Philip Hammond will offer help to tens of thousands of graduates who have paid off their student loan in Wednesday’s Budget.
The Chancellor will promise to fix a glitch in the tax system which means loan repayments continue to be taken for up to 12 months after the loan is paid off.
Some 86,000 graduates overpaid an average £592 in 2015/16 after their debt had been satisfied, with the Treasury admitting getting the money back can be a “lengthy process."
Hammond will announce a new system in which HM Revenue & Customs and the Student Loans Company will stop deductions as soon as the loan is paid off. The action will be introduced by April 2019.
Meanwhile, the Chancellor is under pressure from motorists not to add additional tax on petrol and diesel in the forthcoming Budget.
Campaign group FairFuelUK said that more than 30,000 supporters had emailed the Chancellor demanding he not hit families and businesses "struggling to make ends meet" to burnish his Budget with green credentials.
The mass email warned that raising fuel taxes or vehicle excise duty for diesel vehicles would "hit the most vulnerable who have no other choice and simply can't afford to upgrade their vehicles to newer models."
"We already pay the highest fuel duty in the world for diesel and the third highest for petrol. So, please don't increase the tax on diesel just to look green," the email said.