Student Update – Forbes Advisor UK

September 1: Average student spends 19% more on back-to-school preparation than last year

The average student expects to spend £1,027 preparing for the start of the new school year. His Back to Campus report for UNiDAYS, a student affinity platform, shows a 19% increase from last year due to rising costs of living.

For first-year ‘freshmen’, planned spending is even higher, averaging £1,215.

Groceries and household items are the most popular spending categories, with 65% of returning students and 75% of first-year students expecting to make these purchases.

The majority plan to shop at big box stores such as Tesco and ASDA before the start of the school year, with a total spending of £281m.

But according to the report, this is dwarfed by the staggering £948m spent on electronics. In total, 38% of his UK students said they would buy a new laptop or other hardware before the semester starts.

Of those surveyed by UNiDAYS, 64% said they were planning to buy clothes, spending an estimated £252m at popular retailers such as ASOS, Primark, Zara, Nike and New Look .

The report also found that 64% of students plan to buy cosmetics before the start of a new term, spending a total of £136m.

Despite the cost of living crisis, most students factor entertainment into their budgets, with 53% planning to purchase a home entertainment subscription and 62% planning to sign up for music streaming services.

Alex Gallagher, chief strategy officer at UNiDAYS, said amid the cost-of-living crisis, Gen Z students face a “significant increase in costs” to prepare for the next year of study. Warned that retailers must adapt.

he said: “It’s important for brands to align their products, adopting strong pricing strategies that help brands resonate with the priorities and values ​​of Gen Z audiences in the current economic climate. “

UNiDAYS also found that a third of students plan to stay at home while studying, cutting back on spending on food and other essentials.

18 Aug: Money Tips for Students as Higher Education Acceptance Rates Soar on A Level Results Day

Over 425,000 students entered college or university on the day of this A Level result. This is the second highest number on record.

Grades are on average lower than teacher-assessed 2020 and 2021 results, but higher than 2019, when students last took their face-to-face exams.

  • 36.4% of all grades were A* or A
  • 62.2% of grades were B’s
  • Pass rate for the new T-level qualification was 92%
  • Overall AS results were higher than in 2019, with 25.2% of grades being A’s
  • 19% more students were accepted into their 1st or 2nd choice courses than in 2019.

“Today’s results are a testament to the hard work and resilience of our students,” said Dr. Jo Saxton, lead regulator of exam regulator Ofqual.

Savings Tips for Freshmen

With inflation soaring to 10.1%, students entering college this September face a record cost of living.

While these rising costs pose challenges, there are steps new students can take to save money and make the most of their budgets.

  • Be careful with credit cards: It’s handy to have a credit card in your wallet for emergencies, but aim to clear your balance every month to avoid high interest.
  • Avoid borrowing as much as possible. While it may be tempting to use a “pay later” service such as Klarna, this is best avoided. Missing or late payments can have a negative impact on your credit score, making it more difficult to obtain credit in the future, such as a mortgage.
  • Use overdrafts with caution. An interest-free overdraft is a convenient lifeline for many students, but be careful to stay within limits.
  • Get into the habit of budgeting: Set a manageable budget over time. Calculate your income by factoring in student loans, part-time work, savings, and family support and divide it by the number of weeks allotted. Knowing your weekly budget makes shopping, grocery shopping, and social event planning much easier. Student loans are often paid off in one lump sum, so be careful not to take on a lot of debt at the beginning of the semester and end up in trouble later. If there are semester start costs such as textbooks, please divide them after deducting the expenses from the total income.
  • Try bulk buying: Buying food and drinks in bulk often saves you money. Try working with your flatmate to buy non-perishable essentials like dry and canned goods, toiletries, cleaning supplies, and split the cost.
  • It is worth taking out content insurance. Before you go to college, check to see if your family’s home insurance covers valuables like laptops, cameras, phones, and bikes. If not, having your own content insurance can save you money in the long run by allowing you to replace your valuables in the event of loss or theft.
  • Find student discounts: From Spotify to New Look, many companies offer student discounts, so it’s always worth checking. The Student Union will also provide information on discounts offered by local businesses.

August 16: Students struggle with rent amid cost of living pressure

According to Nationwide, 66% of college students are having trouble paying their rent or are behind on their rent. This highlights the growing cost of living crisis in the UK.

A survey of 1,000 students across the UK by the Architectural Institute found that 73% of them borrowed money from their families to help cope with rising rent, food and energy prices.

About half (47%) say they feel ashamed to ask for a loan, and 36% feel completely incapable of asking family members for money. An additional 42% of students rely on overdrafts to meet their living expenses.

