Everything You Need To Know About The Cost Of Living Crisis & The Impact On Students
The cost of living crisis has got many students worried. Here’s what you need to know.
From rising costs to uncertainty, students are wondering how they’re going to pursue their studies and afford their education without amassing serious debt.
The cost of living has naturally prompted many worries, anxieties and other behaviours that have made students question whether they can even afford university at all.
So what do you need to know, and how will the cost of living and education impact you as a student? Let’s dive into the nitty gritty of what students are thinking, and doing, and how you can help yourself offset the rising costs.
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- What is the cost of living crisis?
- Why is it happening?
- How is the cost of living currently impacting students?
- We asked students how they feel
- What can you do as a student?
- What are universities doing?
What is the cost of living crisis?
Generally speaking, a cost of living crisis is when the cost of essentials such as gas, electricity and food rises faster than average incomes.
Currently, energy bills are soaring in the UK. We’re seeing price rises in almost all everyday essential items from fuel, to food, to broadband and most utility bills. On average incomes, people are struggling to afford essentials.
It’s natural to think of rising energy prices when the cost of living conversation comes up. However, the cost-of-living crisis in Britain is not just about energy. The rising price of food is also affecting shoppers, supermarkets and suppliers. As you can imagine, these costs are going to affect students greatly.
Why is it happening?
The pandemic led to global supply chains facing increased demand, shipping delays and factory lockdowns, which all culminated in an increase in the price of raw materials on the world stage.
The cost of Brexit has become apparent, too. Import and export promises made during Brexit haven’t been delivered, which means we’re not as productive, we cannot compete with other countries as effectively as before and we’re likely to be poorer whilst the country isn’t as open as it once was. A weakening pound hurts, too, as the cost of imported goods climbs.
The invasion of Ukraine
Rising energy bills have played a huge part in the cost of living crisis and are a source of pain for many. This is because Europe received much of its gas from Russia before the invasion of Ukraine. Since Russia has now limited Europe’s supply, this has increased demands and therefore costs.
In 2020/21, we had an unusually cold winter which led to increased demand on international wholesale markets, and thus, prices. When the cost of energy skyrocketed, many UK energy suppliers went bust which also affected the energy market and forced the costs involved with managing customers onto household bills.
The combination of all these factors has led to an increase in inflation and resulted in the situation we find ourselves living in today. We dive into this topic in much greater detail with our YouTube video:
How is the cost of living currently impacting students?
It’s got students worried
We surveyed 655 16-24-year-old college and university students in April 2022 and found that they feel both stressed (72%) and anxious (68%) about the current situation.
97% of UK students also said the cost of living crisis affected their mental well-being. In comparison, only 74% said they worried about their finances in January 2021. In fact, 54% of the students surveyed said they relied on receiving money from family or friends to meet their financial needs as a student, whilst in March 2021, only 43% said they relied on this.
There’s clearly a huge jump here. But what are students doing to get by?
Students are borrowing money elsewhere
But why is this? Research commissioned by Unite Students, and undertaken by Censuswide, surveying 1,000 undergraduates (first, second and third-year students) found that 32% of students feel uncomfortable asking a parent or guardian for money when in financial difficulty, and 29% actively hide debt from family and friends.
At Student Beans, we discovered over the past year that 42% of 16-to-24-year-olds have even used Buy Now, Pay Later services such as Klarna to help evenly spread the cost of big-budgeted items.
The new findings also suggest young Brits are twice as likely than their parents to seek financial guidance online before making big-ticket purchases, showing they are eager to learn how to make their money work smarter and not harder.
For neurodivergent folk, budgeting can be much harder, as proven by Monzo’s study that proved those with ADHD spend on average £1,600 more than neurotypicals, also known as the ‘ADHD tax’.
Now, the thought of borrowing money may frighten many. After all, you have to pay the money back at a later date. It makes many wonder why students should have to do this when the cost of learning is high enough as it is.
It’s leaving little left to live on
An NUS survey of 3,500 students found that 96% of students are cutting back on spending, with almost a third left with just £50 a month after paying rent and bills.
Now imagine the cost of learning materials, food, rent, utilities…this adds up.
Student living costs are showing an increase too, having risen by 61% in the last decade. 68% of students have also cited they can no longer afford course materials, which as you can imagine, will put many at a disadvantage in achieving their desired grades.
The survey has also uncovered that students really are reaching breaking point, with a saddening 92% of students saying the current crisis is affecting their mental health. Only 1 in 5 have sought government help, which begs the question of what can be done to help students.
