Financial planning and pension information Hub

Guidance for potential University students

You’ve made up your mind and decided that you will be attending University in order to pursue your dream career. This is a very exciting time, however for most undergraduate students, it will be the first time that you will have to control your own finances to such an extent. Particularly, if you are moving out of your family home. Preparing yourself before you leave for University is therefore imperative and budgeting correctly will help to avoid stress and ensure that you can fully enjoy the experience.

This document intends to provide you with key information that you should know before starting University as well as tips to help you to budget whilst you are studying.

University Costs

Tuition fees

Tuition fees will cover the cost of your course and will be paid directly to your University. Tuition fee amounts will vary depending on what and where you are studying. The maximum tuition fees that Universities can charge are shown on the below table:

Source: https://www.ucas.com/finance/undergraduate-tuition-fees-and-student-loans

Cost of Living

There are many other living costs which will need to be considered, these will vary depending on where you plan to study. The below table shows the average student cost of living (research done by Which? In 2019)

Source: https://www.which.co.uk/money/university-and-student-finance/student-money-and-budgeting/how-much-it-costs-to-live-at-university- aw9gp0v2sq7r

The cost of accommodation has not been included in the above table as this will vary significantly depending on where you intend to study.

Use the below link to see the average living costs (including accommodation) for your University: https://www.which.co.uk/money/university-and-student-finance/student-budget-calculator

Student Bank Accounts

You may wish to open a student bank account. A lot of students will require an overdraft at some point during University – a student bank account will normally provide you with an interest-free overdraft for a set period of time. Try to limit the use of overdrafts as much as possible.

Certain student bank accounts will also offer you additional benefits such as free railcards so do shop around.

Budgeting

A good starting point, before you begin University, is to work out approximately what your income and outgoings are going to be.

Once in University, look over your bank statement at the end of each month, to see what you have spent your money on and where you could potentially make savings going forward.

Creating a spreadsheet to track your spending may help you to budget. Student budgeting apps are also available.

Tips to help save money:

  • Try not make large purchases when you receive your student loan at the start of the term (or month in Scotland). This could leave you short at the end of the
  • Learn to cook – cooking from scratch will reduce the money that you spend on takeaways and eating out and is also healthier!
  • Where possible, try to limit travel costs. If you can walk or cycle into University then this will save If you are required to use public transport each day, a monthly bus/train pass will usually work out cheaper than paying for each journey individually.
  • Make use of student discounts – certain shops, gyms etc will offer discounts for
  • Try to avoid expensive habits such as
  • Part time work is an obvious source of income – this is a balancing act however, as working too many hours will mean you have less time to concentrate on your studies. Everyone is different and you will need to find the level of work that you are comfortable with, whilst continuing to study. Try to find an employer who allows you to be flexible with the hours that you

Details of the financial support available in each of the countries within the UK are covered in the following appendices:

  • Appendix A – England
  • Appendix B – Scotland
  • Appendix C – Wales
  • Appendix D – Northern Ireland

Appendix A

Financial Support – England

The majority of students will require help to cover their tuition fees and costs of living. The financial support available in England is as follows:

Tuition fee loan

This loan is paid directly to your University to cover the full cost of your course.

Maintenance loan

This loan is paid to your bank account at the start of each term. The loan is means tested, meaning that the amount you will get is dependent on your household income – for most undergraduate students, this will be your parents income. The amount you receive will also depend on where you study and whether you live at home or have moved out.

The following table shows the maximum maintenance loan available:

Further support is available for certain individuals. For more information and to apply for student finance, please follow the link: https://www.gov.uk/student-finance

Repaying your loan

Once you have completed your studies and are earning above a certain limit, you will begin to repay your loan (total of both tuition fee & maintenance loans). The amount that you repay is based on how much you are earning and not how much you owe. The earliest that you will start repaying is the April after you have finished your course.

The current UK threshold is £26,575 a year so, until your annual earnings are above this you will not begin to start repaying the loan. Once you are earning over £26,575, you will repay 9% of your income above the threshold. This threshold is likely to change each year.

The interest that you will pay on your student loan whilst you are studying is the Retail Price Index (RPI) plus 3%. RPI is currently 2.4%. This will apply until the April after you have completed your course. The interest rate will then be dependent on your income:

 

Source: https://www.gov.uk/repaying-your-student-loan/what-you-pay

If you have not repaid your loan after 30 years from when you are due to start repaying, any outstanding balance will be cancelled.

Apendix B

Financial Support – Scotland

The majority of students will require help to cover their tuition fees and costs of living. The financial support available in Scotland is as follows:

Tuition fee loan

If you live in Scotland and have chosen to study in Scotland you will not have to pay tuition fees. However, your fees are not automatically paid for you and you will have to apply to the SAAS each year.

If you choose to study outside of Scotland, you can apply for a loan to cover your tuition fees (maximum £9,250). This loan is paid directly to your University to cover the full cost of your course.

