive Director is supported by a team of senior managers, who collectively make up the company’s Senior Management Team (SMT).

ELT Membership 2025-26

Role	Name	Period
Chief Executive Officer	Chris Larmer	Throughout Year
Deputy CEO and Executive Director: Corporate Services	David Wallace	Throughout Year
Chief Financial Officer	Audrey McColl	Throughout Year
Chief Information Officer	Jason Dunham	Throughout Year
Chief Digital and Data Officer	Kath Moore	Since March 2026
Executive Director: Customer Operations	Jacqueline Currie	Throughout Year
Executive Director: Change and Data	Nauman Dar	Throughout Year
Executive Director: HE/FE Reform	Derek Ross	Throughout Year
Executive Director: People	Gillian Brydie	Throughout Year

Risk Management Arrangements

SLC continued to mature its approach to risk management and compliance throughout 2025-26. The system of internal control is based on processes that identify, prioritise and manage the principal risks facing the organisation.

Enterprise Risk and Compliance Framework

The SLC operates an enterprise-wide approach to risk management via a three lines of defence (3LoD) model. This approach is designed to encourage consistency across and between risk management systems, as recommended within HM Treasury’s Orange Book. The First Line of Defence (1LoD) owns risks and controls, and are responsible for identifying, owning and managing compliance obligations. The Second Line of Defence (2LoD), via a series of Risk Category Owners (RCOs), sets internal policy and control expectations whilst monitoring and facilitating the implementation of effective risk management and compliance practices. The Third Line of Defence provides independent assurance, currently undertaken by GIAA.

The SLC Risk & Compliance (the Policy) and SLC Risk Appetite Policies define roles and responsibilities across the organisation and are supported by additional underlying Standards and Guidance documents. Risk Appetite is defined by RCOs for each risk category; these statements are combined to provide an overall SLC position and approved at ARC and Board. This provides the framework to make risk based informed decisions within defined tolerances.

A defined risk reporting hierarchy exists to ensure a consistent approach to the identification, reporting and escalation of SLC’s most significant risks, detailing how risk information aggregates from Risk and Control Assessments (RCA) to SLC’s principle (corporate) risks and Risk Appetite Dashboard. SLC utilise a Governance Risk and Compliance (GRC) tool to manage risk management processes and maintain the overall system of risk management. The GRC tool is an integrated system to manage and exploit relationships between risks, controls, risk events and audit actions, providing a single data source to report on key risk management information in real time.

Modernising Risk Management Practices

• Aligned to the Policy, a formal approach to risk horizon scanning has now been developed and launched. This includes a comparison between SLC’s top risks and those compiled by the Operational Riskdata eXchange (ORX), the largest operational risk management association in the financial services sector. This serves to benchmark and challenge the SLC position. In addition, this was used to inform a Board Strategy Away Day, to consider, discuss and validate or challenge the current risk profile. The activity was designed to overlay the views of Board members and utilise available expertise to ensure fully reflect risks faced by SLC.
• An internal audit review was completed in the period, assessing the design and effectiveness of SLC’s Three Lines of Assurance model and the extent to which the supporting internal standards reflected recognised good practice. GIAA found that the SLC model aligns with the ‘upper quartile’ of public sector organisations and represents a well-designed framework, with strong governance and a mature use of data, tools and reporting to monitor risks and controls.
• Work to enable the transition of the Risk Event Process to the GRC tool concluded in the year. Benefits associated with a central data repository and process management tool can now be realised, including a holistic and consistent approach to the escalation, oversight and management of the most significant issues. In parallel, the opportunity was taken, following review and feedback, to rename the process from Issue Management Process to the Risk Event Process, better focusing on the need to report and oversee crystallised risks with tangible impacts to SLC.

Creating a Culture of Compliance via the Assurance Framework

• The annual review of the Assurance Map, to validate the sufficiency of assurance position across all risk categories and lines of defence, commenced in-year. This structured means of identifying and mapping sources of assurance will present a clear visual summary of the risk and control environment, helping to identify assurance gaps and improve corporate reporting. In addition, the Assurance Map will be utilised to support the production of the assurance reporting plan, focused on areas where additional assurance is required to streamline and concentrate on the most material areas.
• In line with central government requirements and to support the Annual Reports and Accounts (ARA), the ERC Team performs an annual assessment on SLC’s level of compliance with the mandatory elements of the Government Functional Standards (GFS). This year’s assessment found SLC to be largely compliant with a marginal increase overall. For areas of partial and non-compliance, corresponding action plans are in place.

Assurance Framework

Strengthening the three lines of defence

• Risk management objectives for all staff, including SMT and ELT, were augmented in FY2025-26 to include newly established measures and metrics to track Policy adherence and adoption. This further enhances the adoption of a data driven approach to risk management oversight with the GRC tool providing a central source of risk management data.
• SLC has now identified and agreed a set of five core skills critical to the delivery and success of SLC’s core purpose. Risk features prominently as one of the core skills and a subsequent review of current skill levels across all staff within SLC has now been completed. This will be leveraged to determine the scope of risk training material and support required to enhance and maintain levels of risk knowledge, including a suite of risk specific learning material.
• To further enhance and leverage risk as one of SLC’s core skills, revised mandatory risk management training was also designed and relaunched. The opportunity has been taken to streamline content from three individual modules to just one, providing all staff with the fundamental knowledge to identify risk and engage with the key concepts in the Policy. This will now feature as part of an updated suite of revised mandatory learning with enhanced functionality overall to improve efficiency and effectiveness.

Developments in risk management arrangements and the company’s risk profile are presented regularly to the SLC Executive Risk Forum (ERF) and the SLC Audit and Risk Committee (ARC).

Key Risks in 2025-26

The key risks under consideration during the year were:

• The ongoing resilience and performance of legacy systems and software ahead of the development, approval and commencement of Programme Enable.
• Cyber security due to the aged nature and complexity of current systems coupled with the need to ensure approach keeps pace with a continually evolving threat environment.
• Information and data handling due to the nature of SLC’s operations, the scale and complexity of the legacy IT environment and the pervasiveness of personal data within SLC.
• The aggregated operational impact of key risks on the company’s ability to deliver complex policy requests, using sub optimal business processes with pressurised budgets.

In addition, SLC continued to support the various DfE initiatives to reduce fraud risk in the student finance system.

These are referred to in more detail in section 3.1 - About SLC.

Emerging Risks

Emerging risks continue to be anticipated and monitored within SLC and remain closely connected to the legacy nature of systems and the increasingly complex and diverging policy requirements from Shareholders. Protection of customer and shareholder interests remained the priority throughout a year of largely flat cash funding as the required activity to address underlying structural risk progressed via the Enable Programme Business Case (PBC).

Sustainability Board

The SLC’s Sustainability Board was introduced in FY2024-25 and exists to identify any emerging climate related risks and opportunities within the business for escalation to Risk and Compliance colleagues, and to generate initiatives that will improve sustainability performance across all directorates. It is comprised of colleagues from across the business, and colleagues from our Green Matters colleague network and led by SLCs Head of Estates and Business Continuity and the SLC Sustainability Manager.

Internal Audit Opinion

Based on the evidence reviewed, GIAA has concluded that overall, SLC has maintained a broadly sound system of governance, internal control and risk management but there is scope for improvement. This is reflected in the overall level of assurance which is ‘Moderate’ - some improvements are required to enhance the adequacy and effectiveness of the framework of governance, risk management and control. Against this background, GIAA has also concluded that there has been a steady improvement over the last few years and, notably, in the control environment in FY2025-26.

Notable highlights from internal audits carried out during the year include improved levels of apply-to-payment accuracy, board governance and effectiveness, the accurate calculation of interest on loan balances, payroll changes, Procurement Act compliance, workforce planning data and improved project management processes. Moreover, work progressed well to close known control weaknesses identified in previous internal audits, with a significant number of higher priority recommendations closed in the year. However, whilst the interest calculation has been verified at a very high level of accuracy, further work is required to strengthen the related first and second lines of assurance and clarify assurance responsibilities where other organisations contribute to the delivery of SLC services.

Review of Effectiveness

As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of internal control, and I take personal responsibility in this Governance Statement for the financial year FY2025-26.

My review of the effectiveness of the system of governance, internal control, and risk management, which has been in place in SLC throughout the year ended 31 March 2026, and up to the date of approval of the Annual Report and Accounts, is informed by:

• My ELT, who have each provided assurance on the effectiveness of controls they have in place over the activities where they have delegated responsibility.
• The work of my Enterprise Risk and Compliance team, providing ‘second line assurance’ and supporting the continuous improvement of our risk management, governance, and control across the company. This includes an annual assessment of SLC’s level of compliance with the mandatory elements of the Government Functional Standards (GFS).
• Control functions providing robust ‘first line assurance’ over each directorate risk profile.
• The work of our ‘third line assurance function (GIAA), who review all material risks and business areas.
• Comments made by the External Auditors in their management letter and other reports.

Risk management practices comply with the requirements of the Orange Book’s Five Principles, and the framework continues to drive strategy and risk-based decision-making across SLC.

As with any complex business, SLC manages a range of risks and our framework is designed to mitigate exposure to a reasonable level, rather than eliminate all risk in the pursuit of achieving policy and business objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness.

Conclusion

I have considered the evidence available to me with regard to the production of the annual Governance Statement and conclude that SLC maintains a sound system of governance, risk management, and internal control.

Chris Larmer
Chief Executive and Accounting Officer
10 July 2026

4.6 Remuneration and Staff Report

Remuneration Report

The Remuneration Report sets out the remuneration of all members of the Executive Leadership Team (ELT), including Statutory Directors, Executive and Interim Directors. It also includes Non-Executives Directors, together with details of the Remuneration policy for the year.

This report is prepared in accordance with the Companies Act 2006, the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and includes any additional disclosures required by the Financial Reporting Manual.

Remuneration Committee

The Terms of Reference, the committee’s membership, and the matters it considered are detailed in Section 4.4 of the Governance Statement.

Remuneration Policy

SLC aims that the remuneration packages offered to the ELT:

• Enables SLC to attract, retain and motivate high calibre executives.
• Remunerates individuals fairly for individual responsibility and contribution, while providing an element of performance related pay reflecting the individual performance of each ELT member, having regard to public sector pay guidance/restrictions.
• Take account of salary policy within the rest of SLC and the relationship that should exist between the remuneration of the ELT and that of other employees.

As a NDPB, SLC’s Senior Civil Service (SCS) equivalent graded staff are not Civil Servants and therefore not in scope of the Senior Salaries Review Body’s remit. Nevertheless, SLC recognises the importance of public sector pay policy. Therefore, any annual pay increase or decision to award performance-related pay to SLC’s SCS equivalent staff is considered alongside and according to the same general principles that apply to SCS.

SLC aims to review ELT pay annually, in line with the SCS pay guidance.

The notice period for ELT members who are permanent employees is six months, and they are on standard SLC contracts of employment.

Non-Executive Remuneration

Remuneration of the Non-Executive Directors (including the Chair of the Committee) is set for their three-year term of appointment by the Secretary of State for Education, the Welsh Ministers, the Scottish Ministers and the Minister for the Economy in Northern Ireland or their delegated representative(s). Additional responsibilities may attract further remuneration.

Pensions

Prior to 1 March 2020, SLC operated the Student Loans Company Limited Retirement and Death Benefits Scheme (SLC Pension Scheme) which was a defined benefit scheme and NOW: Pensions, a defined contribution scheme, which met SLC’s statutory obligations to enrol all employees in a pension scheme.

SLC, since March 2020 has been an affiliated employer of the Civil Service Pension Arrangements (CSPA) and made the alpha and partnership schemes available to all its employees. New employees are automatically enrolled into the CSPA, with the choice to join either the alpha or partnership scheme. Alternatively, they may opt to remain a non-pension member until the next re-enrolment date, at which point they would be auto enrolled into the alpha scheme.

No ELT members retain pension benefits in the previous SLC Pension Scheme.

Details of the Civil Service scheme can be found at www.civilservicepensionscheme.org.uk.

Performance Related Payments

Each member of the ELT has personal performance objectives, including specific targets which have a significant impact on the performance of the organisation. These targets and the CEO’s appraisal of their performance against them are subject to review by RemCo. Subject to RemCo approval, members of the ELT who are permanent staff are eligible to participate in SLC’s performance related payment scheme.

SLC’s Chair reviews the performance of the CEO and based on delivery against agreed objectives, may propose an award for consideration by the RemCo. The terms of the CEO’s appointment provide for a performance related payment to a maximum value of £20,000 per annum.

In 2025-26, SLC made a company-wide payment to all staff excluding ELT in recognition of strong organisational performance in FY2024-25 and collective delivery against colleague, customer and stakeholder priorities.

Performance-related payments are not awarded to Non-Executive Directors.

Other Benefits and Expenses

SLC meets normal allowable costs for Board Directors and members of ELT in accordance with SLC’s standard expenses, travel and accommodation policy.

Non-Executive Directors and Executive Leadership Team Salary and Pension Information (subject to audit)

Remuneration of Board Members

There were no redundancy payments to members of the Board for loss of office made during the year (2024-25: £nil), Non-Exec members of the Board are not entitled to redundancy under the conditions of their tenure.

