The Budget has not reversed the freeze on the Plan 2 student loan repayment threshold, MoneySavingExpert reports. The threshold stays at £29,385 a year despite a pre-Budget campaign by MPs and peers.
The freeze was announced in Rachel Reeves's 2025 Budget. Graduates on Plan 2 repay 9% of their earnings above the threshold. Plan 2 covers English students who started university between 2012 and 2022 and Welsh students since 2012, according to MoneySavingExpert.
Sources differ on how long the freeze lasts. MoneySavingExpert says it is set to run until 2029. A Substack education analysis says the £29,385 threshold applies until 2030. We have not been able to settle which is correct.
The same analysis notes that student loans did not feature in the Budget at all, although the Education Secretary, Lucy Powell, had called the system "broken and unfair". It says a full-time worker on the National Living Wage earns about £27,400 a year after the rise, and that the minimum wage and the frozen threshold would converge in 2030. That projection has not been independently checked.
Martin Lewis has previously called the freeze "immoral and a breach of natural justice", MoneySavingExpert reports.