Martin Lewis asks the Chancellor: 'Why haven't you overturned the morally reprehensible Plan 2 student loan threshold freeze?'

Watch: Martin Lewis to the Chancellor: 'Why haven't you overturned what your predecessor did?'

From The Martin Lewis Money Show Live on Thursday 29 October 2026 courtesy of ITV. All rights reserved. Watch the full episode on ITVX.

'It's morally reprehensible and a breach of natural justice'

Below is a full transcript of what Martin said on the show, including his interview with the Chancellor.

Martin Lewis (on ITV's The Martin Lewis Money Show Live): "Rachel Reeves announced last year that the threshold where you repay 'Plan 2' student loans – which is mainly people who started university in England between 2012 and 2023, and from Wales from 2012 onwards – will be frozen from 2027 to 2030 at £29,385 a year. You repay 9% of everything above that.

"So if you think about this for a second, somebody who was earning here in 2027, but because of income rises, even at the rate of inflation, would be pushed up here – suddenly, they're repaying their student loan they wouldn't have otherwise repaid.

"Someone here, who's now here, will be paying more student loan than they would have otherwise. This was always promised to go up with average earnings. I spoke to the Chancellor about this..."

Martin (to the Chancellor): "I'm going to go to Matt's question. This wasn't mentioned in the Budget yesterday. You'll know where it's going because I've been campaigning on it.

"Matt says, 'I'd love to know...' I've had a lot of questions like this. 'I'd love to know why the Plan 2 threshold freezes have not been scrapped. Roughly five million of us signed up to an agreement, often aged 18, where the thresholds would rise year on year. It was with average earnings. It is a disgrace.'

"I'm going to go stronger. I think it's morally reprehensible and a breach of natural justice that the Government is unilaterally changing the terms of a contract that was signed by Government with 18-year-olds. Why haven't you overturned what your predecessor did?"

The Chancellor: "Look, I get that. I know people, youngsters that are really trying to make their way. People who..."

"It's a big generational problem"

Martin: "It's a big generational problem."

The Chancellor: "And it's a challenge for a whole generation. I simply haven't been able to do action I might have wanted to take at this Budget. And part of that is, look, people are feeling the pressure on their household budgets. Governments are at the moment.

"A lot of this is driven, as the formal forecaster of the Office of Budget responsibility said yesterday, by the Middle Eastern conflict and other trade tensions. I'm dealing with, quite honestly, I'm dealing with the pressures I've got. There's a range of things I'd like to be able to look at and change.

"But in this Budget, I had to concentrate on what was most important, most immediate, and that was help to households facing big energy bills through the winter, taking some of the cost-of-business pressures off."

'There's a knock-on effect for the 30 years of repaying the student loan'

Martin: "But you do understand, each year you keep the freeze is not just an increase for that particular year, there's a knock-on effect for the 30 years of repaying the student loan.

"So it could eventually cost some low- to middle-earners thousands of pounds. So I know you haven't done it 'yet', but the 'yet' makes a difference. If it's one year later, it makes a difference."

The Chancellor: "You said do I understand that? Yes."

Martin: "OK. Well, people will make their own judgements on that."