Fees Paid to Chair and Non-Executive Directors

	2025-26 Remuneration £’000	2024-25 Remuneration £’000
Peter Lauener	50-55	50-55
Charlotte Moar (to 06/05/25)	0-5 (15-20)*	15-20
Stephen Tetlow (to 06/05/25)	0-5 (15-20)*	15-20
Gary Page	15-20	15-20
Natasha Toothill	15-20	15-20
Margaret Ollerenshaw	15-20	5-10 (15-20)*
Stephen Marston	15-20	5-10 (15-20)*
Amanda Beech	15-20	5-10 (15-20)*
Janette Campbell	15-20	5-10 (15-20)*

* Denotes the Full Year Equivalent salaries for those Non-Executive Directors who were not in post/position was not held for the full financial year.

** The figures above are for salaries and allowances only. There are no performance pay, bonuses, non-cash benefits or accrued pension benefits to disclose.

Remuneration of ELT

The ELT is responsible for the day-to-day management and leadership of SLC’s activities and operations. The Governance Statement notes the areas of responsibility for each member of ELT.

There were no redundancy payments to members of the ELT for loss of office made during the year (2024-25: £nil).

Remuneration of ELT 2025-26

Name	Position	2025-26 Remuneration £’000	2025-26 Other Taxable Benefits and Expenses (to the nearest £100)	2025-26 Accrued Performance Related Pay £’000**	2025-26 Employer Pension Contribution (nearest £1,000) £’000	2025-26 Total Remuneration £’000
Chris Larmer*	Chief Executive	200-205	-	15-20	59	280-285
David Wallace*	Deputy Chief Executive	105-110¹ (160-165)²	-	5-10	31	145-150
Audrey McColl*	Chief Financial Officer	155-160	-	5-10	46	210-215
Jason Dunham	Chief Information Officer	155-160	-	5-10	46	210-215
Gillian Brydie	Executive Director	145-150	-	5-10	43	200-205
Derek Ross	Executive Director	145-150	0.3³	0-5	42	190-195
Jacqueline Currie	Executive Director	145-150	-	5-10	42	195-200
Nauman Dar	Executive Director	145-150		5-10	41	190-195
Kath Moore (from 2 March 2026)	Chief Digital and Data Officer	10-15 (145-150)²			4	15-20

* Denotes that the individual is a statutory SLC Board Member under the Companies Act 2006.

** Accrued performance pay is shown in bands of £5,000.

1. The Deputy Chief Executive reduced their working hours from 1.0 FTE to 0.6 FTE with effect from 1 June 2025, resulting in a pro-rata reduction in remuneration for the year.
2. Denotes the Full Year Equivalent salaries for those members of ELT who were not in post/position was not held for the full financial year, including adjustment for individuals who reduced their working hours during the year.
3. Represents benefit in kind expenses.

Remuneration of ELT 2024-25

Name	Position	2024-25 Remuneration £’000	2024-25 Other Taxable Benefits and Expenses (to the nearest £100)	2024-25 Accrued Performance Related Pay £’000**	2024-25 Employer Pension Contribution (nearest £1,000) £’000	2024-25 Total Remuneration £’000
Chris Larmer*	Chief Executive	190-195	-	15-20	56	270-275
David Wallace*	Deputy Chief Executive	155-160	-	5-10	45	210-215
Audrey McColl*	Chief Financial Officer	145-150	-	5-10	42	195-200
Jason Dunham	Chief Information Officer	150-155	-	5-10	44	200-205
Gillian Brydie	Executive Director	140-145	-	5-10	42	190-195
Derek Ross	Executive Director	140-145	1.0²	0-5	41	180-185
Jacqueline Currie	Executive Director	140-145	-	5-10	41	185-190
Nauman Dar (from 5 August 2024)	Executive Director	90-95 (140-145)¹		0-5	27	120-125
David Beattie (to 7 June 2024)	Executive Director	25-30 (145-150)¹	-	n/a	8	35-40

* Denotes that the individual is a statutory SLC Board Member under the Companies Act 2006.

** Accrued performance pay is shown in bands of £5,000.

1. Denotes the Full Year Equivalent salaries for those members of ELT who were not in post/position was not held for the full financial year.
2. Represents benefit in kind expenses.

Retirement Benefits for the ELT

	Accrued pension and related lump sum at pension age as at 31 March 2026 £’000	Real increase in accrued pension and related lump sum at pension age during the year to 31 March 2026 £’000	CETV as at 31 March 2026 (to nearest £1,000) * £’000	CETV as at 31 March 2025 (to nearest £1,000) * £’000	Real increase in CETV (to nearest £1,000) * £’000
Chris Larmer	20-25	2.5-5	328	249	56
David Wallace	45-50	0-2.5	905	862	8
Audrey McColl	15-20	2.5-5	263	198	45
Jason Dunham	10-15	2.5-5	161	104	42
Gillian Brydie	5-10	2.5-5	128	78	37
Derek Ross	70-75	0-2.5	1,431	1,399	3
Jacqueline Currie	15-20	2.5-5	243	189	38
Nauman Dar	5-10	2.5-5	67	27	29
Kath Moore (from 2 March 2026) **	-	-	-	-	-

(i) * Cash Equivalent Transfer Values (CETV) have been calculated in accordance with the Occupational Pension Schemes (Transfer Values) Regulations 1996, depending upon length of membership of the SLC Pension Scheme, and figures have been rounded.

(ii) Accrued pension benefits included in this table for any individual affected by the Public Service Pensions Remedy have been calculated based on their inclusion in the legacy scheme for the period between 1 April 2015 and 31 March 2022, following the McCloud judgement. The Public Service Pensions Remedy applies to individuals that were members, or eligible to be members, of a public service pension scheme on 31 March 2012 and were members of a public service pension scheme between 1 April 2015 and 31 March 2022. The basis for the calculation reflects the legal position that impacted members have been rolled back into the relevant legacy scheme for the remedy period and that this will apply unless the member actively exercises their entitlement on retirement to decide instead to receive benefits calculated under the terms of the Alpha scheme for the period from 1 April 2015 to 31 March 2022.

(iii) ** CETV figures are provided by Capita based on data as at November. As this data cut-off precedes Kath Moore’s appointment, no CETV information is available for disclosure.

Staff Report

Median and Fair Pay (audited)

Reporting bodies are required to disclose the relationship between the remuneration, including bonus paid during the year, of the highest-paid Director in their organisation and the lower quartile, median and upper quartile remuneration of the organisation’s workforce.

SLC’s highest-paid director in the financial year 2025-26 was the CEO.

The ratios for the year remain largely consistent with the prior period. This stability reflects the impact of the final part of SLC’s pay case; and the consistent application of the 2025-26 pay remits at all grades, reflecting that salaries and policies have been consistent across both financial periods.

Pay Ratios of Highest Paid Director (audited)

Year	25th percentile pay ratio	Median pay ratio	75th percentile pay ratio
2025-26	8.6:1	8.0:1	5.4:1
2024-25	8.8:1	8.0:1	5.6:1

The remuneration and salary cost information used to calculate the above ratios are shown below.

Remuneration and Salary Information used to calculate pay ratios (audited)

	2025-26 Total Pay and Benefits	2025-26 Salary Component	2024-25 Total Pay and Benefits	2024-25 Salary Component
25th percentile	25,765	24,857	24,075	23,525
Median	27,684	26,366	26,536	25,857
75th percentile	40,966	38,973	38,225	37,135

The percentage change in the remuneration of the highest-paid Director and of the employees of SLC taken as a whole are shown in the tables below.

Percentage change of salaries and allowances and performance related pay and bonuses of the highest paid Director and all employees (excluding the highest paid Director) (audited)

	Highest Paid Director	All employees (excluding highest paid Director)
	2025-26	2025-26
Salary and allowances	5.2%	5.0%
Performance pay and bonuses	0%	69.8%

Performance pay figures are not known at the end of the financial year therefore actual amounts paid are used to ensure comparability. As a result, the table above and the fair pay workings relate include payments made in 2025-26 but which relate to FY2024-25 performance.

Salary and allowances: The highest-paid director’s salary and allowances increased by 5.2%, whereas the broader employee group saw a slightly lower increase of 5.0%. The increases are driven primarily by the annual pay remit uplift implemented in October 2025 (£5m), higher employer National Insurance contributions from April 2025 (£3m), and the introduction of a new company-wide performance related pay scheme made to staff, excluding the Executive Leadership Team (£1m).

The performance bonuses for the CEO and Executive Leadership Team are agreed by the Remuneration Committee of SLC’s Board. Pay adjustments for the CEO and SCS-equivalent staff are made in alignment with the SCS Pay Framework, which follows the recommendations of the Senior Salaries Review Body (SSRB).

During 2025-26, remuneration for permanent members of staff ranged as follows:

	2026	2025
Range of lowest scale remuneration	£20,000-£25,000	£20,000-£25,000
Range of highest scale remuneration	£220,000-£225,000	£210,000-£215,000

No employees were paid more than the highest paid director. The remuneration for the entire ELT, excluding performance-related pay was £1.2m (2024-25: £1.2m).

Total remuneration includes salary, non-consolidated performance related pay and benefits-in kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

Staff Numbers and Remuneration (audited)

The monthly average number of full-time equivalent persons employed during the year is shown in the table below.

Average number of persons employed (FTE) (audited)

	2025-26	2025-26	2024-25	2024-25
	Permanent staff	Other	Permanent staff	Other
Directly employed	3,093	4	3,146	3

The table below represents the average headcount of employees. SLC’s Senior Management Team and Executive Leadership Team are Senior Civil Service (SCS) equivalent roles.

Staff Numbers by grade and gender for the year to 31 March 2026 (unaudited)

	Male	Female	Total
Executive Leadership Team	5	3	8
Senior Management Team	21	11	32
All other employees	1,487	1,703	3,190
Total	1,513	1,717	3,230

Staff Numbers by grade and gender for the year to 31 March 2025 (unaudited)

	Male	Female	Total
Executive Leadership Team	5	3	8
Senior Management Team	23	14	37
All other employees	1,515	1,724	3,239
Total	1,543	1,741	3,284

There has been a decrease of 1.6% in average staff numbers since last year - from 3,284 to 3,230.

Wages and salaries (audited)

‘Permanent staff’ in the tables below includes all staff with an employment contract with SLC and those employees on fixed term contracts. ‘Agency costs’ incorporates agency staff who are fulfilling a permanent role within the structure; these short-term roles support requirements such as unexpected absences, short term peaks in workload, short term projects or gaps between filling permanent vacancies.

	2025-26 Permanent Staff £’000	2025-26 Agency Costs £’000	2025-26 Total Remuneration £’000
Wages and salaries	111,493	619	112,112
National Insurance costs	14,355	-	14,355
Employer Pension costs	27,291	-	27,291
Capitalised Staff costs	(3,502)		(3,502)
Direct staff costs	149,637	619	150,256
Indirect staff costs*	1,460	-	1,460
Total staff costs	151,097	619	151,716

* Indirect staff costs relate to the apprenticeship levy and health insurance premiums.

	2024-25 Permanent Staff £’000	2024-25 Agency Costs £’000	2024-25 Total Remuneration £’000
Wages and salaries	109,151	335	109,486
National Insurance costs	11,040	-	11,040
Employer Pension costs	25,543	-	25,543
Capitalised Staff costs	(5,385)		(5,385)
Direct staff costs	140,349	335	140,684
Indirect staff costs*	1,104	-	1,104
Total staff costs	141,453	335	141,788

* Indirect staff costs relate to the apprenticeship levy and health insurance premiums.

Staff costs for permanent staff increased by £9.6m (6.8%). This increase was primarily driven by £3m relating to the full year impact of the FY2024-25 pay remit and £2m relating to the part year impact of the pay remit uplift implemented in October 2025. In addition, the UK increase in higher employer National Insurance contributions from April 2025 resulted in an increase (£3m), and there was the introduction of a new company wide performance related pay scheme (£1m) made to staff, excluding ELT, this bonus related to performance in FY2024-25 but was paid in FY2025-26.

Capitalised staff costs decreased from £5.4m in 2024-25 to £3.5m in 2025-26. This reflects a 35% decrease and is attributable to an ongoing reduction in capitalisation of projects due to increased usage of Software and Platform as a service.

SLC did not incur consultancy expenditure.

Severance Payments (audited)

SLC made one severance payment, which was agreed with the Cabinet Office.

Number of Severance Payments

Payment Band	2025-26	2024-25
£< £10,000	1	2
£10,001 - £25,000	-	3
£25,001 - £50,000	-	2
£50,001 - £75,000	-	2
£75,001 - £100,000	-	4
£100,001 - £150,000	-	5
£150,001 - £200,000	-	1
Total	1	19

Alongside one severance payment, payments of £21,000 were made during the year in respect of Pay In Lieu of Notice (PILON) for six colleagues (2024-25: £1,446,000 of which £16,000 was in respect of PILON).

The decrease in the number of severance payments made this year compared to the previous year was primarily the result of a review and reorganisation of SLC’s change delivery function in 2024-25, which had resulted in an increase that year.

