Committee publication · Correspondence · 19 May 2026

Correspondence from the Interim Chair of the UK Statistics Authority on student loans, dated 14 April 2026

Inquiry: Student loans and taxation of graduates

Summary

Penny Young, Interim Chair of the UK Statistics Authority, responds to the Treasury Committee's call for evidence on whether student loan interest should be linked to RPI, CPI, or another inflation measure. The Authority states that while indexation decisions are for Government, RPI is not a good measure of inflation and should be discontinued. The Authority plans to reform RPI by aligning it with CPIH methodology by February 2030.

Key findings

RPI has systematically over- and underestimated inflation rates due to methodological flaws including the 'Carli' formula, treatment of owner-occupier housing costs, and goods/services weighting.
The Authority recommended in March 2019 that RPI publication be stopped and interim shortcomings addressed by bringing CPIH methods into RPI.
Government and Authority agreed in November 2020 that RPI reform aligning it with CPIH could be legally and practically implemented by February 2030.
Three main inflation measures serve different purposes: CPI/CPIH (comprehensive economic measures), HCIs (household-specific costs), and RPI (legacy statutory measure).
The Authority is statutorily required to maintain RPI but must seek Chancellor consent for methodological changes, creating unique institutional constraints.

Tone

Factual

Topics

public-financeinflation-measurementstudent-loansstatistical-methodology

Key actors

Penny Young, Dame Meg Hillier, Sir David Norgrove, UK Statistics Authority, Office for National Statistics, Treasury Committee

Notable line

“The RPI, however, is not a good measure of inflation, and we strongly discourage its use.”

Key Quotes

“The RPI, however, is not a good measure of inflation, and we strongly discourage its use.”
— Penny Young · Opening position on RPI as inflation measure for student loans

“The RPI has at times greatly overestimated, and at other times underestimated, the rate of inflation.”
— Penny Young · Explaining systematic failings of RPI methodology

“It is a decision for Government how student loan interest should be set, including whether and how it should be linked to inflation.”
— Penny Young · Clarifying the Authority's role versus Government responsibility

“Our policy is to address the shortcomings of the RPI in full at the earliest time we are able.”
— Penny Young · Authority's commitment to RPI reform

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Source · parliament.uk record ↗