Every week, we pull together the most relevant stories for your personal finances.
🎓 New data reveals most graduates on "Plan 2" student loans will never pay them off - is this you?
🏛️ Just months before pension pots become liable for inheritance tax - here's how people are already planning around it
📊 Your credit score is about to change dramatically (even if nothing about you has) - here's what matters
🗣️ This week we asked a coach: My daughter graduated a few years ago and her student loan balance keeps going up even though she pays every month - are we missing something?
New data from the Department for Education, published in response to the House of Commons Treasury Committee, shows most graduates on the "Plan 2" student loan (English students who started university between 2012 and 2022) are unlikely to ever clear their balance.
A Plan 2 borrower earning £45,000–£50,000 five years after repayments begin is more likely than not to eventually repay their loan in full. At £30,000–£35,000, the chance falls to around 25%.
Overall, only around 32% of the 2022/23 Plan 2 cohort are expected to repay their loans in full. For newer Plan 5 borrowers, the figure is around 55%.
There’s another number worth knowing. The average Plan 2 balance is currently £52,100, and someone with that balance would need to earn around £63,600 in 2026/27 just for their repayments to exceed the interest being added.
That can make a rising balance look alarming. But for most people, the balance itself isn’t the most useful number to focus on.
Plan 2 repayments are based on income: 9% of earnings above £29,385. If our income falls, repayments fall too. Any remaining balance is normally written off after 30 years.
Student loans also don’t appear on credit reports or affect credit scores, although lenders can take the monthly repayments into account when assessing affordability for something like a mortgage.
So it can be more helpful to think about the impact on our monthly income than to treat the balance like a conventional loan that has to be cleared as quickly as possible.
Overpaying may be worth exploring for higher earners who are likely to repay the full balance before it is written off. For many other borrowers, putting spare money towards an emergency fund, pension or other savings could be more valuable.
Worth knowing:
This specifically affects "Plan 2" loans - for English students who started university between 2012 and 2022. If you started from 2023 onwards, you're on "Plan 5", which has a lower repayment threshold (£25,000) but a lower interest rate and better odds of repaying overall - the two systems are different enough that it's worth checking which one you or your child is actually on.
Not sure which student loan plan you're on or what your repayments mean for your wider finances? A Bippit coach can help you make sense of it and explore your options.
From 6 April 2027, most unused pension funds and pension death benefits will count towards the value of an estate for inheritance tax.
That’s a significant change for people who have deliberately planned to spend other assets first and leave their pension to family.
Hargreaves Lansdown recently surveyed 2,000 people. It found that 6% already expected to face an inheritance tax bill that could increase under the new rules, while another 9% now think they could face one.
Among those expecting an inheritance tax liability, 24% said they were considering taking tax-free cash from their pension and gifting it, while 44% were considering gifts from income or other assets.
If part of our retirement or estate plan has been to leave a pension untouched and pass it on to family, it’s worth reviewing that plan before April 2027.
It doesn’t automatically mean we should start withdrawing or gifting money. Pensions remain an important source of retirement income, and giving assets away has consequences of its own.
But there are existing inheritance tax allowances worth understanding.
Most people can give away up to £3,000 each tax year using the annual gifting exemption. There is also a £250 small-gift exemption, subject to certain conditions, and separate allowances for wedding or civil partnership gifts.
Regular gifts made from surplus income can also be exempt from inheritance tax, with no fixed monetary limit, provided they come from normal income and leave enough to maintain our usual standard of living.
The important point is that estate planning is becoming more connected to pension planning.
If pensions make up a significant part of our wealth - particularly if our overall estate could face inheritance tax - it makes sense to understand the numbers before the rules change rather than afterwards.
Worth knowing:
There isn’t one gifting rule that works in every situation. Larger gifts that don’t qualify for an exemption can remain relevant for inheritance tax for seven years, while other exemptions have their own conditions. Earlier planning generally gives us more options - but it shouldn’t mean giving away money we may later need.
TransUnion, one of the UK's three main credit reference agencies, is overhauling how it scores people's credit files - moving from a 0-710 scale to a new 0-999 scale, with the rollout happening gradually between now and June 2027.
The bands are being renamed too: "poor" and "very poor" become "low" and "very low," and the boundaries are shifting substantially - what used to be an "excellent" score (628-710) becomes 786-999 on the new scale.
If our TransUnion score suddenly looks very different over the coming months, it doesn’t necessarily mean anything has changed with our finances.
The scoring system itself has changed. During the rollout, some people may even see two different TransUnion scores depending on which service they use.
More importantly, the headline credit score we see has never been the whole story. Lenders look at the information behind our credit report - things such as repayment history, existing borrowing and recent credit applications - alongside their own lending and affordability criteria.
TransUnion has confirmed that the underlying credit information shared with lenders isn’t changing simply because of the new scoring system. So rather than worrying about the number alone, it’s worth checking the actual credit report.
Look for anything that doesn’t seem right: an old account that should be closed, an incorrect address, an unfamiliar application or a payment marked as missed when it wasn’t. Those details are usually more important than whether our headline number has moved from one scoring band to another.
Not sure what your credit report is telling you or what could be affecting your ability to borrow? A Bippit coach can help you understand your credit and your options.
Nothing's gone wrong - this is actually how the Plan 2 student loan is designed to work for a lot of people, even though it feels counterintuitive. Interest is added to the balance every year, and for anyone whose repayments - fixed at 9% of income above £29,385 - don't cover that year's interest, the total balance grows rather than shrinks.
New government data actually shows this is the norm rather than the exception: only around a third of people on Plan 2 loans are ever expected to repay them in full before they're written off after 30 years.
The number worth watching isn't the balance, it's the monthly repayment and whether it's manageable against her current income - because that's what she'll actually feel, and it adjusts automatically if her salary changes.
The balance itself is really more of an accounting figure that determines when, if ever, the loan gets paid off versus written off; it has no bearing on her credit file and doesn't affect anything else she wants to borrow for, like a mortgage.
My suggestion: try to separate how the balance looks from how it actually behaves day to day. If she's earning comfortably above the threshold and the repayment feels manageable, there's genuinely nothing to fix here.
And if you want a proper look at whether overpaying would ever make sense for her specific numbers, that's exactly the kind of question worth bringing to a coach.
My student loan balance keeps growing even though I pay it every month - should I be worried, or is that normal?
I've been planning to leave my pension to my kids tax-free - what should I be thinking differently about now that's changing?
My credit score just changed a lot and I don't know why - is that something I need to act on?
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