Martin Lewis slams 'immoral' student loan repayment decision giving millions in UK smaller payslip

MoneySavingExpert mastermind Martin Lewis is not at all pleased with the UK government right now.

Earlier this summer, the economic hero hit out after it was revealed that the student loan repayment Plan 2 (for those who started university between 2012 and 2022) was having its payment threshold temporarily frozen.

Chancellor of the Exchequer, Rachel Reeves, confirmed that repayments were being stopped at £29,385 for three years from April 2027, but as a result, graduates will be coughing up nine per cent of everything they earn above this amount.

And even though MPs are suggesting there's a 'moral obligation' to reverse this decision, Lewis will not advocate for these 'small crumbs' of progress as he calls them.

Together with MoneySavingExpert, he'd submitted evidence to the Treasury Select Committee's report, arguing that this freezing of debt breached natural justice while also forwarding some recommendations of his own.

We might have to dip into those piggy banks (Getty Stock)

Martin Lewis' response to the government's new pledge to prospective university students

Lewis called the response 'very disappointing' and said it 'does little to help the millions of students already struggling with student loans'.

"Most urgently, it doesn't address the coming immoral freeze of the Plan 2 repayment threshold, by Rachel Reeves, due to start next April," he added.

Essentially, Lewis claims those on Plan 2 loans will have to 'pay more each year' which the expert slammed as 'immoral', 'because it is a negative retrospective change of terms to loan contracts students, often aged 18, signed up to'. Something 'no commercial firm would be allowed to do'.

Lewis also expressed disappointment at the Government's 'rejection' of the Committee's suggestion that 'fairness' protections that apply to commercial loans also apply to student loans.

And thirdly, Lewis criticised the government for displaying double standards - using a higher measure of inflation, the Retail Prices Index (RPI), to maximise its income, but using a lower measure, Consumer Price Index (CPI), to minimise its expenses.

Lewis resolved: "Of course, I welcome the small crumbs it has given that at least future students will be told in plain English, before they sign up, that the amount they repay can be altered after the event.

"But let's be clear: better information for future students will not fix the existing Plan 2 student loan crisis. The repayment threshold needs to rise, interest needs to fall, maintenance support needs uprating, and the whole system needs a fundamental reset."

Martin Lewis is the go-to guy when it comes to saving the pennies (HGL/GC Images)

As we cruise up to the colder months on the calendar, Lewis even has the answer to the question: is it cheaper to keep my heating at all times or just as and when I need to?