Another study by HSBC revealed similar findings. A bank poll of 2,002 current and prospective students found that 57% depended on borrowing to cover necessary expenses. and 37% have an overdraft or bank loan.

In the face of record rent prices, 24% of students told Nationwide that housing costs are an important factor in deciding which college to attend.

Quite a few students say they’re teetering toward homelessness. A Nationwide survey found that 14% of respondents fear they will be homeless within the next six months.

22% of students who do not consider themselves homeless know someone who has become homeless in the last 12 months.

Students face financial pressures across the UK, but the proportions concerned about homelessness vary by region.

In the West Midlands, 21% of students fear being homeless in the next six months, compared with 20% in London and 17% in Yorkshire and Humber.

Polly Neat, CEO of the housing charity Shelter, said:

“But record highs and skyrocketing food and fuel costs are pushing an alarming number of college students to the brink of homelessness.”

Students turn to “side jobs” to achieve their goals

Upon arrival at university, a significant number of students start part-time jobs to cover their living expenses.

An HSBC survey found that 61% of students have a ‘side job’ such as an online business to supplement their income, and 51% have a part-time job.

Beyond earning and borrowing, more than half of students (55%) cut spending in the face of rising costs of living.

Tom Wolfenden, Head of Retail Banking at HSBC, said: Many people are making final decisions about college choices and planning to move out of home for the first time.

“But we also know that students are facing greater financial pressures than usual in the current situation.”

August 10: Student loan interest rate cut to 6.3% to prevent skyrocketing inflation

The government has announced that student loan interest rates in England and Wales will be pegged at 6.3% from September. That’s lower than his 7.3% cap first proposed in June.

Student loan interest rates are reviewed each August and are based on the current Retail Price Index (RPI) plus 3%. Rampant inflation has pushed RPI graduates so high they would face an interest rate of 12% without intervention.

The new lower interest rates mean that a graduate with a typical student loan balance of £45,000 will accrue £210 less interest each month compared to if the rate jumped to 12%.

Angela Jenkins Skills and Higher Education Minister said:

“For students starting tertiary education in September 2023 and those currently considering their next steps, we have lowered future interest rates so that new graduates can effectively repay more than they borrow. no longer need to.”

A spokeswoman for the Student Loan Company (SLC) said borrowers don’t need to take any action to benefit from the lower interest rates and the changes will be applied automatically to their accounts.

However, while the interest rate change will reduce the amount of interest that graduates accrue on their student loans and therefore reduce their total debt, it will not reduce their monthly payments.

Student loan repayments are income-dependent, with borrowers paying 9% of income above £27,295 annually. But according to the government’s own figures, an estimated 80% of college degree students in 2021 or 2022 will never pay off their loans in full. This means that you will not see any benefit from lower rates.

This change will not affect graduates who started their studies before 2012, Scottish graduates, or graduates with a postgraduate loan. This is because these charges are calculated differently.

Student loan rates will be reviewed again in December.

4 August 2022: Student renters at risk of missing out on government £400 energy discount

College students who live in private rental housing risk not taking advantage of government energy discounts.

Renters whose utility bills are included in their rent may not benefit from the discount, warns consumer charity Citizens Advice.

With average energy bills reaching record highs of over £300 a month, the government has pledged a £400 discount to all household bills this fall.

The discount will be automatically applied to your electricity bill in 6 installments from October 2022 to March 2023.

If the landlord pays the utility bills, the discount applies to the landlord, not the tenant. There are also concerns that renters whose utility bills are included in their monthly rent payments may not carry over their rebates.

According to data from the Office of National Statistics (ONS), 13% of renters, representing 585,000 households, include utilities in their rent payments.

This kind of rental arrangement is especially common among students. His 2018 survey by utility company Glide found that 63% of students had utilities included in their rent.

Polly Neate, CEO of housing charity Shelter, said: Instead, they will be at the mercy of their landlords taking over this much-needed support. “

Landlords are not legally obliged to pass on the £400 energy discount, but they are not permitted to overcharge tenants for energy.

To make sure you only pay what you owe, Shelter recommends checking your electricity and gas meters regularly to track how much energy you’re using.

Polly Neat adds: The government is investigating this as it admits this is not correct. “

Organizations, including Renters Lights London, are urging tenants to contact their landlords in writing if they do not pass on government energy rebates.

It is within the customer’s right to have it delivered by bank transfer or deducted from future rental charges. If the landlord does not receive the discount, please contact Citizens Advice or Shelter for instructions.

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