Off-payroll Arrangements (unaudited)

Off-Payroll Arrangements exceeding £245 per day

	31 March 2026 No.	31 March 2025 No.
No. of existing engagements as of 31 March 2026	9	5
Of which…
No. that have existed for less than one year at time of reporting.	6	3
No. that have existed for between one and two years at time of reporting.	2	1
No. that have existed for between two and three years at time of reporting.	-	-
No. that have existed for between three and four years at time of reporting.	-	-
No. that have existed for four or more years at time of reporting.	1	1

	31 March 2026 No.
No. of temporary off-payroll workers engaged during the year ended 31 March 2026	9
Of which…
Not subject to off-payroll legislation	-
Subject to off-payroll legislation and determined as in-scope of IR35	7
Subject to off-payroll legislation and determined as out-of-scope of IR35	2
No. of engagements reassessed for compliance or assurance purposes during the year	-
Of which: no. of engagements that saw a change to IR35 status following review.	-

	31 March 2026 No.
For any off-payroll engagements of board members, and/or senior officials with significant financial responsibility, between 1 April 2025 and 31 March 2026
Number of off-payroll engagements of board members and/or senior officials with significant financial responsibility, during the financial year	-
Total number of individuals on- and off-payroll that have been deemed “board members and/or senior officials with significant financial responsibility” during the financial year.	13

People Strategy (unaudited)

SLC developed and launched a new three-year People Strategy in April 2025, covering 2025-26 - 2027-28. The strategy is grounded in the context of the Enable transformation programme and seeks to support the organisation through this significant transformation.

The strategy has four key themes:

Culture: We will build and embed a culture where purpose, people and performance thrive.

Skills: We will develop targeted and tailored learning and talent programmes to ensure SLC and our colleagues have the skills we need now and in future.

Colleague Experience: We will build engagement through a happy, healthy and diverse workforce supported by effective line management and leadership.

Total Reward: We will stabilise our pay challenges and support colleagues with a comprehensive total reward and recognition offering (shifting the dialogue away from just ‘pay’).

Key deliverables over 2025-26, the first year of the People Strategy, included:

As part of the Culture workstream, launching a new shared values model, HEART (Honesty, Empowerment Accountability, Respect and Trust), embedding a new colleague feedback model and launching an instant recognition tool.

As part of the Total Reward workstream, transitioning some of our key employee benefits from salary sacrifice to net pay schemes, ensuring ALL colleagues can now access them - including those 40% who were previously excluded due to National Living Wage constraints.

As part of Colleague Experience, taking around 90 leaders through Franklin Covey’s Four Essential Roles of Leadership programme; developing a new suite of policy skills and practice training and guidance materials for our managers; enhancing accessibility of our suite of people policies and guidance, simplifying navigation and making it easier for colleagues and managers to locate the information they need.

As part of the Skills workstream, developed SLC’s five core skills - digital, data, risk, change and customer, supported by 78 technical skills and completed our first organisation-wide skills assessment. Improved our mandatory eLearning offer by streamlining content and delivery, saving colleagues up to 8 hours each in required learning time over a year.

Work has continued this year on implementing our three-year Equality, Diversity and Inclusion strategy. Progress against this strategy and the details of the changes in composition of our workforces over the year is available in our latest EDI annual report 2025-26.

SLC is committed to the development and progression of colleagues with disabilities and to the provision of an inclusive and accessible working environment for all. In December 2025, SLC was successfully reaccredited with the highest level of recognition under the Government’s Disability Confident scheme - Disability Confident Leader.

The accreditation recognises the continued progress we are making in creating a more inclusive and accessible workplace and confirms that our approach to supporting disabled colleagues is meeting the highest standard.

The introduction of our new Workplace Adjustments Policy and process in 2025 played an important role in the assessment outcome. This work has helped us strengthen the way we support colleagues by focusing on early conversations, practical support and a more consistent approach to reducing barriers in the workplace.

At SLC, we want to go further than simply providing reasonable adjustments for colleagues who experience barriers due to disability: our aim is to remove barriers wherever possible for everyone, creating a working environment that is more equitable, accessible and inclusive by design.

Our re-accreditation also reflects the wider work happening across SLC to strengthen inclusion and accessibility, including the ongoing review of policies and practices to ensure they are inclusive, accessible and responsive to the needs of our colleague population.

SLC’s Recruitment and Selection Policy outlines and confirms our commitment as a Disability Confident Leader by ensuring candidates identifying as having a disability, and able to meet the minimum criteria for a role, are guaranteed an interview. Practical guidance for recruiting, managing and developing colleagues with a disability or health condition is available for managers.

Our 2025 Gender Pay Gap Report shows a decrease in SLC’s mean gender pay gap from 2024 of 0.7 percentage points from 10.5% to 9.8%; as well as a decrease in our median gender pay gap of 0.8 percentage points from 7.9% in 2024 to 7.1% in 2025. We explain the detail behind these results and our action plan to reduce our gender pay gap in the SLC Gender Pay Gap Report 2025.

‘Our Voice’ Employee Engagement

SLC undertakes an annual employee engagement survey, supported by three pulse surveys each year, to understand colleagues’ experiences and views of working at SLC. The findings inform our ambition to be a great place to work and help shape action at organisational, directorate and local levels.

The 2025-26 Our Voice survey was completed in March 2026, achieving a response rate of 77% of employees. Overall engagement was measured at 58%, an improvement of two percentage points compared with the previous annual survey, although this remains slightly below the APRA target set by the Board and shareholders.

Line management continues to be a key strength, with colleagues reporting feeling well supported by their managers. Inclusion and wellbeing also remain positive areas. There were improvements in perceptions of senior leadership, alongside increased confidence in organisational and local communication and engagement. Growth and development was the lowest scoring theme and will remain a priority area for action.

These insights will inform targeted action plans at local, directorate and corporate level, supporting continued progress in colleague engagement in the year ahead.

Staff Health, Safety and Wellbeing

SLC understands and discharges its duties under the Management of Health and Safety at Work Regulations 1999 and the Health and Safety Act 1974. SLC does this using a broad strategy incorporating regularly reviewed and updated policies, mandatory annual Health and Safety training for all employees including a workstation assessment, a regular review of Health and Safety risks, regular audits of the working environment, independent third-party assurance reviews such as ISO 45001, regular communications to staff and an annual Health and Safety report to the Audit and Risk Committee.

Over the course of 2025-26, SLC developed a new Wellbeing Strategy to launch in April 2026; to bring together the tools and support colleagues need to take ownership of and boost their physical, mental, financial and social wellbeing.

Sickness Absence Report

	2025-26 %	2024-25 %	2023-24 %
Sickness Absence	3.96	3.59	4.13

Sickness absence is shown as a percentage of total available working days in year. This shows that sickness absences have increased by 10.3% in 2025-26 compared to 2024-25 but are still below our peak levels of 2023-24.

Staff Turnover

Staff turnover percentage includes all staff employed at SLC. For a given period, the turnover figure is calculated as the number of leavers within that period divided by the average of staff in post over the period.

Staff Turnover Report

	2025-26 %	2024-25 %	2023-24 %
Staff turnover percentage	6.94	10.51	14.84

Staff turnover has reduced by 34% in 2025-26 compared to FY2024-25, marking the fourth consecutive year of reduction. While some of this is attributable to SLC’s efforts in improving its employee value proposition, it is also a reflection of the considerable cooling of the employment market in the UK over this year.

Trade Union Facility Time Reporting

SLC has a longstanding and productive relationship with its recognised trade union, Public and Commercial Services Union (PCS). SLC and PCS hold monthly meetings which provide an opportunity to discuss and resolve employment and business-related matters. PCS provided support across all SLC sites: Glasgow, Darlington and Llandudno Junction. In 2025-26, SLC consulted with PCS on a number of projects impacting colleagues, including the new Workplace Adjustments policy and process, the organisation design and people impacts expected from the transformation programme, Enable; various policy updates to ensure readiness for the Employment Rights Act changes and the annual pay remit uplifts and performance-related payments.

The Facility Time Agreement implemented in November 2018 permits SLC employees who act as PCS representatives to spend up to a maximum of 50% of their working week on union responsibilities.

Trade Union facility time reporting

Table 1 - Relevant Union Officials	31 March 2026	31 March 2025
Employees identified as relevant union officials	19	16
Full time equivalent employee number	18.2	16.0

Table 2 - Percentage of time spent on facility time	31 March 2026	31 March 2025
0% of working time
1-50% of working time	18.2	16
51-99% of working time
100% of working time

Table 3 - Percentage of pay bill spent on facility time	31 March 2026	31 March 2025
Total cost of facility time	£58,447	£22,446
Total pay bill	£152m	£141m
Percentage of pay bill spent on facility time	0.03%	0.02%

Table 4 - Paid Trade Union activities	31 March 2026	31 March 2025
Time spent on paid trade union activities as a percentage of total paid facility time	0%	0%

The prior year figure has been restated to correct the calculation of time spent on paid trade union activities as a percentage of total paid facility time. The restatement has no impact on total staff costs.

4.7 Parliamentary Accountability Report (audited)

Losses, Special Payments, and Write-offs

Losses and special payments are items that Parliament would not have contemplated when it agreed funds for SLC or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled.

Special Payments

Each year, SLC has a specific delegated authority of up to £150,000 for special payments against running costs. These are most frequently ex-gratia compensatory payments relating to customer service based on the findings and recommendations of Independent Assessors. These payments are limited to £500 per case for ex-gratia special payments (or £5,000 for direct financial losses). SLC remained within this delegated limit in FY2025-26, incurring costs of £121,428.

Independent Assessors are appointed by the UK and Welsh governments to consider appeals and complaints by student finance customers where SLC’s process has been exhausted.

Special payments of more than £500 or direct financial losses of over £5,000 require specific approval from DfE and sit outside of SLC’s delegated authority limit. Payments totalling £248,698 were made in FY2025-26.

Special Severance Payments

Included within special payments are five voluntary severance payments made during the year. Of these, four were provided for in 2024-25 following agreement with the Cabinet Office.

Four of the payments relate to voluntary redundancy, with one relating to a settlement agreement. At 31 March 2025, one case had been formally offered, while the remaining three were recognised as provisions.

The total severance payments made this year amounted to £242,137. The highest payment was £136,360, the lowest was £2,728, and the median value was £14,083.

Losses

SLC has delegated authority to write off losses or fruitless payments to a maximum of £40,000.

There were no losses exceeding £300,000, either individually or in aggregate, made in 2025-26.

Gifts

There were no gifts or donations made during the year (2024-25: none).

Regularity of expenditure

We are custodian of taxpayers’ funds and have a duty to parliament to ensure the regularity and propriety of our activities and expenditure. We manage public funds in line with MPM.

The importance of operating with regularity and the need for efficiency, economy, effectiveness and prudence in the administration of public resources to secure value for public money, is the responsibility of our Accounting Officer whose responsibilities are also set out in MPM.

They include responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable. To discharge this responsibility and ensure our control totals are not breached, the following activities are in place:

• formal delegation of budgets
• detailed monitoring of expenditure
• monthly management reporting against control totals

Fees and Charges

There are no material fees and charges to disclose.

Remote Contingent Liabilities

At the year-end SLC had no remote contingent liabilities.

Government Functional Standards

SLC complies with relevant Government Functional Standards.

Chris Larmer
Chief Executive and Accounting Officer
10 July 2026

5. Independent Auditor’s Report to the members of Student Loans Company Limited

5.1 Opinion on financial statements

I have audited the financial statements of Student Loans Company Limited for the year ended 31 March 2026.

The financial statements comprise the Student Loans Company Limited’s:

• Statements of Financial Position as at 31 March 2026;
• Statement of Comprehensive Net Expenditure, Statement of Cash Flows and Statement of Changes in Taxpayers’ Equity for the year then ended; and
• the related notes including the significant accounting policies.

The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and the UK adopted International Accounting Standards as applied in accordance with the provisions of the Companies Act 2006.

In my opinion the financial statements:

• give a true and fair view of the state of the Student Loans Company Limited’s affairs as at 31 March 2026 and its loss on ordinary activities after taxation for the year then ended; and
• have been properly prepared in accordance with the UK adopted International Accounting Standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.

5.2 Opinion on regularity

In my opinion, in all material respects, the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

5.3 Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs (UK)), applicable law and Practice Note 10 Audit of Financial Statements and Regularity of Public Sector Bodies in the United Kingdom (2024). My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my report.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2024. I am independent of the Student Loans Company Limited in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

5.4 Conclusions relating to going concern

In auditing the financial statements, I have concluded that the Student Loans Company Limited’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Student Loans Company Limited’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

5.5 Other information

The other information comprises the information included in the Annual Report but does not include the financial statements and my auditor’s report thereon. The directors are responsible for the other information.

My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my report, I do not express any form of assurance conclusion thereon.

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

5.6 Opinion on other matters prescribed by the Companies Act 2006

In my opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.

In my opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic Report and the Accountability Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the Strategic Report and the Accountability Report have been prepared in accordance with applicable legal requirements.

5.7 Matters on which I report by exception

In the light of the knowledge and understanding of the Student Loans Company Limited and its environment obtained in the course of the audit, I have not identified material misstatements in the Strategic Report or the Accountability Report.

I have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires me to report to you if, in my opinion:

• adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff; or
• the financial statements and the parts of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of director’s remuneration specified by law are not made; or
• I have not received all of the information and explanations I require for my audit;
• the Governance Statement does not reflect compliance with HM Treasury’s guidance.

5.8 Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ Responsibilities and the Statement of Accounting Officer’s Responsibilities, the directors are responsible for:

• maintaining proper accounting records;
• providing the C&AG with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;
• providing the C&AG with additional information and explanations needed for his audit;
• providing the C&AG with unrestricted access to persons within the Student Loans Company Limited from whom the auditor determines it necessary to obtain audit evidence.
• ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statement to be free from material misstatement, whether due to fraud or error;
• Preparing financial statements, which give a true and fair view, in accordance with the Companies Act 2006.
• preparing the Annual Report, which includes the Directors’ Remuneration Report, in accordance with the Companies Act 2006; and
• assessing the Student Loans Company Limited’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so.

