Greater London, UK (PRWEB UK) 2 October 2012
With new university tuition fees coming into effect across England and Wales this month, new researchi from Lloyds TSB highlights the growing financial challenge facing new students as they embark on their first year of study. And with the prospect of higher debt upon graduation, money management is set to become even more testing for students starting university this year. Therefore, Lloyds TSB offers its top tips for how they can make their money go further during term time
The new research reveals that many existing students would need to make changes to their finances if they were required to pay the higher fees facing new entrants. The survey, which asked students at university in the last academic year (and who were about to return this year) what affect an increase in tuition fees would have on their own financial situation, found:
- Nearly a third (32%) of those surveyed stated they would need to take out a new loan or increase their existing loan to help manage their money
- Around one in five (21%) would need to seek employment
- One in ten (10%) would need to work longer hours in their existing job
- 22% admitted they would look to borrow money from family or friends
- 17% would have to increase their overdraft
While existing students will be unaffected by the increase in tuition fees, the research highlights the added pressures facing new starters to manage their money carefully while at university to avoid spiralling debt. As revealed in this summer’s Lloyds TSB Student Finance Report, 47% of existing students are already concerned about the level of debt they are taking on as a result of their degree, with 60% expecting to finish university with debts in excess of £10,000. With an average annual income of just £7,054ii, new students can expect any money to disappear quickly when faced with outgoings such as bills, the price of purchasing course books and the cost of taking part in social activities.
Students who stay on top of their finances and adopt good money habits from an early stage can, however, help to keep debt to a minimum. Therefore, Lloyds TSB suggests students follow a few top tips to make their money go further during term time.
Top tips for students:
- Open a student account – these are specifically designed for students, so often include
an interest-free overdraft. They also commonly include benefits or discounts for things
that students use a lot or like, but it’s important to also look beyond the freebies.
- Set a budget – keep track of current weekly or monthly spending and even try getting all
money for the week out in cash. That way, students can see exactly where they are overspending.
- Check balances regularly – banks offer a wide variety of ways to check account balances, which can really help students stay on top of their finances. Students should check if their bank offers ways to manage their money such as online, by phone or even via a mobile phone.
- Use willpower – cutting back on spending does not need to be at the expense of a social
life, it just means being clever with your money. For example, students should look to cook from scratch at home, invest in a few essentials that will help cut costs and set themselves a budget limit on a night out.
For many students, taking on paid work can be an effective way of supplementing any income and in the last academic year 49% of students surveyed chose to find employment. Of those who did work, nearly a quarter (22%) found a job within the retail sector, while a fifth (20%) chose bar or restaurant work, 16% found office work and 12% chose teaching.
Jatin Patel, director of current accounts at Lloyds TSB, says:
“The rise in tuition fees will be a concern for a lot of students starting university this year and many will already be thinking about how they might fund their time studying. With low average earnings, increased tuition fees may mean new students in particular face greater challenges in meeting monthly outgoings and this could affect their level of debt upon graduation.
“Our research shows that a considerable number of existing students would struggle with an increase in fees, and would need to seek some form of financial help. However, these days, there is a lot of financial support on offer for students, and the good practices they adopt now will stand them in good stead for the future.
“There are now more ways than ever for students to take control of their finances and
opening a student account should be high on their list of priorities. These can offer an interest-free overdraft and money management tools to help stay on top of spending habits and remain in control of any university debt.”
The Lloyds TSB Student Account offers students a number of tools to help them manage their finances including Mobile Banking, Text Message Services, Internet Banking and Money Manager, which is an online service that provides students with the ability to view spending patterns and track financial activity.