Photo by Georg Eiermann on Unsplash
Today's UK finance news: student loan rates rising despite caps, record green energy uptake, and £1bn in unclaimed child trust funds.
Photo by Georg Eiermann on Unsplash
UK households are grappling with rising costs and changing financial landscapes today. From student loan interest rates defying government caps to record numbers investing in green energy, here's what's moving in personal finance.
Plus, there's a reminder about £1 billion sitting unclaimed in child trust funds for young adults turning 18.
The government's decision to cap student loan interest at 6% for 2026-27 may sound like good news, but many borrowers will actually face higher charges from autumn. The culprit? Surging inflation driven by the ongoing Iran conflict, which is pushing up the baseline rates that feed into student loan calculations.
Higher earners will benefit most from the 6% cap, but the majority of graduates are likely to see more interest added to their loans than they're currently paying. This creates a frustrating situation where government intervention helps some whilst leaving others worse off due to broader economic pressures.
If you have student loans, check your current interest rate and compare it to what you might pay from September. Consider whether making voluntary repayments now could save you money long-term.
British households are rushing to install solar panels, heat pumps, and buy electric vehicles in record numbers as energy suppliers report unprecedented demand since the Iran war began on 28 February. With energy bills expected to rise 18% from July under the new price cap, families are looking for ways to reduce their dependence on grid electricity and gas.
The shift represents a significant change in consumer behaviour, with households viewing green technology not just as environmentally responsible but as essential financial protection against volatile energy markets. Solar panel installations and heat pump enquiries have particularly surged as homeowners seek to lock in lower long-term energy costs.
If you're considering green energy upgrades, factor in government grants and schemes that can reduce upfront costs. See our remortgage guide if you're thinking of releasing equity to fund home improvements.
Young adults born between September 2002 and January 2011 have access to child trust funds that could be worth thousands of pounds, but £1 billion remains unclaimed. One parent's £10 monthly contributions over 18 years, combined with government payments and stock market growth, has resulted in a £10,000 windfall for their child.
Many 18-year-olds are unaware they have these accounts or don't know what to do with the money once they gain access. The funds can be transferred into adult ISAs, used for education costs, or invested for longer-term goals like house deposits.
If you're turning 18 or have children who are, check whether there's a child trust fund in their name. The money could provide a valuable head start on adult financial goals. Our ISA guide explains your options for managing this windfall tax-efficiently.
Today's news highlights how external pressures—from geopolitical conflicts to inflation—directly impact household finances. If you have student loans, review your repayment strategy given likely rate rises. For homeowners, green energy investments may offer protection against soaring bills, whilst young adults should check for unclaimed trust fund money.
Consider speaking to a qualified financial adviser about managing these challenges, particularly if you're weighing major decisions like home improvements or investment strategies. Use our service to find FCA-regulated advisers who can help you navigate these uncertain times.
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