Reeves Defends Frozen Plan 2 Threshold as Fair and Proportional
Chancellor Rachel Reeves argues the three‑year freeze of the Plan 2 student‑loan repayment threshold to £29,385 from April 2027 is fair and aligns repayment systems, despite critics who say it treats loans like a tax. The current threshold is £28,470; the freeze would push higher earners into larger repayments and, with Plan 2 interest at RPI plus up to 3%, could raise the overall cost for borrowers. Reeves also extends the freeze on income tax and National Insurance thresholds, noting Plan 2 loans were introduced with higher university fees between 2012 and 2023. The debate centers on fairness and the impact of inflation on borrowers.