5.9 Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit and report on the financial statements in accordance with the applicable law and International Standards on Auditing (UK) (ISAs (UK)).

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

Identifying and assessing potential risks related to non-compliance with laws and regulations, including fraud

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

• considered the nature of the sector, control environment and operational performance including the design of the Student Loans Company Limited’s accounting policies, key performance indicators and performance incentives.
• inquired of management, Student Loans Company Limited’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Student Loans Company Limited’s policies and procedures on:
  • identifying, evaluating and complying with laws and regulations;
  • detecting and responding to the risks of fraud; and
  • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the Student Loans Company Limited’s controls relating to the Student Loans Company Limited’s compliance with the Companies Act 2006 and Managing Public Money.
• inquired of management, Student Loans Company Limited’s head of internal audit and those charged with governance whether:
  • they were aware of any instances of non-compliance with laws and regulations; and
  • they had knowledge of any actual, suspected, or alleged fraud;
• discussed with the engagement team and the relevant internal and external specialists, including pension experts, where relevant, regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, I considered the opportunities and incentives that may exist within the Student Loans Company Limited for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions, and bias in management estimates. In common with all audits under ISAs (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of the Student Loans Company Limited’s framework of authority and other legal and regulatory frameworks in which the Student Loans Company Limited operates. I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the Student Loans Company Limited. The key laws and regulations I considered in this context included Companies Act 2006, and Managing Public Money.

Audit response to identified risk

To respond to the identified risks resulting from the above procedures:

• I reviewed the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements;
• I enquired of management, the Audit & Risk Committee and in-house legal counsel concerning actual and potential litigation and claims;
• I reviewed minutes of meetings of those charged with governance and the Board and internal audit reports;
• I addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and other adjustments; assessing whether the judgements on estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

I communicated relevant identified laws and regulations and potential risks of fraud to all engagement team members including internal and external specialists where relevant and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of my report.

5.10 Other auditor’s responsibilities

I am required to obtain sufficient appropriate audit evidence to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control I identify during my audit.

Martin Burgess (Senior Statutory Auditor)
10 July 2026

For and on behalf of the
Comptroller and Auditor General (Statutory Auditor)
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

6. Financial Statements

6.1 Statement of Comprehensive Net Expenditure

For the year ended 31 March 2026

	Note	2026	2025
	Note	£’000	£’000
Revenue	3	2,968	2,362
Staff costs	5	(151,716)	(141,788)
Restructuring costs	5	8	(1,446)
Depreciation, amortisation and impairments	7,8	(22,476)	(26,997)
Other administrative expenses	4	(135,416)	(126,836)
		(309,600)	(297,067)
Operating expenditure		(306,632)	(294,705)
Finance income		78	95
Finance costs	6	(1,765)	(2,017)
Net financing expense		(1,687)	(1,922)
Loss on ordinary activities before taxation		(308,319)	(296,627)
Tax on result of ordinary activities		-	(3)
Loss on ordinary activities after taxation		(308,319)	(296,630)
Other comprehensive income
Items that will not be reclassified to net operating costs:
Actuarial gain on defined benefit pension scheme	14	892	8,648
Total comprehensive net expenditure for the period		(307,427)	(287,982)

All income and expenditure reported is derived from continuing operations.

The notes on pages 74 to 104 form part of these Accounts.

6.2 Statement of Financial Position as at 31 March 2026

	Notes	2026	2026	2025	2025
	Notes	£’000	£’000	£’000	£’000
Non-current assets
Property, plant and equipment	7	49,121		47,521
Intangible assets	8	51,132		59,966
Total non-current assets			100,253		107,487
Current assets
Trade and other receivables	10	20,641		16,186
Cash and cash equivalents	11	4,064		8,689
Total current assets			24,705		24,875
Total assets			124,958		132,362
Current liabilities
Trade and other payables	12	(31,122)		(33,833)
Provisions	13	(3,300)		(3,785)
Total current liabilities			(34,422)		(37,618)
Total assets less current liabilities			90,536		94,744
Non-current liabilities
Trade and other payables	12	(25,446)		(26,141)
Provisions	13	(4,762)		(2,996)
Retirement benefit obligation deficit	14	(12,527)		(12,290)
Total non-current liabilities			(42,735)		(41,427)
Net assets			47,801		53,317
Capital and reserves
Called up share capital	17	-		-
General fund		60,328		65,607
Pension reserve		(12,527)		(12,290)
Total equity			47,801		53,317

These Financial Statements were approved by the Board of Directors on 7 July 2026 and were signed on its behalf by the Accounting Officer, who authorised these accounts for issue on the date of the Statutory Auditor’s certificate.

Student Loans Company Limited
Company registration number: 2401034

The notes on pages 74 to 104 form part of these Accounts.

Chris Larmer, Chief Executive and Accounting Officer
10 July 2026

6.3 Statement of Changes in Taxpayers’ Equity

For the year ended 31 March 2026

Capital and Reserves 2026	Note	General Fund	Pension Reserve	Share Capital	Total
Capital and Reserves 2026	Note	£’000	£’000	£’000	£’000
Balance at 1 April		65,607	(12,290)	-	53,317
Net (loss)/profit		(307,190)	(1,129)		(308,319)
Actuarial (loss)/gain in retirement benefit obligations	14		892		892
Grant from sponsoring department		301,911			301,911
Balance at 31 March		60,328	(12,527)	-	47,801

Capital and Reserves 2025	Note	General Fund	Pension Reserve	Share Capital	Total
Capital and Reserves 2025	Note	£’000	£’000	£’000	£’000
Balance at 1 April		81,219	(19,665)	-	61,554
Net (loss)/profit		(295,357)	(1,273)		(296,630)
Actuarial (loss)/gain in retirement benefit obligations	14		8,648		8,648
Grant from sponsoring department		279,745	-		279,745
Balance at 31 March		65,607	(12,290)	-	53,317

The General Fund represents total assets less liabilities, to the extent that the total is not represented by other reserves and financing items for the Company.

The Pension Reserve represents the net defined benefit liability of the scheme as calculated under IAS 19.

The notes on pages 74 to 104 form part of these Accounts.

6.4 Statement of Cash Flows For the year ended 31 March 2026

	Note	2026	2026	2025	2025
	£’000	£’000	£’000	£’000	£’000
Cashflow from operating activities
(Loss)/profit on ordinary activities after taxation		(308,319)		(296,630)
Adjustments to (loss)/profit on ordinary activities:
Depreciation	7	6,558		7,069
Impairments - Property, plant and equipment	7	25		32
Amortisation	8	15,893		19,670
Impairments - Intangible assets	8	-		226
Gain/(Loss) on disposal of fixed assets	4	127		366
Taxation		-		3
Finance costs	6	1,023		1,046
Finance income		(78)		(95)
Pension valuation movements	14	1,129		1,273
		(283,642)		(267,040)
(Increase)/decrease in trade and other receivables		(4,455)		852
Increase/(Decrease) in trade and other payables		(2,933)		5,927
less movements in payables relating to items not passing through net operating costs		(627)		(596)
Increase/(Decrease) in provisions		(118)		(34)
Cash payments for interest portion of lease liability		(1,023)		(1,046)
Net cash inflow/(outflow) from operating activities			(292,798)		(261,937)
Cashflow from investing activities
Finance income		78		95
Acquisition of property, plant and equipment	7	(4,199)		(3,009)
Acquisition of intangible assets	8	(7,613)		(14,316)
Proceeds from sales of property, plant and equipment		26		40
Net cash outflow from investing activities			(11,708)		(17,190)
Cashflow from financing activities
Grant-in-Aid funding received from sponsoring department		301,911		279,745
Cash payments for the principal portion of the lease liability		(2,030)		(2,063)
Net cash inflow from financing activities			299,881		277,682
Net increase/(decrease) in cash and cash equivalents	11		(4,625)		(1,445)
Cash and cash equivalents at 1 April	11		8,689		10,134
Cash and cash equivalents at 31 March	11		4,064		8,689

(1) The movement in trade and other payables noted above excludes movements on amounts due under leases of £473k (2024-25: £843k), which are non-cash movements.

(2) The movement in provision excludes movement on capitalised dilapidations provisions of (£1,399k) (2024-25: (£404k)), which are non-cash movements.

(3) The acquisition of property, plant and equipment excludes Right of Use assets where the full lease term is recognised in line with IFRS 16, which are non-cash, totalling £3,054k (2024-25: £1,650k), capital receipt accruals totalling £531k (2024-25: £596k) and non-cash addition relating to a reclassification of an asset from intangibles to tangibles in year of £466k (2024-25: £0).

The notes on pages 74 to 104 form part of these Accounts.

6.5 Notes to the Financial Statements

1.1 Accounting Policies

SLC was incorporated in 1989 as a company limited by shares under the Companies Act and is wholly in public ownership. SLC is owned by the Secretary of State for Education, the Welsh Ministers, the Scottish Ministers and the Minister for the Economy in Northern Ireland. The registered office of the company is Memphis Building, Lingfield Point, McMullen Road, Darlington, DL1 1RW.

The Financial Statements have been prepared on an accruals basis in accordance with the Companies Act 2006, and the Government Financial Reporting Manual (FReM) and other guidance issued by HM Treasury and the Secretary of State for Education. Where the requirements of the FReM and other guidance go beyond those of the Companies Act 2006, and do not conflict with it, they have been applied. We have also elected to comply with FReM disclosures in the Annual Report where it is deemed more transparent to do so and where there is no conflict with the Companies Act 2006. The Financial Statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the UK (Adopted IFRSs) and International Financial Reporting Interpretations Committee interpretations. There have been no significant changes to the FReM during the year other than the phased introduction of TCFD reporting.

Disclosure of Assessment of the Impact of Accounting Standards not yet Adopted

1.2 Impact of New Accounting Standards

New accounting standards issued but effective for accounting periods starting on or after 1 January 2027.

IFRS 18 Presentation and Disclosure in Financial Statements introduces new requirements for the presentation and structure of the primary financial statements. SLC does not expect adoption of the standard to have a material impact on the financial statements.

IFRS 19 Subsidiaries without Public Accountability: Disclosures introduces reduced disclosure requirements for eligible subsidiaries. The Student Loans Company does not expect the standard to have a material impact on the financial statements.

1.3 Measurement Convention

The Financial Statements are prepared on the historical cost basis, with the following exceptions:

• Financial instruments, namely payables and receivables, are measured at amortised cost - see note 1.12 for further detail.
• Cash is stated at fair value.
• Assets under development are valued at historic cost, calculated using expenditure incurred to date, and are subject to impairment review - see note 1.10 for further detail.

1.4 Functional and presentation currency

The financial statements are presented in Pounds Sterling (£) which is the functional and presentation currency of SLC. All values are rounded to the nearest £1,000 unless otherwise stated.

1.5 Going Concern

The terms of the Framework Document between SLC and DfE, Lifelong Learning and Skills Directorate of the Scottish Government, acting on behalf of Scottish Ministers, the Department for the Economy in Northern Ireland and the Directorate for Skills, Higher Education and Lifelong Learning of the Welsh Government requires SLC to conduct its affairs so as to remain solvent within the total resources made available to it by the funding bodies. These Financial Statements have been prepared on this basis.

Grant-in-Aid for SLC’s business as usual operating expenditure for 2026-27 has been included in the sponsoring departments’ estimates for that year, which have been approved by Parliament. The total budget will be confirmed by the DfE as set out in the APRA Letter 2026-27. The APRA letter will also confirm funding for the delivery of HE Reform and Enable, SLC’s transformation programme, both of which reflect the ongoing commitment to SLC’s longer-term operation as the delivery vehicle for student finance. It has therefore been considered appropriate to adopt a going concern basis for the preparation of the 2025-26 financial statements.

The transfer of the remaining deferred members and pensioners of SLC’s defined benefit pension scheme to the Civil Service Pension remains paused. At this time, we are working towards a transfer around June 2027. The pension scheme deficit is underwritten by DfE.

The Directors have conducted a going concern assessment and conclude it is appropriate to adopt a going concern basis for the preparation of these financial statements.

1.6 Student Loans

SLC, in conjunction with HMRC through whom most repayments are collected, services the entire loan book. The loan book is partly owned by HMG and partly owned by private investors. The value of loans owned by HMG is recorded in the accounts of DfE.

1.7 Use of Estimates and Judgement

The preparation of the Financial Statements in compliance with IFRS requires Directors to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenditure. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on a continuing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

Lease term: The lease term reflects the non-cancellable period, adjusted for break clauses where SLC is reasonably certain to terminate. Where SLC is not reasonably certain to exercise a break clause, the lease term is determined to be the contractual lease end date.

Dilapidations provisions: The dilapidations provision is based on external valuations provided by SLC’s property consultants. The latest formal desk top valuations were provided in March 2026. Key assumptions are based, in addition to management judgement, on the likely obligation at the lease expiry date and lease stipulations on the property condition on that expiry date.

Accruals and Prepayments: SLC recognises accruals based on receipted purchase orders, other accruals and/or prepayments where the invoice value is over £10,000 de minimis. The exceptions to this de minimis rule include accruals in respect of internal rechargeable resource costs and project milestone-based contracts. Accruals and prepayments are estimated using the best available sources of information at the date of calculation.

