Fresher students are feeling the financial pinch as research from Nationwide FlexStudent shows how Covid-19 is hitting their pockets. A lack of part-time work, mounting university debt and even the threat of Covid-related fines are weighing on the minds of the current crop of undergraduates.
Nationwide commissioned a poll of 1,000 first-year university students to better understand the pressure they face in 2020. It found that while many students feel up against it this year in particular, they value the benefits a student current account can bring, such as an overdraft.
Nationwide’s fee-free student account, FlexStudent, is rated as one of the best student current accounts in the UK1 for 2020 and offers students an interest-free overdraft facility. It grows from £1,000 in the first year of university to £2,000 in year two and £3,000 by the third year, with students getting the full amount each year should they be accepted. Once a student’s course finishes, the FlexStudent account moves to the Society’s FlexGraduate account, which keeps the overdraft interest-free while the amount is gradually paid back.
Part-time work fears:
Getting a part-time job can be a good way of getting extra money while at university. However, more than seven in ten (71%) think they’ll struggle to find employment in the current climate. This view is particularly prevalent among women (74% vs 66% for men). Without employment at university, more than half (53%) of first-year students believe they will end up in more debt once they finish their first year and, ultimately, once they finish their degree.
Financial concerns lead to less spending:
The financial concerns and restrictions experienced by first-year students in 2020 is leading to a cutback in spending. According to the poll, more than a third (38%) plan to spend less this academic year as a result of Covid-19, with women planning to spend less (41%) than men (35%). The top three areas where first-year students plan to spend less are socialising, travel and hobbies. However, more than a quarter (27%) plan to spend more on other items, including food and drink at home, online learning materials and new or better gadgets such as laptops and tablets.
Covid-19 financial concerns:
The onset of the pandemic has thrown students a financial curveball, none more so than the risk of receiving a Covid-related fine. This is currently a very important consideration whilst at university, according to the poll, as two in five (40%) have no idea how they would pay any fine, while more than a quarter (26%) would turn to their parents for the money. A quarter (25%) say they would take out another loan, while 19 per cent would use money from their existing student loan to cover the cost.
James Broome, Nationwide’s Head of Current Accounts, said: “Starting out at university in 2020 will undoubtedly have been an unusual experience, with the ability to socialise being significantly restricted due to Covid-19. While this means that less is being spent, less is also being earned due to many part-time university jobs having dried up. The ability to manage money has, therefore, become even more important for students on a tight budget. Financial wellbeing is our top priority, as is delivering convenient and easy to use products to help put members in control of their money at every step. Our FlexStudent account offers first-year students access to an interest-free £1,000 overdraft with that rising to £3,000 in the third year, which could really support students as they navigate these uncertain times.”