It's kind of a weird situation - mine is similar in that I have a good student Cello that will start to be pushed in the upper grades, but could probably manage it.
I've tried to disconnect my new instrument purchase from the grade/exam system, and am thinking more about how much I'll need to spend to upgrade, and whether that would be a final upgrade, or a similar step towards my final instrument.
I'm tending towards the former - I don't want to spend a lot of money that only gives me a small increase in quality/sound. Personally, I feel that my current instrument will take me to grade 7 and 8 quite comfortably, but I am starting to save up, with the expectation that I will change in around two to three years time; and that change will be to an instrument/bow combination that would see me not having to change again.
My Cellos weakness is in the region beyond 7th position, particularly when using thumb position - the current grade 8 syllabus doesn't really stretch those areas too hard - but again, it would depend on what else I was doing, performance wise - I'd like to do quartet, Trio and Solo repertoire, as well as orchestral, so having a higher quality instrument to accomplish that might change when I buy.
I'd rather not spend thousands of pounds if all I'm doing is playing to myself! I ask myself, if I had the money now, could I justify an upgrade? The answer is no, and when it's yes, I'll do it. That's a bit vague I know, but I think it's only you and your tutor that can know when you should change.
On the other hand, I do think that there's a psychological aspect to this - If you sound better, you play better. It's kind of the 'Look good, feel great' syndrome kicking in