Retirement Benefit Obligations: SLC’s retirement benefit obligations are based on external valuations provided annually by qualified actuaries.

The following key assumptions are used to determine estimated future cash outflows anticipated to settle SLC’s pension obligations:

• Discount rate
• RPI and CPI Inflation
• Life expectancy
• Deferred pension increase rate
• Pensions-in-payment increase rate
• Duration of the defined benefit obligation

The pension scheme’s actuary carries out triennial valuations on behalf of the pension scheme trustee. The final results of the section 179 valuation undertaken in November 2022 projected forward are reflected in the actuarial valuation as at 31 March 2026. This valuation predicts a deficit, and the pension liability is reflected in these financial statements. There is a valuation ongoing which is being aligned with the intended transfer to DfE.

Intangible Assets: Much of the development of SLC’s systems was undertaken in-house with costs that meet the recognition criteria of IAS 38 Intangible Assets capitalised as an intangible asset. A detailed assessment was required to determine the level of capitalisation of such work. Each team working on projects is assessed against IAS 38 to determine whether their activity is capitalisable, and timesheets are used to determine the costs to be capitalised. In addition, management undertook an annual review to identify any impairments or disposals required, and to confirm the likely asset life over which these systems should be amortised.

Capitalisation will only occur when management identify the technological and economic feasibility of the project as detailed at note 1.11 below. Assets under development and other intangible assets are tested annually for impairment with an assessment undertaken as to whether the asset will be, or continues to be, technologically and economically viable. Impairments are based on key assumptions made by management on the value in use of the intangible asset.

Useful Economic Lives: Estimates and judgement are included in determining amortisation and useful economic lives. Useful lives of assets are based on the characteristics of assets, contract end dates and expected re-investment periods. There is uncertainty around when an asset will be replaced or will stop being used due to SLC’s funding model, in addition to the uncertainty around technological advances. The estimation uncertainty is counteracted by carrying out an annual useful life review to determine if the useful lives applied remain reasonable. A change in a useful life is applied when it is management’s judgement to do so after reviewing information supplied during the process or through the normal course of business.

1.8 Revenue

Revenue: SLC complies with IFRS 15 Revenue from Contracts with Customers, which requires revenue to be recognised when the reporting entity has completed performance obligations stipulated in its contracts with customers. Revenue is recognised for the administration fees of the bursary scheme.

Grant-in-Aid: Grant-in-Aid is drawn down from the DfE and recorded on a cash basis in line with DfE’s own reporting requirements and in line with the FReM. Grant-in-Aid is credited to SLC’s reserves.

1.9 Taxation

Corporation Tax: Tax on the profit or loss for the year comprises current tax. Tax is recognised in the SOCNE. Current tax is the expected tax due on the taxable profit or loss for the year and any adjustment to tax due in respect of previous years.

VAT: Income and expenditure are shown net of VAT with irrecoverable VAT charged to the SOCNE under the relevant expenditure heading.

1.10 Property, Plant and Equipment

Recognition

Property, plant and equipment is capitalised where: its value is greater than £5,000 (grouped) at the date of purchase; it is held for use in delivering services or for administrative purposes; it is probable that future benefits will flow to, or service potential be provided to, SLC; it is expected to be used for more than one financial year; and the cost of the item can be measured reliably.

Measurement

Items of property, plant and equipment are initially measured at cost, representing the costs directly attributable to the acquisition or construction of the asset.

Revaluation and Impairment

The assets’ net book values are reviewed for impairment, and adjusted if appropriate, at the date of each SOFP. Apart from right-of-use assets, assets are valued at depreciated historical cost less impairment. PPE assets held are of short life and or low value and depreciated historical cost.

There is no revaluation reserve balance within the SOFP, as SLC does not have a policy of revaluing its assets.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised within other administrative expenses in the SOCNE.

Right of use Assets

Where leases were recognised as operating leases, SLC has measured the right of use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments recognised in the SOFP immediately before the date of initial application and including the carrying amount of the dilapidations provision.

For new leases with a remaining lease term of less than 12 months and for leases of low-value assets the Company has applied the optional exemptions to not recognise right-of-use assets but to account for the lease expense on a straight-line-basis over the remaining lease term.

Depreciation

Depreciation is charged on a straight-line basis on all property, plant and equipment when substantially all the risks and rewards of the asset have been transferred to SLC. It is calculated to write off the cost of each asset less estimated residual value, evenly over its expected useful life as follows:

Right-of-use assets	Over the term the lease
Short leasehold improvements	Shorter of remaining useful life or unexpired period of the lease
Computer and other electrical equipment	3 to 5 years
Furniture, fixtures and fittings	5 to 10 years
Motor Vehicles	1 to 3 years

During the financial year, a change in accounting estimate has been applied for short leasehold improvements, such that depreciation is now charged over the periods shown above, rather than over the unexpired period of the lease.

The change in accounting estimate was required to allow for a better estimate of useful lives of assets within this asset class and has been applied from 31 March 2026.

1.11 Intangible Assets Recognition

Intangible assets valued greater than £5,000 (grouped) are recognised where the costs can be measured reliably and there is a clear future benefit or service potential attributable from the asset that will flow to SLC.

SLC determines phases during each project’s life cycle.

1. Discovery
2. Inception
3. Delivery and Implementation
4. Run and Warranty

As costs accumulate during the discovery phase, expenditure is not capitalised, as feasibility is only determined at the end of the discovery phase. A stage gate report or alternative equivalent assessment is used to determine each project as ready for delivery.

Expenditure on delivery and implementation is then capitalised where all the following can be demonstrated in accordance with IAS 38:

• the project is technically feasible to the point of completion and will result in an intangible asset for use in the provision of services to SLC or to SLC customers
• SLC intends to complete the asset and use it
• SLC could use the asset
• the intangible asset will generate probable future economic or service delivery benefits
• adequate financial, technical and other resources are available to SLC to complete the development and use the asset
• SLC can reliably measure the expense attributable to the asset during development

Only expenditure directly attributable to the cost of developing software in-house is capitalised. Costs directly attributable are capitalised by way of an estimated standard cost for each development team. Any other expenditure is taken to the SOCNE as an expense.

Websites represent website developments for delivering specific services to customers in the payment and repayment of products within the portfolio.

Measurement

All intangible assets recognised, with the exception of perpetual licences, have finite useful lives and are measured at cost less accumulated amortisation and impairment losses. In accordance with the assessment of capitalisation methods for software development conducted, the cost for internally generated intangible assets has been assessed as the direct labour and management costs directly attributable to the development of the intangible asset. Perpetual licences are held at their carrying value, with an indefinite useful life. When using an indefinite useful life, SLC considers the nature of the licence and whether the use of the licence is for a set period or indefinitely.

Revaluation and Impairment

The assets’ net book values are reviewed for impairment, and adjusted if appropriate, at the date of each SOFP. The assets are valued at depreciated historical cost.

Assets under construction are not amortised but are assessed for impairment annually.

Amortisation

Amortisation is recognised in the SOCNE on a straight-line basis over the useful life of intangible assets from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The expected useful lives for the current and comparative year are as follows:

Internally generated software	2 to 10 years
Websites	5 years
Software licences	Over the period of the licence

Internally generated software assets cover SLC’s core systems. Their subsequent enhancements to these systems including application of Government policy is built upon these systems. The useful lives of these assets are based on the best information available, expected service launches on the Digital Student Finance System (DSFS), expected decommissioning dates of Apply and Assess platforms, end dates of underlying technology licences and expected re-investment in technology.

Amortisation, useful lives and residual values are reviewed at the end of each financial year on an individual asset basis to determine if the most appropriate lives are reflected and remain in line with our policy. If SLC expect to use an asset for longer or shorter than originally estimated or funding is approved to upgrade system functionality, this may trigger an adjustment to an asset’s useful life.

Software-as-a-Service (SaaS) arrangements

SaaS arrangements are service contracts providing SLC with the right to access the cloud provider’s application software over the contract period. As such SLC does not recognise a software intangible asset at the contract commencement date.

A right to receive future access to the supplier’s software does not, at the contract commencement date, give the customer the power to obtain the future economic benefits flowing from the software itself and to restrict others’ access to those benefits.

The following outlines the accounting treatment of costs incurred in relation to SaaS arrangements:

Recognise as an operating expense over the term of the service contract	Fee for use of application software; Customisation by third party not separately identifiable from right to receive access to the application software.
Recognise as an operating expense as the service is received	Configuration costs; In-house customisation costs; Distinct customisation costs by a third party; Data conversion and migration costs; Testing costs; Training costs.
Recognise as an intangible asset	Costs incurred for the development of software code that enhances or modifies, or creates additional capability to, existing on-premise systems and meets the definition of and recognition criteria for an intangible asset.

1.12 Financial Instruments

Financial assets and liabilities

Financial assets and financial liabilities are recognised in the SOFP when SLC becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value, plus or minus directly attributable transaction costs, except for the transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss which are recognised immediately in the SOCNE.

Financial Assets Classification

The SLC classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value in the SOCNE, and
• those to be measured at amortised cost.

As at the date of the SOFP, SLC has financial assets included in current assets; these comprise of ‘trade and other receivables’ and ‘cash and cash equivalents’. SLC holds these financial assets with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

Financial Liabilities Classification

Financial liabilities are classified at initial recognition and subsequently measured at amortised cost. As at the date of the SOFP, financial liabilities comprise trade payables and accruals.

Other liabilities recognised in the SOFP, including deferred income, VAT, other taxation and social security contributions, do not meet the definition of financial liabilities under IAS 32 as they arise from statutory requirements or obligations to deliver services rather than contractual obligations to deliver cash.

Provisions

Provisions are recognised when:

• There is a present legal or constructive obligation as a result of past events
• It is more likely than not that an outflow of resources will be required to settle the obligation
• The amount can be reliably estimated

The provision’s value is discounted when the time value of money is considered material. Changes in the discount rate applied will be recognised in the year in which the change occurred.

Provisions relate to dilapidations arising under lease agreements and represent the estimated cost of meeting contractual obligations to reinstate leased properties to their original condition or agreed condition at the end of the lease term.

The measurement of dilapidations provisions involved judgement, particularly in estimating the scope and cost of remedial works, assumptions about future costs, and the timing of lease exits. Estimates are informed by reports prepared by independent property consultants, using current market information and professional judgement. However, there is inherit estimation uncertainty, as final dilapidations claims are typically subject to negotiation with landlords at or near lease terminations and may differ from initial estimates.

1.13 Employee Benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under a short-term cash performance related award, if SLC has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. The cost of annual leave earned but not taken by employees at the reporting date of the SOFP is recognised to the extent that employees are permitted to carry forward leave to the following year.

SLC contributed to the Civil Service alpha and partnership schemes and NOW: Pensions scheme during the year.

Civil Service Pension Scheme (the CSPA)

The alpha scheme provides benefits on a career-average basis, with a normal pension age equal to the member’s state pension age. Pensions payable under the alpha scheme are increased annually in line with the relevant legislation relating to defined benefit pensions increases. The alpha scheme is a defined benefit pension scheme in accordance with IAS 19.

Employee contributions are set at one of four rates in the range 4.6% to 8.05% of pensionable earnings, based on salary bands. In all cases, members may opt to give up (commute) their pension for a lump sum up to the limits set by the Finance Act 2004. The Government Actuary’s Department undertakes a valuation of the CSPS every four years. The contribution rates are set to meet the cost of the benefits accruing during 2025-26 to be paid when the member retires, and not the benefits paid during this period to existing pensioners. Employer contributions remain at a flat of 28.97% of pensionable earnings.

The partnership pension account is a stakeholder pension arrangement and classified as a defined contribution pension scheme in accordance with IAS 19. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member) into a personal pension product. The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally provided risk benefit cover (death in service and ill-health retirement).

There is no change to the employee contribution rates for the partnership pension scheme in 2026-27.

These statutory arrangements are unfunded, as the cost of the benefits is met by monies allocated by Parliament each year. Further details about the civil service pension arrangements can be found at www.civilservicepensionscheme.org.uk. It is not possible to separately identify SLC’s share of the underlying assets and liabilities.

The alpha scheme is a multi-employer defined benefit scheme. The scheme is an unfunded, defined benefit scheme that covers civil servants across a number of government departments and arm’s length bodies. The scheme is not designed to allow bodies to identify their share of the underlying scheme liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme. SLC recognises contributions payable to the alpha scheme and the partnership scheme in the Statement of Comprehensive Net Expenditure.

NOW: Pensions

NOW: Pensions is a defined contribution scheme that was established in prior years to meet SLC’s statutory obligations to enrol all employees in a pension scheme. The scheme still maintains some active membership. Contributions of £214k (2024-25: £254k) are recognised in the SOCNE as they are incurred. SLC has no further liability once contributions are paid to the pension scheme.

Student Loans Company Limited Retirement and Death Benefits Scheme (the SLC Pension Scheme)

The SLC Pension Scheme is defined under the Pensions Act 1993 (part 1) and operates in accordance with the Pension Act 1995 as a trust, established by its Definitive Trust Deed and Rules (June 2004). The scheme is legally separated from SLC and governed by the Board of Trustees, which has control over its operation, funding and investment strategy. The Board is chaired by an independent trustee. The scheme is regulated by the Pensions Regulator, and its Annual Report and Accounts are subject to audit by an independent auditor. SLC is the ‘principal employer’ and, as such, retains responsibilities within the Definitive Trust Deed and Rules.