We asked students how they feel
We hopped on Instagram stories to ask how you really feel about the cost of living crisis, here are some insightful comments based on a series of questions.
1. How worried are you about the cost of living crisis?
“Can’t afford anything at uni bc rent has been increased and maintenance loan doesn’t cover”.
“Sometimes it stops me in my day and scares me“.
“Anytime conversations about money come up, I dissociate so I don’t panic”.
“I’ve not been turning lights on in my flat until about 7/8pm because every penny counts right now”.
2. How is the cost of living crisis impacting you?
“Worried to the point where I’m exhausted working part-time and at uni but can’t quit my job”.
“I have to work on top of doing placement and uni. Not enough money. Have to use foodbank”.
3. What have you been doing to budget and get by the rising cost of living?
“I’ve been working extra to save as much as possible and been searching for scholarships”.
“Cooking in bulk, using hot water bottles instead of heating, turning all plugs off if not in use”.
4. Are you reconsidering your future? If so, how?
“Instead of doing the degree I’m passionate about, changing for a higher pay grade after uni”.
“I might have to drop out”.
5. What advice would you give to students to get through the cost of living crisis?
“Don’t become a student”.
“Get a job at uni, only way you’ll survive”.
“Just plan everything, look around, don’t be afraid to hunt for the best bargains. Do your research!”.
What can you do as a student?
So, we’ve evaluated that students are borrowing more money to offset costs and are considering deferring their studies to avoid the huge cost of learning and living.
Some defer uni entry, or turn to credit cards and buy now pay later schemes. Instead, we’ve come up with ways to offset the cost of living and build your skills too, as well as 100 ways to save money as a student.
From side hustle ideas for students to tips on making a £20 weekly food shop work, we’ve rounded up the best ones to get you earning and saving cash.
1. Sell clothes on Depop or Vinted
Got a bit of a collection going? Clearing out your old things can help you earn extra cash.
2. Tutor younger students
If you have specialist knowledge and the right A-Levels, you could offer to tutor GCSE and/or A-level subjects.
3. Sell your old textbooks
Textbooks are expensive, let’s be honest. Offer to sell them online to other students (you can even list them on Depop too!).
4. Freelance in an area you’re skilled in
You really don’t have to have years of experience. It just takes that one person to give you a shot and you’ll create a snowball effect and land even more work. Try sites like Fiverr, UpWork and PeoplePerHour to get you started.
We also have a ton of data on the side hustles that make the most money. Such as selling baked goods, influencer marketing, NFT animation, translation and much more.
5. Try pet sitting
Yes, you can really get paid to sit for people’s pets. If you’re a pet lover, this one is for you. And you get paid.
6. Shop from the cheapest online supermarket
Getting your food shop online is a great way to save money, especially if you live with multiple housemates. We wrote about the cheapest supermarkets with cheap delivery to get you started.
7. Buy own brand
Where possible, buy own-brand items. They really aren’t that different and may even taste better. They can shave off literally pounds on your receipt too.
8. Buy frozen food
The cost of living crunch has got many buying frozen food from places like Iceland to save cash.
If you want to save money on food then this is it. Frozen vegetables can sometimes be better not just for price, but nutrition too. This is because they’re often frozen at the source. Plus, it means you’re likely to reduce your food waste.
9. Get a supermarket loyalty card
Tesco and Sainsburys are great examples of supermarkets that offer loyalty cards. The more you spend in these stores, the more points you rack up to get vouchers and codes off your food shop.
What are universities doing?
The most important thing to remember is that there are things you can do to help with your finances during this difficult time. Now more than ever, make sure you’re getting the right amount for your student loan. Many universities offer financial help, advice and hardship funds, so get in touch with an advisor at your University to see how to apply for the fund if you are struggling.
Plus, at the time of writing, Vice-chancellors are calling upon the government to bring back the maintenance grant that helped thousands of students support their studies. It’s clear institutions are recognising this as a serious issue, and hope this comes to fruition so students can feel confident about getting through their university course.
Students are also able to access government funds for residents struggling with the cost of living crisis and if you’re unable to pay for food, there are food banks which can help. The overall government support for the cost of living fact sheet contains everything you need to find the right support and eligibility.
What are your thoughts on the cost of living crisis as a student? Sign up to The Economist for free on their website, and get a subscription with our Economist student discount to access unlimited, fact-checked and accurate news.
This is a sponsored post in partnership with The Economist.