Student living costs have been soaring ahead of the Retail Price Index (RPI) inflation level, a new study has revealed, something that could increase …
Student living costs have been soaring ahead of the Retail Price Index (RPI) inflation level, a new study has revealed, something that could increase debt levels for students and families trying to support them.
The last year has seen these costs jump by £42.56 a month or £510 a year, making the typical scholar's annual expenses add up to £9,541, a survey by Family Investments has found.
Stuudents spend the most money on rents – which have risen from £156 a month to £163 in the past year, followed by food – up 38 per cent from £44 to £65 – and recreation and clothing – both of which have seen inflation of over ten per cent.
Head of savings and investments at Family Investments Kate Moore said: "Over the last six years, student living costs have risen by more than five per cent each year, significantly ahead of RPI in the same period."
In 2004, when the survey started, the average annual cost of living for a student was £561.
Another reason for concern may be the higher tuition fees coming into effect next year, which the Family Investments survey has not taken into account.
However, according to head of consumer finance at lovemoney.com Ed Bowsher, the new student loans system is not as bad as some think.
He noted only those who become high earners are likely to pay off all of the money they have borrowed before anything remaining is automatically written off 30 years after graduation.
Despite this, he said, students should be aware that the interest they will pay is going to be set at a rate that is "higher than inflation," meaning it should not be regarded as cheap borrowing.
Posted by Paul Thacker