Millions of students are facing a rise in the cost of living that far exceeds the slight rise in support from maintenance loans as the new academic year begins.
The rising costs of rent, food, energy and train fares, as well as books and other basic necessities for students, mean that many will come under pressure, with those in private rental housing being hit especially hard, according to new research.
‘Student inflation’ for those living in flats already reached 9 percent in the year to June, according to research by Interactive Investor, but for those renting from a private landlord, prices shot up an even bigger 12 percent.
Students from England who do not live at home outside London will receive a maximum maintenance loan of £9,706 per annum, or approximately £810 per month from September
By comparison, maintenance loans for English students have risen by just 2.3 percent or £218 in the past academic year.
Students from England who do not live at home outside London will receive a maximum maintenance loan of £9,706 per year, or approximately £810 per month, from September.
Those in London receive up to £12,667 or £1,055 per month.
Maintenance loans are calculated based on household income, where a student will live while studying and where they normally live in the UK.
But with private rents and student housing prices skyrocketing, the loan barely covers those costs or, in some cases, falls short.
The average annual cost of student housing in the UK was £7,374 in December, up 4.4 percent, while it was higher in London at £10,857, according to data from the National Union of Students.
The reality is that a large number will have to work part-time to support themselves
Private rents have risen much faster, meaning more financial pain for those looking for a room to rent in house stock.
Including London, private rents reached almost £1,000 a month in May, up 11 percent.
Excluding London, they rose 9.1 percent to an average of £830, according to May figures from Zoopla.
Interactive investor data is based on Zoopla stats, rather than total student rental numbers published by the NUS, as they are more reflective of the higher costs students will weigh in the coming months.
|Student-based inflation||Annual CPI inflation in % to June 2022|
|Clothing and footwear||6.1|
|Total student rent (student housing)||4.4|
|Private rental costs||11|
|Driving a car||21.2|
|Cinema, theater, concerts||16.7|
|Restaurants and cafes||7.4|
|Average for most students||8.90%|
|Average for private tenants||12.30%|
|Source: Interactive investor analysis of figures from the Office of National Statistics (except for rent), National Union of Students and Zoopla|
In addition to rent costs, students face rising costs for most other basic amenities.
Like everyone else, rising utility bills were the biggest inflation factor for college students, up 70 percent in the year to June, above the cost of running a car, which rose 21 percent.
Going out has become more expensive, with the cost of cinema, performance and theater rising 17 percent, while sports tickets have risen 10 percent.
Eating out has become 7 percent more expensive and even takeaways have become 10 percent more expensive than a year ago, according to the survey.
The cost of food was up 8 percent and train prices are up 5 percent, while books saw a more modest 3 percent increase. Only laptops fell in price, by 4 percent.
More dinners at home: Eating out has increased in price by 7% and takeaways have become 10% more expensive than a year ago, while the cost of food has increased by 8%
Myron Jobson, senior personal finance analyst at interactive investor, noted that students will be less likely to rely on financial aid from their parents, who will also face increased costs this winter.
“The reality is that a large number will have to work part-time to support themselves,” he added.
In any case, those who managed to get their hands on student housing will be spared a huge increase in energy bills.
“It’s unlikely they’ll raise rents in the middle of the semester to cope with the higher costs,” Jobson said.
However, students who live in a shared home are more likely to suffer.
“Student households will probably have a harder time than most because they have limited disposable income and spend a large portion of their budget on essentials with little wiggle room,” said Alice Guy, personal finance expert at interactive investor.
Rising costs are also a concern for those about to graduate, who may be forced to move back in with their parents.
“Graduates who follow the familiar pattern of moving out of student housing into some form of private residence will have to cover a myriad of costs, including rent, rising food and energy bills,” Jobson said.
‘For example, going back to the parental home is increasingly becoming a valid option for many graduates.’
Five money-saving tips for students
Myron Jobson, senior personal finance analyst at interactive investor, has some advice for students.
Budgeting is an integral part when it comes to keeping your financial home in order. It allows you to plan how much you spend or save each month and keep track of your spending habits.
It’s worth keeping a spreadsheet of your own spending habits. There is a plethora of budgeting templates available online for free, as well as apps to get you started.
The rising cost of living means we are saving less to maintain current spending levels, so be prepared to make adjustments to your budget if inflation continues to rise.
Once you have a better idea of how you spend your money, you can explore ways to help you live within your means.
Watch out for exclusive student deals
There are plenty of deals available exclusively for students, to make their money go further. Such deals are usually a percentage of the total price, but may also include offers such as free trials or buy-one-get-one-free.
Available student discounts are not always made clear by companies, so students often have to ask the question.
Save on food bills
Shop around for the best deals — especially on high-ticket items. Even simple things, like buying a store brand that is equivalent to traditional pantry products, can help lower the cost of grocery shopping.
Consider buying items in bulk so that you don’t spend money constantly as prices continue to rise. It’s also worth taking advantage of grocery store loyalty programs – such as Tesco Clubcard and Nectar Card – that allow you to unlock big discounts and other exclusive rewards.
Shop around for the best deals
You don’t know if you’re paying too much for things unless you look for the best deals. For example, if you’ve been working with a broadband provider for a while, it’s likely that all introductory offers have expired and you may be paying more than you need to. The same applies to mobile subscriptions. Shop around to see if you can get a better deal.
Remember – financial support is available
Students who are struggling financially don’t have to suffer in silence. Don’t be afraid to ask for support. There are counseling and hardship funds available at various universities. Additional funds are available for those who need additional financial assistance, as well as for students with children or dependent adults and students with disabilities. Students can also access living expenses support funds distributed by local councils to support residents who are struggling financially.
Some links in this article may be affiliate links. If you click on it, we can earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.