Ruby (right) and Hazel (left).

As a new year of undergraduates start their adventure at university, we have some financial thoughts that might just change your perspective.

Thirteen years older than her sister, Ruby, has watched all of Hazel’s milestones, from her wobbly first step to becoming a teenager. Both are Holden & Partners clients, and now Hazel is about to take the exciting leap into university life. Ruby has lots of advice on what to take (fancy dress costumes are essential) but as a canny investor, what Ruby really wants to pass on to Hazel are some sound financial words of wisdom.

After all, a recent survey by Save the Student revealed that over 70% of students wish they had received a better financial education 1. Not everyone has a wise big sister to share advice, so we’ve collated Ruby’s thoughts and added some of our own. We hope this will help people making the life-changing transition into higher education. Of course, it is important to mention that everyone’s circumstances are very individual, and it is worth researching and seeking advice to find the best outcome for you.

Consider taking out a student loan whether you need to or not

Ruby is keen to bust lots of myths surrounding the Student Loan. It’s easy to look on debt as bad, and something to be avoided at all costs. However, the Student Loan is not like other debt – because it won’t affect your credit score. 2 Nevertheless, it is still worth noting that some financial providers may specifically ask if you have a student loan, so they can include it in an affordability check.

Ruby’s job involves encouraging people from disadvantaged postcodes to enter higher education and accessing a Student Loan is a key part of this, alongside grants and bursaries, but the advice equally applies to those who could afford to go to university without taking a loan. The decision whether to take a loan or not must be taken very carefully. One option Ruby considers, is to take the loan even if you don’t require it financially; “It seems counterintuitive, but actually, in some cases, you could pay less that way overall.”

This is because for some graduates, the loan is written off before it is paid off in full. For current uptake of the Plan 2 loans, you don’t start paying anything until you are earning £27,295 a year (before tax and other deductions) and it is written off (no matter how much has been paid) after 30 years.3 It’s worth knowing that the average starting salary for graduates in the UK is £24,000,4 and the average UK income in 2020 was £25,780, but this varies depending on many factors, such as your location, industry, full or part-time working.5 Of course, no one can see into the future, and it is hard to predict future earnings, but there are some online calculators that can help you make the decision, like this one.

However, Stefani Williams, from Holden & Partners, raises an interesting psychological angle to consider; “Some people do not like the feeling of being ‘in debt’ and would be worried by starting their working life with the prospect of repayments hanging over them. Having financial help from parents or grandparents to see you through your uni days can be beneficial. It really goes to show that so many financial decisions come down to personal preference.”

On a par with peers

There are wider factors to consider too. Stefani explains that it can help with feeling integrated to take the loan rather than rely on parents, “You’ll then be on the same budget as new friends. It means you all celebrate the loan arriving in your account together, and you all feel the pinch as the term progresses. For some, this is the first step into an adult world of making decisions and being responsible for finances, away from the bank of mum and dad.” Ruby adds, “It is really beneficial to feel like you are living within your means. It’s a very different mindset.”

Consider not paying it off early

Whilst it’s a very personal decision whether you are comfortable to keep debt even if you could pay it off, it is worth considering the financial implications. Repaying a Student Loan early would reduce the amount of interest paid overall, but in some cases, it’s unlikely you’d get to the point of paying off your accumulated interest at all before the 30 years are up and it gets wiped. 6

Budgeting tips

Ruby suggests dividing up your budget into weekly chunks. “It can really help to have separate accounts to help you with this – your main account could pay weekly amounts into another account. I swear by Monzo as you can split the funds into different pots which really helps you plan. You definitely need a guilt-free fun pot, that doesn’t have to suffer when your rent is due.” There are lots of similar online banking apps that can help you budget and analyse expenditure.

Limiting your costs

Avoiding take-aways and eating out by cooking at home will avoid unnecessary expenditure, as will borrowing books from the library rather than owning them. Ruby’s sister, Hazel, is great at buying clothes from charity shops or sites such as Depop 7, saving masses without compromising on new outfits. It’s also a sound environmental and ethical choice.

Never too early

A gap year can be a good opportunity to enter the world of work and get saving before university. It has the double impact of teaching the value of money by finding out the effort involved in earning it, as well as contributing to the university budget.

And for those of you with younger children, Ruby says, “You can’t start too early with financial education. I had an allowance from age eleven and wrote down everything I spent. It really helped me work out how to budget, and means I get that thrill from saving that some people get from spending.”

Avoid the stress

University should be a place of opportunity and discovery. It’s important not to miss out on the fun and excitement because you are worried about money or confused about your student loan. It’s also the perfect time to learn about managing your own personal finances, setting patterns that may last a lifetime. Are you a splurge it all at the beginning of term person, or do you want to spend more carefully?

With some thought and planning, university can be a brilliant springboard into a healthy financial future.

Many thanks to Ruby for sharing the suggestions and advice that she has discussed with her Holden & Partners adviser. And good luck Hazel for this next stage in your life!

We have received lots of positive feedback about our updates. If you’ve found them useful and informative, we would be delighted for you to share them with friends, family and work colleagues. We are always keen to spread the word about our unique approach to financial planning and investing.

Please note that any thresholds, allowances, percentage rates and tax legislation stated may change in the future. The content of this communication is for your general information and use only; it is not intended to address your particular requirements. This communication should not be deemed to be, or constitute, advice. You should not take any action without having spoken with your usual adviser.



3. Repaying your student loan: When you start repaying – GOV.UK (

4. Average graduate salaries in the UK 2021 – Save the Student

5. What is the Average UK Salary? Updated July 2021 (



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