SLC has the ability to receive a surplus following a gradual settlement of the Scheme and therefore recognises scheme assets within the financial statements. The scheme currently has a deficit of £12.5m (note 14).

The scheme closed to future accrual of benefits, and all active members were moved to the CSPA during the year ended 31 March 2020. This included the bulk transfer of the benefits for those with more than two years’ pensionable service into the nuvos final salary section. Members with less than 2 years’ service (around 400 members) were given the option of either a refund of contributions or an enhanced cash transfer sum payable during the year ended 31 March 2021.

The Trustee reviews the scheme’s investment strategy at least every three years following the actuarial valuation of the scheme. The last full triennial valuation was carried out as at 5 November 2022, with the most recent investment strategy dated April 2023. The accounting actuarial valuation as at 31 March 2026 is based on the section 179 valuation from November 2022.

When the investment strategy was revised, the transfer of the deferred and pension population was imminent. In preparation for the scheme’s move to the Cabinet Office, all assets were therefore transitioned into a liquidity cash fund. During FY25-26, the Trustees implemented an alternative investment strategy, transferring a significant proportion of scheme assets from the LGIM Sterling Liquidity Funds into alternative funds with asset allocations primarily weighted towards non-UK bonds.

The Trustee maintains a bank account and invests members’ Additional Voluntary Contributions (AVCs) in insurance policies, which are reviewed regularly to ensure continued suitability.

Day-to-day management of the scheme’s assets has been delegated to Legal & General Investment Management (LGIM). Assets are invested partly in alternative funds with a primary weighting to non-UK bonds, with the balance retained in the Sterling Liquidity Fund.

The defined benefit scheme provides a pension and lump sum based on pensionable service and final pensionable salary. The final pensionable salary is the average of the best three continuous pensionable salaries in the ten years before retirement. Benefits are also accessible to a spouse on the death of a scheme member.

SLC’s net obligation in respect of the defined benefit pension plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the prior years. That benefit is discounted to determine its present value, and the fair value of any plan assets (at bid price) is deducted to determine the net obligation. The liability discount rate is the yield at the reporting date on ‘AA’ credit rated bonds denominated in the currency relating to the terms of the bonds and having maturity dates approximating to the terms of SLC’s obligations.

The calculation is performed by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to SLC, the recognised asset is limited to the present value of benefits available in the form of any future refunds from the plan, reductions in future contributions to the plan, or on settlement of the plan and takes into account the adverse effect of any minimum funding requirements. Actuarial gains and losses that arise are recognised by SLC in the year they occur through the SOCNE.

1.14 Leases

Lease liabilities are recognised and measured in accordance with IFRS 16 Leases. SLC capitalise the present value of the minimum lease payments at the inception of the lease and a liability recognised for the same amount. Leased assets are depreciated over the shorter of the asset’s useful life and the lease term. Each lease payment is allocated between the principal capital component and finance charges. The finance charges are allocated to each period during the lease term in order to produce a constant periodic rate of interest on the remaining balance of the liability.

Interest on leases is charged to the SOCNE in the year to which the lease payment relates.

Leases which are low in value or represent a short-term lease of up to 12 months are recognised as expenses on a straight-line basis and charged to the SOCNE in the year to which they relate.

1.15 Segmental Reporting

Operating segments are reported, with the exception of non-cash expenditure consisting of depreciation, AME along with non-APRA income and spend, in a manner consistent with the internal reporting as provided to the ELT and the Board. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer (CEO).

The CEO reviews performance based on four segments: Operating Activities, Change Programme, LLE and Higher Education (HE) Reforms and Catalyst. This is the basis for SLC’s reporting to DfE.

• Operating Activities represents day to day operating business undertaken by SLC.
• The Change Programme represents additional activities undertaken by SLC in the financial year to create new activities. Once complete they will become part of normal operating activities.
• LLE and HE Reform are Government initiatives.
• Catalyst Programme has identified initiatives through a series of gateways which can deliver a net benefit outcome.

There is no measure of assets or liabilities reported by segment to the CEO.

2 Segmental Reporting

Segmental information can be analysed as follows for the reporting years under review:

2026	Operating Activities	Change Programme	LLE & HE Reform	Catalyst	Total
	£’000	£’000	£’000	£’000	£’000
Segmental Revenue
Administration fees receivable from third parties	990				990
Other income	712				712
Other income - capital	1,266				1,266
Total revenue	2,968	-			2,968
Segmental Expenditure
Total expenditure	(254,415)	(34,455)	(18,973)	(1,757)	(309,600)
Operating profit/(loss)	(251,447)	(34,455)	(18,973)	(1,757)	(306,632)
Capital expenditure	(8,721)	(2,025)	(4,298)	(198)	(15,242)
Total Segmental Expenditure	(260,168)	(36,480)	(23,271)	(1,955)	(321,874)

Other Income – Capital relates to contributions received from Higher Education Providers to fund the uplift of the Bursaries Administration System.

2025	Operating Activities	Change Programme	LLE & HE Reform	Catalyst	Total
	£’000	£’000	£’000	£’000	£’000
Segmental Revenue
Administration fees receivable from third parties	1,030				1,030
Other income	1,269	63			1,332
Total revenue	2,299	63			2,362
Segmental Expenditure
Total expenditure	(252,891)	(16,846)	(23,616)	(3,714)	(297,067)
Operating profit/(loss)	(250,592)	(16,783)	(23,616)	(3,714)	(294,705)
Capital expenditure	(7,161)	(6,494)	(5,482)	-	(19,137)
Total Segmental Expenditure	(257,753)	(23,277)	(29,098)	(3,714)	(313,842)

Segmental information after operating profit before interest and tax has not been provided on the basis that these costs are determined at corporate level and are not separately reportable to management.

3 Revenue

	2026	2025
	£’000	£’000
Administration fees receivable from third parties	990	1,030
Other income	1,978	1,332
	2,968	2,362

The Administration fees receivable from third parties in the table above includes £1.0m of Bursary fee income (2024-25: £1.0m). These are fees raised for the administration services provided by SLC to support Higher Education Providers (HEPs) in England, Northern Ireland, Scotland and Wales, in providing mandatory and discretionary bursaries, scholarships and fee waivers to students. HEPs may subscribe to the full service or the core service.

The full service includes payment of the bursary, scholarship or fee waiver entitlement to the student. The core service is an information-only service. The level of subscription is intended to both pay for the planned operational costs incurred by SLC and to fund a programme of ongoing enhancements.

Other Income mainly comprises income arising from sub-letting arrangement at Clyde Place and contributions received from Higher Education Providers (HEPs) to fund the uplift of the Bursaries Administration System. Income from HEPs is new income recognised in FY25-26.

4 Items included in Net Expenditure before Interest and Tax

Other Administrative Expenditure

	2026	2025
	£’000	£’000
Technical Service Delivery	54,579	46,614
Technology, Licences, Voice & Data	33,761	31,052
Outsourced Services	27,077	27,744
Professional Services	7,887	7,446
Premises Costs	5,161	4,737
Postage & Courier	2,402	4,752
General Expenditure	1,599	1,172
Bank Charges	1,044	1,011
Office Services	677	926
Other	1,067	1,233
Recruitment	162	149
TOTAL	135,416	126,836

The table above provides the breakdown of other operating expenditure. An explanation of the increase in expenditure in 2025-26 can be found in section 3.2.3. of the annual report and accounts.

The following analysis is provided to show key items included in net expenditure before interest and tax.

	2026	2025
	£’000	£’000
Dilapidations provision (non-cash)	-	(75)
Depreciation, amortisation and impairments (non-cash)	22,476	26,997
Net gain/(loss) on disposal of fixed assets (non-cash)	127	366
Directors’ remuneration*	754	826
Auditors remuneration:
- Audit of these financial statements	266	334

*Prior year figure has been restated to include taxable expenses.

5 Staff Costs

The aggregate payroll costs were as follows:

	2026	2025
	£’000	£’000
Wages and salaries	112,112	109,486
Social security costs	14,355	11,040
Pension service costs/(income)	27,291	25,543
Capitalised SLC staff costs	(3,502)	(5,385)
	150,256	140,684
Other staff costs	1,460	1,104
	151,716	141,788
Restructuring costs	(8)	1,446

Restructuring costs are presented as a net credit in the year due to the reversal of an over-provision recognised in 2024–25.

Capitalised staff costs reflect the cost of SLC staff time on the development of in-house assets. Capitalised staff costs have decreased in year by around £2m.

Average staff numbers for the year were 3,230 compared to 3,284 in FY2024-25 as noted in the Remuneration and Staff Report.

Wages and salaries increased by 2.4% during the year, reflecting the annual pay remit implemented from October 2025. This was partly offset by a 1.7% reduction in average staff numbers.

Other staff costs represent the additional cost to SLC for agency workers, contractors, the apprenticeship levy and other indirect staff costs at times of peak demand or to cover vacant posts whilst recruitment is underway.

Directors’ remuneration:

	2026 £’000	2025 £’000
Non-Executive Directors’ Fees	149	147
Executive emoluments (including benefits in kind)	469	534
Pension contributions	136	144
Taxable expenses	-	1
	754	826

There are three statutory Executive Directors at SLC, the Chief Executive Officer, the Deputy Chief Executive Officer and Customer Officer, and the Chief Financial Officer. The remuneration of each individual Director is analysed in the Remuneration and Staff Report.

Highest paid Director

The highest paid Director during the year was SLC’s CEO, Chris Larmer in line with the FY2024-25 position.

	2026 £’000	2025 £’000
Total remuneration attributable (excluding pension)	222	214
Total contributions to pension scheme	59	56
Accrued pension balance (MyCSP)	21	16

6 Finance Costs

	2026 £’000	2025 £’000
Pension interest charge	742	971
Lease finance charge	1,023	1,046
	1,765	2,017

7 Property, Plant and Equipment

	Short leasehold improvements	Computer and other electronic equipment	Furniture, fixtures and fittings	Motor vehicles	Assets under construction	Right of Use	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Cost:
At 1 April 2024	15,560	22,331	4,123	72	1,553	38,614	82,253
Additions	29	953	958	101	1,563	1,651	5,255
Disposals	(2,508)	(2,626)	(851)	(72)	-	(365)	(6,422)
Transfers	1,540	1,015	6	-	(2,561)	-	-
Impairment	-	-	(32)	-	-	-	(32)
At 31 March 2025	14,621	21,673	4,204	101	555	39,900	81,054
Depreciation
At 1 April 2024	7,637	15,255	2,452	44	-	7,299	32,687
Charge for the year	1,129	2,816	345	25	-	2,754	7,069
On disposals	(2,420)	(2,668)	(726)	(54)	-	(355)	(6,223)
Impairments
At 31 March 2025	6,346	15,403	2,071	15	-	9,698	33,533
Net book value
At 31 March 2025	8,275	6,270	2,133	86	555	30,202	47,521

	Short leasehold improvements	Computer and other electronic equipment	Furniture, fixtures and fittings	Motor vehicles	Assets under construction	Right of Use	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Cost:
At 1 April 2025	14,621	21,673	4,204	101	555	39,900	81,054
Additions	194	4,709	144	14	135	3,054	8,250
Disposals	(49)	(1,362)	(108)	(10)	-	-	(1,529)
Transfers	667	-	-	-	(667)	-	-
Impairment	-	-	(25)	-	-	-	(25)
At 31 March 2026	15,433	25,020	4,215	105	23	42,954	87,750
Depreciation
At 1 April 2025	6,346	15,403	2,071	15	-	9,698	33,533
Charge for the year	732	2,628	457	37	-	2,704	6,558
On disposals	(49)	(1,299)	(107)	(7)	-	-	(1,462)
Impairments	-	-	-	-	-	-	-
At 31 March 2026	7,029	16,732	2,421	45	-	12,402	38,629
Net book value
At 31 March 2026	8,404	8,288	1,794	60	23	30,552	49,121

8 Intangible assets

	Intangible assets under development	Internally generated software*	Websites	Software licences	Total
	£000’s	£000’s	£000’s	£000’s	£000’s
Cost:
At 1 April 2024 (Restated)*	13,710	216,719	2,583	6,225	239,237
Additions	11,825	-	-	2,491	14,316
Disposals	-	(6,868)	-	(875)	(7,743)
Transfer	(14,656)	14,656	-	-	-
Impairment	(122)	-	-	(104)	(226)
At 31 March 2025 (Restated)*	10,757	224,507	2,583	7,737	245,584
Amortisation
At 1 April 2024 (Restated)*	-	167,405	2,392	3,661	173,458
Charge for the year	-	17,838	127	1,705	19,670
Disposals	-	(6,635)	-	(875)	(7,510)
At 31 March 2025 (Restated)*	-	178,608	2,519	4,491	185,618
Net book value
At 31 March 2025 (Restated)*	10,757	45,899	64	3,246	59,966

	Intangible assets under development	Internally generated software*	Websites	Software licences	Total
	£000’s	£000’s	£000’s	£000’s	£000’s
Cost:
At 1 April 2025 (Restated)*	10,757	224,507	2,583	7,737	245,584
Additions	7,415	-	-	198	7,613
Disposals	-	(12,856)	-	(355)	(13,211)
Transfer	(4,611)	4,611	-	-	-
Impairment	-	-	-	-	-
At 31 March 2026	13,561	216,262	2,583	7,580	239,986
Amortisation
At 1 April 2025 (Restated)*	-	178,608	2,519	4,491	185,618
Charge for the year	-	14,035	64	1,794	15,893
Disposals	-	(12,305)	-	(352)	(12,657)
At 31 March 2026	-	180,338	2,583	5,933	188,854
Net book value
At 31 March 2026	13,561	35,924	-	1,647	51,132

*The opening balances have been restated to reflect the correction of a prior year misstatement relating to the disposal of a part of the CLASS internally generated software. The asset was replaced in FY21-22, but the disposal was not processed until FY25-26. The adjustment has removed the cost of £5.7m and accumulated depreciation of £5.7m. As the asset was fully amortised prior to 1 April 2024 there is no impact on the net book value of internally generated software.

