Martin Lewis has shared his “regret” over his on-air row with Conservative Party leader Kemi Badenoch over the student loan crisis, while warning millions of graduates face a stealth tax next year.
Earlier this week, Ms Badenoch was interviewed on ITV’s Good Morning Britain over the Tories’ policy proposal to slash the interest charged on Plan 2 student loan repayments.
However, her segment was interrupted by Mr Lewis, who asserted that politicians should be focusing on addressing the salary repayment threshold for when graduates have to repay.
Shortly after the live debate, the host of The Martin Lewis Show Live apologised to the Opposition Leader on social media and later met with her in-person to discuss the issue in private.
Martin Lewis: ‘I disappointed myself’
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GMB / ITV
During an appearance on BBC Radio 5 yesterday, Mr Lewis reiterated his apology to Ms Badenoch and broke down what needs to be tackled to remedy the student loan crisis.
He said: “I’m pretty disappointed with myself as you may know. I was hearing a conversation about myself on Good Morning Britain, and I interrupted the Leader of the Opposition (LOO).
“I regret it. It was unfair to do that, even to the LOO. The content I don’t regret, but I hold myself to better standards than that. I went to meet her yesterday and had a really good chat about student finance too. I was really pleased I was able to apologise in private properly.”
During the discussion, the financial journalist tackled Plan 2 student loans, which is the repayment plan for people from England and Wales who were in higher education between 2012-12 and the 2023-24 academic years.
Kemi Badenoch spoke on GB News | GB NEWS
Plan 2 student loans will remain frozen at £29,385 for three years | GETTY
He added: “There are three main elements that work in combination in any student loan: the repayments, when it [the debt] wipes , and the amount you borrow in interest.
“On Plan 2 student loans, you repay nine per cent on everything you earn above £28,500. Effectively, it’s nine per cent additional payments, and the most important thing to understand is that what you pay each year is solely dictated by what you earn in the threshold.
“One of the big contentious things at the moment, while the threshold will go up next year, next year the Chancellor said it will be frozen. That works like a fiscal drag on tax.”
Fiscal drag is the phenomenon used to describe when tax thresholds are frozen over an extended period of time, while incomes or inflation rise; resulting in Britons being pulled into higher brackets.
Martin Lewis is tackling issues resulting from student loan debt | ITV
Under Plan 2 student loan repayments, debt is officially wiped after 30 years from when someone starts repaying, with around 5,8 million individuals currently on this scheme.
Mr Lewis shared: “If you have someone who only earns £20,000 a year, they will never earn above the threshold, never repay a penny; never mind paying any interest. So the interest is irrelevant to them, even though they see it on their statement.
“On the other hand, you have those people who will pay the interest because they will pay over the 30-year period, and the sour spot here is those who will repay in almost exactly 30 years because they will pay more.”
On X, Ms Badenoch wrote: “Martin and I don’t agree on everything but we know that graduates are being shafted by the current system, and we both care enough to try and change it. And unlike Keir Starmer, Martin is willing to listen. Once again Starmer didn’t answer any of my questions on student loans earlier today in PMQs.”