Students have successfully completed their A-levels last week. Now they are preparing for next level of their higher education which is University. But before going to university some things need to be taken into consideration.
With the average student owing £44,000 at graduation, according to the Institute for Fiscal Studies, this is likely to be a challenging subject.
Tuition fees of up to £9,000 a term, plus accommodation costs of up to £4,500, make the next three years a study in how to run up debt, so it pays to start revising your financial plans today.
STUDENT BANK
Freshers are on course for plenty of fun, but first they need to take the practical step of setting up a student bank account. Hannah Maundrell, editor-in-chief at Money.co.uk, says your priority should be the largest possible initial interest-free overdraft, or one that rises each year.
HSBC and Halifax both offer overdrafts up to £3,000, but whichever bank you choose make sure you stick to your limit. Maundrell says: “If you exceed it your bank will instantly hit you with costly fees.”
Other offers worth having include Santander 123’s free 16-25 railcard, RBS and NatWest’s free four-year National Express coachcard, and Lloyds Bank’s.
Moneysavingexperts has an excellent tips on how to deal with student financing during the time of study. Also don't forget to check Save the student
SET A BUDGET
Jonathan Watts-Lay, director, WEALTH at work, says students need to learn key budgeting skills and should start by making a list of their monthly spending: “Divide these into utility bills, supermarket shopping, mobile contracts, insurance, subscriptions and other spending to highlight where savings could be made.”
INVEST IN THE FUTURE
If you still have a few years before your children or grandchildren go to university, start saving now to avoid big bills later.
Research from the Wesleyan suggests that parents will contribute up to two thirds of their children’s university costs, almost £30,000 in total.
Saving £95 a month from birth until graduation at 21 will cover this, assuming average investment growth of 5 per cent a year.
However, wait until they begin secondary school at 11 and that sum rises to £224 a month, or a hefty £472 a month from age 16.
Wesleyan’s chief customer and strategy officer Vicki Wentworth says: “The message is simple: the earlier you start saving, the more affordable university will be.”
STUDENT LETS
A growing number of parents now buy student properties in university cities to give their children a place to live and cash in on the student rental market.
Daniel Killick at estate agent Chestertons says student lets can be a great investment: “There will always be a reliable level of demand and universities can often be really helpful in pointing students your way.”
Edinburgh, Bristol and Brighton have been the most lucrative university cities, based on house prices, rents and local housing market growth, Chestertons says.
Investors in Reading, Oxford and York have also fared well, although Aberystwyth, Liverpool and Lancaster scored poorly.
CAN’T PAY, DON’T GO
For six out of 10, cost is the main thing stopping them from going to university or dropping out when they get there, according to new research from NotGoingToUni.co.uk.
Sharon Walpole, chief executive at the site, said that university is not for everyone: “There are so many different routes you can take, including getting an apprenticeship or undertaking vocational training.”
This way you will not be left paying off student loans for decades, can earn money whilst being trained and learn from hands-on experience in the real world.
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