Following internal existence testing in FY25-26, asset disposals were identified within Internally Generated Software. New information was made available resulting in these assets being de-recognised. Of the £12.8m disposal cost, £4.3m is in relation to the disposal of the policy initiative for Higher Education Short Courses and £1.8m related to the Customer Portal element of academic year assets in which code is no longer in use and removed. The remaining disposals totalling £6.7m are made up of smaller values identified during internal existence testing.

Assets under Development balance and additions represent the ongoing internal development of SLC’s systems for the introduction of LLE which makes up around 92% of the year end balance.

The most significant transfer to Internally Generated Software relate to work on updating systems for 2025/26 academic year and to bring systems in line with Shareholder policy initiatives.

Of the £1,648,000 of Software Licences £604,000 relates to perpetual licences (2024-25: £406,000). One perpetual licence was purchase in 2025-26 (2024-25: £0) amounting to £198,000.

Carrying value of material intangible assets

Carrying value of material intangible assets	2025-26 Gross book value £’000	2025-26 Net book value £’000	2025-26 Average use life years	2024-25 Gross book value £’000	2024-25 Net book value £’000	2024-25 Average use life years
LA Portal	50,098	11,081	1.47	58,336	16,445	3.71
Customer Portal	45,009	6,075	1.19	50,078	9,320	3.48
Assess Platform	44,932	3,178	1.31	49,558	5,119	3.66
CLASS	22,342	5,367	1.92	23,724	4,254	3.57
FE Portal	10,704	1,776	1.60	12,258	2,876	4.00
ORS	11,950	2,951	2.36	10,420	3,441	4.04

The movement in gross book value reflects a number of disposals processed during 2025–26, together with enhancements to the methodology used to allocate costs to key systems, which resulted in in-year adjustments.

9 Financial Instruments

As the cash requirements of SLC are met through Grant-in-Aid, financial instruments play a more limited role in creating and managing risk than would apply to a non-public sector body. Most financial instruments relate to contracts to buy non-financial items in line with SLC’s expected purchase and usage requirements and SLC is therefore exposed to little liquidity or market risk. Credit risk exists for trade and other receivables, which are detailed in note 11.

Credit Risk

Credit risk arises from cash and cash equivalents, deposits with banks and other institutions. For banks and other institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.

Credit risk is the risk of financial loss to SLC if a customer fails to meet their contractual obligations.

The majority of other trade receivables comprise sums due from HEPs for the bursary administration service. The credit risk associated with these receivables is considered to be low, and therefore any expected credit loss is assessed as immaterial and not recognised. HEPs are considered low credit risk due various factors including strong financial management, diverse revenue streams, high demand and reputation, and government support.

Liquidity Risk

SLC’s net revenue resource requirements and capital expenditure requirements are financed by fees charged to universities and colleges and Grant-in-Aid funded by Parliament. SLC has been presented with a budget from DfE for FY2026-27 with the Annual Performance and Resource Agreement (APRA) letter expected in FY2026-27. These both provide assurance that funding of activities will continue. Cash requirements are presented to DfE on a monthly basis, and any cash flow requirements are met as they arise. SLC is therefore not exposed to any material liquidity risks.

Market and Currency Risk

SLC does not borrow or invest funds. Financial assets and liabilities are generated by day-to-day activities and are not held to manage the risks facing SLC in undertaking its activities.

The Financial Statements are presented in ‘Pound Sterling’ (£), which is SLC’s functional and presentation currency. SLC does not ordinarily enter foreign currency transactions.

The carrying value approximates to the fair value due to the short maturity of the instruments.

	2026 Book value	2026 Fair value	2025 Book value	2025 Fair value
	£’000	£’000	£’000	£’000
Trade receivables due within 1 year	7,064	7,064	6,666	6,666
Cash and cash equivalents	4,064	4,064	8,689	8,689
Trade payables due within 1 year	23,662	23,662	26,227	26,227
Trade payables due after 1 year	25,446	25,446	26,141	26,141

The maturity analysis of lease liabilities that shows the remaining contractual maturities are shown below.

Property	End Date of lease	Date of break clause(s)	2026 Lease liability £’000	2025 Lease liability £’000
Darlington Memphis Building	28/04/2033	27/04/2028 27/04/2033	6,330	7,135
Data Centre Co-Location	14/12/2027	N/A	520	853
Hillington	15/08/2030	N/A	697	39
Clyde Place	14/05/2043	N/A	19,620	19,735
Llandudno	31/03/2036	01/04/2031 01/04/2034	439	396
Hillington Storage Unit	15/02/2031	N/A	79	-
Total liability			27,685	28,158

The Bothwell Street lease lapsed in December 2023 and a new lease for Hillington Storage Unit was entered into in February 2026.

Obligations under leases for the following periods comprise:	2026 £’000	2025 £’000
Buildings
Not later than one year	3,204	2,989
Later than one year and not later than five years	11,427	13,491
Later than five years	20,681	19,910
Less interest element	(7,627)	(8,232)
Present Value of obligations	27,685	28,158
Analysed as:
Payables: amounts falling due within 1 year	2,239	2,017
Payables: amounts falling due after more than 1 year	25,446	26,141
Total	27,685	28,158

Liquidity risk arising from maturity dates is managed in line with the SLC’s approach to liquidity risk above.

As a lessor

SLC subleases a portion of its Clyde Place office under an operating lease. As an intermediate lessor, it retains rights under the head lease and remains exposed to risks associated with the subleased premises, including residual value and usage risks.

To manage these risks, SLC:

• Includes provisions to recover costs for excess usage or damage; and
• Periodically reviews market conditions and includes provisions in the sublease to periodically review rent in line with the terms of the head lease

Lease income from lease contracts in which SLC acts as a lessor is as below:

	2026	2025
Operating lease	£’000	£’000
Lease income	293	282

The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date.

	2026	2025
	£’000	£’000
Less than 1 year	293	283
One to two years	293	283
Two to three years	293	283
Three to four years	293	283
Four to five years	293	283
More than five years	2,196	2,409
Total undiscounted lease payments	3,661	3,824

Rent is reviewed annually for the sublease in line with the rent review provisions included in the head lease.

10 Trade and Other Receivables

	2026	2025
Amounts falling due within one year:	£’000	£’000
Other trade receivables*	7,064	6,666
Prepayments and accrued income	12,255	9,465
	19,319	16,131
Amounts falling due after more than one year:
Prepayments and accrued income	1,322	55
Total trade and other receivables	20,641	16,186

*includes vat receivable relating to Grant-in-Aid

11 Cash and Cash Equivalents

	2026	2025
	£’000	£’000
Balance at 1 April	8,689	10,134
Net increase/(decrease) in cash and cash equivalents	(4,625)	(1,445)
Balance at 31 March	4,064	8,689
The balances at 31 March were held at:
Government banking scheme accounts	4,064	8,689

As well as the £4.1m in the table above, at 31 March 2026 SLC had £144.1m (2024-25: £124.4m) held in trust on behalf of DfE. These are not SLC funds but are accessed by SLC as part of its function to service the loan book which is partly owned by HMG and partly owned by private investors. This cash balance, and any movements in year, are recorded, along with the value of the loans outstanding, in the accounts of the owners of the loan book. In addition, SLC also manages bursary payments to students on behalf of numerous Higher Education Institutions. These are not SLC funds but SLC accesses these in order to make disbursements in accordance with set payment arrangements to bursary recipients. As at 31 March 2026 these funds amounted to £3.8m (2024-25: £3.6m).

12 Trade and Other Payables

	2026	2025
	£’000	£’000
Amounts falling due within one year:
Trade payables	1,642	2,466
VAT*	4,534	5,043
Other taxation and social security	2,926	2,563
Accruals and deferred income	19,781	21,744
Lease liability	2,239	2,017
	31,122	33,833
Amounts falling due after more than one year:
Lease liability	25,446	26,141
Total trade and other payables	56,568	59,974

*The majority of the VAT payable relates to VAT on the April Grant-in-Aid invoice raised in late March.

13 Provisions

	Legal costs	Dilapidations	Deferred lease improvement	Redundancy Provision	Total
	£’000	£’000	£’000	£’000	£’000
At 1 April 2024	5	6,334	-	72	6,411
Arising in year	-	404	-	118	522
Amounts utilised	-	(45)	-	(72)	(117)
Amounts reversed unutilised	(5)	(30)	-	-	(35)
At 31 March 2025	-	6,663	-	118	6,781
Amounts falling due within one year	-	3,667	-	118	3,785
Amounts falling due after more than one year	-	2,996	-	-	2,996
	-	6,663	-	118	6,781

	Legal costs	Dilapidations	Deferred lease improvement	Redundancy Provision	Total
	£’000	£’000	£’000	£’000	£’000
At 1 April 2025	-	6,663	-	118	6,781
Arising in year	-	1,399	-		1,399
Amounts utilised	-	-	-	(110)	(110)
Amounts reversed unutilised	-	0	-	(8)	(8)
At 31 March 2026	-	8,062	-	-	8,062
Amounts falling due within one year	-	3,300	-	-	3,300
Amounts falling due after more than one year	-	4,762	-	-	4,762
	-	8,062	-	-	8,062

The provision for dilapidations represents the estimated settlement cost to SLC of the dilapidations clauses included in its property leases. These costs are expected to be incurred on the termination of the property lease. The provision has been made based on the best estimate using independent professional assessments.

14 Retirement Benefit Obligation

SLC Pension Scheme (closed scheme)

Until 1 March 2020, SLC operated the SLC Pension Scheme for all permanent staff. This scheme was a defined benefit scheme that provided benefits based on final pensionable salary. The assets of the scheme were held separately from those of SLC, being invested by the Trustees of the scheme.

At 29 February 2020, the SLC Pension Scheme closed to future accrual of benefits and most active members were transferred (‘bulk transfer’) to the Principal Civil Service Pension Scheme (‘nuvos’ section) on 1 March 2020 where they retained their salary link.

As at 31 March 2025 the pension deficit was £12.3m. Based on the latest actuarial valuation issued by Mercer on 17 April 2026, the deficit has increased by £0.2m to £12.5m.

No contributions are currently expected to be payable in respect of the scheme in the next reporting period.

Under the SLC Pension Scheme rules, if the actuary certified that there is sufficient surplus in the scheme, the trustees may be liable to pay all or part of the surplus to the employer, however this is subject to specific funding rules. In the event of a deficit position, the position will be as provided for in the formal Transfer Agreement among DfE, SLC and the SLC Pension Trustee. The Scheme actuary would have to certify that the scheme liabilities are fully funded under an actuarial valuation conducted under the Pensions Act 1995 (as amended) and SLC does not propose to request a refund given that is not the current position of the Scheme.

The scheme exposes SLC to actuarial risks including longevity, inflation, discount rate and investment risk. In addition, there is uncertainty associated with the planned transfer of the scheme to DfE, including the timing and valuation of the final transfer, which may impact the final settlement position.

The following disclosures relate to the SLC Pension Scheme.

A reconciliation of the scheme movements to the Statement of Financial Position is given below:

Reconciliation to Statement of Financial Position	2026		2025
	£’000	£’000	£’000	£’000
Opening pension net (asset) / liability		12,290		19,665
Administrative expenses		387		302
Interest costs (income)		742		971
Actuarial (gain)/loss in fair value of plan assets	644		(199)
Actuarial (gain) / loss in defined benefit obligation:
- effect of changes in demographic assumptions	256		(112)
- effect of changes in financial assumptions	(1,879)		(8,379)
- effect of experience adjustments	87		42
Total actuarial (gain) / loss		(892)		(8,648)
Net (assets) / liability as at 31 March		12,527		12,290

The SLC Pension Scheme closed to future accrual on 29 February 2020. There is an agreement in place with the Cabinet Office and HM Treasury that the residual parts of the SLC Pension Scheme (being deferred members and pensioners) are transferred to the CSPA.

As reported in previous Annual Report & Accounts, the intended pension transfer of deferred/pensioner members, was put on hold pending the final outcome of the Virgin Media Limited v NTL Pension Trustees II Limited court case in light of its potential impact on all pension schemes contracted out of the additional state pension between April 1997 and April 2016. Following the final outcome of the Virgin Media case, an initial assessment has been undertaken, which remains ongoing. Whilst the investigations into the potential impact to benefits (and associated accounting liabilities) remains ongoing with the Pension Trustee, DfE and HMG colleagues, SLC are not yet in a position to formally determine if any financial impacts may be material or otherwise. The initial analysis however is that there are no matters that will provide a barrier to the still intended pension transfer of deferred/pensioner members to the Civil Service Pension Scheme, which SLC are continuing to progress with DfE and the Pension Trustee, with at present an identified timing for such a transfer being 2027.

Effect of changes in Financial Assumptions has moved by £6.5m since FY2024-25 primarily from an increase to the discount rates applied. For information the benefit obligation at 31 March 2026 was £42.9m (31 March 2025 £43.2m).

Net defined (asset) / liability reconciliation	2026 £’000	2025 £’000
Opening net defined benefit (asset) / liability	12,290	19,665
Defined benefit cost included in Statement of Comprehensive Net Expenditure	1,129	1,273
Total re-measurements included in Statement of Comprehensive Net Expenditure	(892)	(8,648)
Net (asset) / liability
Amounts recognised in the Statement of Financial Position	12,527	12,290
Present value of funded obligations	42,941	43,212
Fair value of plan assets	30,414	30,922
Net (asset) / liability	12,527	12,290

The defined benefit obligations are estimated based on the projected unit cost method. They have been rolled forward from the results of the scheme’s statutory funding valuation as at 5 November 2022 to 31 March 2026.

Change in defined benefit obligation	2026 £’000	2025 £’000
Benefit obligation as at 1 April	43,212	50,708
Interest costs	2,533	2,448
Benefits paid	(1,268)	(1,495)
- effect of changes in demographic assumptions	256	(112)
- effect of changes in financial assumptions	(1,879)	(8,379)
- effect of experience adjustments	87	42
Total actuarial (gain) / loss	(1,536)	(8,449)
Gain on settlement at transfer of pension fund	-	-
Benefit obligation as at 31 March	42,941	43,212

Change in fair value of plan assets	2026 £’000	2025 £’000
Fair value of plan assets as at 1 April	30,922	31,043
Interest income	1,791	1,477
Benefits paid	(1,268)	(1,495)
Administrative expenses	(387)	(302)
Actuarial gain / (loss)	(644)	199
Fair value of plan assets as at 31 March	30,414	30,922

Components of defined benefit cost	2026		2025
	£’000	£’000	£’000	£’000
Interest cost	2,533		2,448
Interest (income) on plan assets	(1,791)		(1,477)
Total net interest cost / (income)		742		971
Administrative expenses		387		302
Defined benefit cost included in Statement of Comprehensive Net Expenditure		1,129		1,273
- effect of changes in demographic assumptions	256		(112)
- effect of changes in financial assumptions	(1,879)		(8,379)
- effect of experience adjustments	87		42
Return on plan assets (excluding interest income)	644		(199)
Total re-measurements		(892)		(8,648)
Total recognised in the Statement of Comprehensive Net Expenditure		237		(7,375)

There are no active members in the SLC Pension Scheme, the table below shows the analysis of the defined benefit obligation by remaining member type:

Defined benefit obligation by participant status	2026 £’000	2025 £’000
Vested deferral	31,096	30,909
Retirees	11,845	12,303
Total	42,941	43,212

Due to the paused transfer of assets and liabilities to the Civil Service Pension Scheme, assets held on behalf of the remaining scheme are now split 93% debt instruments and 7% cash and cash equivalents.

Fair value of plan assets	2026 £’000	2025 £’000
Debt instruments	28,270	-
Cash and cash equivalents	2,144	30,922
Total	30,414	30,922
Actual return on plan assets	1,147	1,676

The assumptions used to determine the actuarial calculations are shown below. The valuation methodology remains consistent with prior years.

Weighted average assumptions used to determine benefit obligations	2026 %	2025 %
Discount rate	6.30	5.95
Rate of price inflation (RPI)	3.20	3.00
Rate of price inflation (CPI)	2.95	2.75
Deferred pension increase rate (pre-/post-2009)	2.95/2.50	2.75/2.50
Rate of increase of pension in payment	2.90	2.80

Weighted average life expectancy for mortality tables used to determine benefit obligation	2026 Years	2025 Years
Male member age 65 (current life expectancy)	20.6	20.2
Male member age 45 (Life expectancy at aged 65)	21.9	21.5
Female member age 65 (current life expectancy)	22.9	22.7
Female member age 45 (Life expectancy at aged 65)	24.8	24.6

Weighted average assumptions used to determine benefit cost	2026 %	2025 %
Discount rate	5.95	4.90
Rate of price inflation (RPI)	3.00	3.00
Rate of price inflation (CPI)	2.75	2.70
Deferred pension increase rate (pre-/post-2009)	2.95/2.50	2.75/2.50
Pension-in-payment increase rate	2.90	2.80

Weighted average life expectancy for mortality tables used to determine benefit obligation (Mortality)	2026	2025
Post-retirement male mortality assumption	S3PMA CMI 2025 1.5% with Sk = 7, weightings of 127% for non-pensioners and 122% for Pensioners	S3PMA CMI 2023 1.5% with Sk = 7, weightings of 126% for non-pensioners and 121% for pensioners
Post-retirement female mortality assumption	S3PFA “Middle” CMI 2025 1.5% with Sk = 7, weightings of 112% for non-pensioners and 114% for pensioners	S3PFA “Middle” CMI 2023 1.5% with Sk = 7, weightings of 112% for non-pensioners and 113% for pensioners

The weighted average duration of the defined benefit pension obligation is 17 years compared to 18 years at last year end.

The funded status of the scheme and the amounts recognised as a liability as at 31 March 2026 are compared to the corresponding amounts given a range of sensitivities below.

Sensitivity analysis

The sensitivity analysis below shows the impact of reasonably possible changes in key assumptions on the defined benefit obligation at the reporting date.

The sensitivities have been prepared by the Scheme actuary and reflect changes to individual assumptions, with all other assumptions held constant.

Assumptions may be interrelated and changes in one assumption may be accompanied by changes in others. The sensitivities illustrate the impact of changes in individual assumptions and do not reflect changes occurring together.

Inflation sensitivities reflect a 0.25% per annum change in the RPI assumption, with corresponding changes applied to CPI and other inflation-linked assumptions, rather than an equivalent uniform change applied independently to each assumption.

Sensitivities from Base - Analysis of amounts recognised in the SOFP

	2025 £’000	2026 £’000	Minus 0.50% discount rate £’000	Plus 0.50% discount rate £’000	Minus 0.25% inflation rate £’000	Plus 0.25% inflation rate £’000	Mortality: Minus one-year age rating £’000
Fair value of plan asset	30,922	30,414	30,414	30,414	30,414	30,414	30,414
Defined benefit obligation	43,212	42,941	46,451	39,813	42,048	43,866	44,075
Funded status	12,290	12,527	16,037	9,399	11,634	13,452	13,661

Sensitivities on actuarial assumptions

	2025 %	2026 %	Minus 0.50% discount rate %	Plus 0.50% discount rate %	Minus 0.25% inflation rate %	Plus 0.25% inflation rate %	Mortality: Minus one year age rating %
Discount rate	5.95	6.30	5.80	6.80	6.30	6.30	6.30
Rate of RPI assumption	3.00	3.20	3.20	3.20	2.95	3.45	3.20
Rate of CPI assumption	2.75	2.95	2.95	2.95	2.70	3.20	2.95

Civil Service Pension Scheme Arrangements

On 1 March 2020, SLC became a member of the Civil Service Pension Arrangements. Employees may participate in the alpha defined benefit scheme or the partnership defined contribution scheme. Employees who are not members are automatically enrolled into alpha at their next re-enrolment date.

These schemes are unfunded multi-employer arrangements; no pension assets or liabilities are recognised in SLC’s financial statements. Employee contributions are salary related. Further details can be found at www.civilservicepensionscheme.org.uk.

Employer contributions for 2025–26 are payable at a rate of 28.97% of pensionable earnings for the alpha scheme and between 8.0% and 14.75% for the partnership scheme, depending on age. Contributions to NOW: Pensions remain at the statutory minimum of 3% employer and 5% employee.

On 1 December 2025, administration of the Civil Service Pension Scheme transferred to Capita. This does not affect the accounting treatment of pension contributions.

15 Capital and Other Financial Commitments

15.1 Capital Commitments

At 31 March SLC had placed contracts for the purchase of the following:

	2026 £’000	2025 £’000
Tangible fixed assets	28	56
Intangible fixed assets	-	4
Software licences	-	-
Total	28	60

15.2 Other Financial Commitments

At 31 March SLC had placed contracts for the purchase of the following:

	2026 £’000	2025 £’000
Software licences
Not later than one year	3,650	4,216
Later than one year and not later than five years	1,033	1,327
Later than five years	-	-
Software-as-a-Service
Not later than one year	3,751	5,339
Later than one year and not later than five years	-	-
Later than five years	-	-
Total	8.434	10,882

The above tables are represented to meet disclosure requirements.

16 Contingent liabilities

SLC holds one contingent liability of £0.22m relating to a claim dismissed by the High Court but was subsequently appealed. The Court of Appeal has remitted the case for further consideration, and the matter remains ongoing.

17 Called up Share Capital

	2026 £	2025 £
Authorised
200 ordinary shares of 50p each	100	100

Allotted, called up and fully paid
20 ordinary shares of 50p each	10	10

18 Controlling Parties

SLC is owned by the Secretary of State for Education, the Welsh Ministers, the Scottish Ministers and the Minister for the Economy in Northern Ireland. The Secretary of State for Education is the majority shareholder, in which SLC’s results are consolidated into their Annual Report and Accounts.

19 Related Party Transactions

SLC is a NDPB that is funded by the bodies detailed in notes 1.1 and 19 to the financial statements. Those funding bodies are regarded as related parties.

SLC has taken the exemption from the disclosures required by IAS 24 para 18 in relation to related party transactions and outstanding balances, with other entities that are a related party because the same government has control or significant influence over both. SLC are consolidated into DfE’s financial statements which are publicly available.

During the year, SLC had various material transactions with the above departments in the form of Grant-In-Aid funding received which is detailed in the Statement of Changes in Taxpayers’ Equity, and Statement of Cashflows respectively. In addition, SLC has had a small number of transactions with other government departments and other central government bodies including DWP, HMRC, Cabinet Office, and the Home Office. We also make pension contributions into public sector pension schemes.

Dependants of Directors, executive management and staff who are students are eligible to participate in the student loans scheme on the same terms and conditions as are available to other students. During the period, certain Non-Executive and Executive Directors held the following positions with higher education providers with which SLC transacts for student funding or bodies which are closely associated with higher education.

• The former Chair, Mr Peter Lauener, is Chair of Orchard Hill College & Academy Trust.
• Ms Charlotte Moar (until May 2025) is a Council Member at the University of Bath, an independent member of the Audit and Risk Committee at DfE and an independent member of the Audit and Risk Committee at HM Revenue & Customs (from September 2024).
• Mr Stephen Marston is a Non-Executive Board Member at University of Derby, Non-Executive Board member of the Commission for Tertiary Education and Research (“CTER”), Chair of the CTER Quality Committee and Chair of the Corporation Board of South Hampshire Colleges Group.
• Ms Janette Campbell is a Non-Executive Director and Chair of Audit & Risk Committee at University of the Highlands and Islands.

	2026				2025
	Expenditure	(Income)	(Payable)	Receivable	Expenditure	(Income)	(Payable)	Receivable
	£	£	£	£	£	£	£	£
Other education sector bodies
Royal College of Art	-	(215)	-	68	-	(67)	-	67
University of Bath	-	-	-	-	125	(7,751)	-	7,751
University of Bristol	-	(36,507)	-	11,393	-	(11,162)	-	11,162
University of Derby	-	(26,977)	-	13,286	-	(13,307)	-	13,307
University of Greenwich	-	(31,476)	-	-	-	-	-	-
University of the Highlands & Islands	-	(232)	-	76	-	(81)	-	81
University of Southampton	3,500	(34,199)	-	15,186	-	-	-	-
University of the West of England (UWE)	-	(57,802)	-	20,702	-	-	-	-

In addition to the above related party disclosure, a register of interests for Non-Executive and Executive Directors is held by SLC and is available upon request. All amounts include vat.

Compensation for key management personnel is disclosed in the Remuneration and Staff Report.

20 Statement of Loans Administered by SLC

Funding for the purpose of making loans to students is received by SLC from DfE, the Welsh Government, the Scottish Government and the Department for the Economy in Northern Ireland.

As at 31 March 2026 the total face value of the loan portfolio administered by SLC on behalf of the funding bodies was £324.8bn, (31 March 2025: £294.1bn), which excludes all non-repayable student support.

21 Prior year adjustment

During the year, the Department identified a prior year error relating to the accounting treatment of a CLASS internally generated intangible asset.

The asset was superseded by a subsequent CLASS enhancement that was brought into service in FY21-22. However, the original asset was not derecognised at that time and remained recognised on the statement of financial position until its disposal was processed in FY25-26.

Management concluded that the asset should have been disposed of in an earlier period. The asset had an original cost of £5.7m and became fully amortised in FY22-23, resulting in a nil net book value from that point onwards.

In accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, as applied by the FReM, the prior year error has been corrected retrospectively. The correction has been reflected through the restatement of the opening cost and accumulated amortisation balances at 1 April 2024 within Note 8 – Intangible assets.

As the asset was fully amortised prior to 1 April 2024, the restatement has no impact on the net book value of intangible assets, the statement of comprehensive net expenditure, or taxpayers’ equity. As there is no change to the statement of financial position at 1 April 2024, a third statement of financial position has not been presented.

22 Events after the Reporting Period

There have been no material events after the reporting period that require disclosure or adjustment.

The Accounting Officer authorised these accounts for issue on the date the independent auditor’s report was signed by the Comptroller and Auditor General.