Student loan

This loan is paid monthly to your bank account. The loan is means tested, meaning that the amount you will get is dependent on your own income and the income of your parents or spouse/civil partner – for most undergraduate students, this will be your parents income.

The following table shows the loan amount available for financially dependent students (2020/21):

 

The following table shows the loan amount available for students who are NOT financially dependent on others (2020/21):

 

Bursaries

In addition to the loan, you may be eligible for a bursary. The most common bursary for undergraduate students is the Young Students’ Bursary.

The following table shows the amount of Young Student’s Bursary available (2020/21):

If the total of your household’s income is above £34,000, you will not qualify for the Young Student’s Bursary, therefore the only support you will receive will be the student loan.

Other bursaries available are:

  • Independent Student’s Bursary
  • Care Experienced Student’s Bursary

Further support is also available for certain individuals. For more information and to apply for student finance, please follow the below link:

https://www.saas.gov.uk/guides/guide-to-undergraduate-funding

Repaying your loan

Once you have completed your studies and are earning above a certain limit, you will begin to repay your loan. Bursaries do not need to be repaid.

The amount that you repay is based on how much you are earning and not how much you owe. The earliest that you will start repaying is the April after you have finished your course.

The current threshold is £19,390 a year so until your annual earnings are above this, you will not begin to start repaying the loan. Once you are earning over £19,390, you will repay 9% of your income above the threshold. The Scottish Government have commited to raising the threshold to £25,000 from April 2021.

The interest that you will pay on your student loan is currently 1.1% (2020/21).

If you have not repaid your loan after 30 years from when you are due to start repaying, any outstanding balance will be cancelled.

Appendix C

Financial Support – Wales

The majority of students will require help to cover their tuition fees and costs of living. The financial support available in Wales is as follows:

Tuition fee loan

This loan is paid directly to your University to cover the full cost of your course.

Welsh Government Learning Grant & Maintenance Loan

The support given in Wales is a combination of grants and loans which, for most people, will be the equivalent of the National Living Wage. Both are paid to your bank account at the start of each term. They are means tested, meaning that the amount you will get is dependent on your household income – for most undergraduate students, this will be your parents income. The amount you receive will also depend on where you study and whether you live at home or have moved out. Every eligible student will receive a grant of at least £1,000 regardless of household income.

Source: https://www.studentfinancewales.co.uk/undergraduate-students/new-students/what-financial-support-is-available/help- with-living-costs.aspx

Special Support Grant

Depending on your circumstances, you may be eligible for a Special Support Grant (SSG) which will replace some or all of the Welsh Government Learning Grant (WGLG). The maximum amount available is £5,161 per year (2020/21), anything over this will be a WGLG.

Unlike the WGLG, the SSG will not affect the amount of Maintenance Loan that you may be entitled to. The SSG will not count as income when working out other income-related benefits or tax credits. There are a number of reasons why you may be eligible for the SSG, which can be found on https://www.studentfinancewales.co.uk/practitioners/undergraduate-students/full- time/help-with-living-costs.aspx

Further support is available for certain individuals. For more information and to apply for your student finance, please follow the link: https://www.studentfinancewales.co.uk/practitioners/undergraduate-students/full-time/how-to- apply-and-changes-to-applications.aspx

Repaying your loan

Once you have completed your studies and are earning above a certain limit, you will begin to repay your loan (total of both tuition fee & maintenance loans). Grants do not need to be repaid.

The amount that you repay is based on how much you are earning and not how much you owe. The earliest that you will start repaying is the April after you have finished your course.

The current UK threshold is £26,575 a year so until your annual earnings are above this, you will not begin to start repaying the loan. Once you are earning over £26,575, you will repay 9% of your income above the threshold. This threshold is likely to change each year.

The interest that you will pay on your student loan whilst you are studying is the Retail Price Index (RPI) plus 3%. RPI is currently 2.4%. This will apply until the April after you have completed your course. The interest rate will then be dependent on your income:

 

Source: https://www.gov.uk/repaying-your-student-loan/what-you-pay

 

If you have not repaid your loan after 30 years from when you are due to start repaying, any outstanding balance will be cancelled.

Students could have up to £1,500 cancelled from their Maintenance Loan balance by the Welsh Government when they start repaying. Find out more about who qualifies for the partial cancellation policy on https://gov.wales/student-finance-partial-cancellation- scheme?_pageid=93,6886489&_dad=portal&_schema=PORTAL

Appendix D

Financial Support – Northern Ireland

The majority of students will require help to cover their tuition fees and costs of living. The financial support available in Northern Ireland is as follows:

Tuition fee loan

This loan is paid directly to your University to cover the full cost of your course.

Student contribution loan

If you plan to study in the Republic of Ireland, you will not be required to pay tuition fees. However, most Universities will require you to pay an annual student contribution fee, to a maximum of £3,000.

This loan is funding to help pay the cost of the student contribution fee. It will be paid directly to your University.

Maintenance loan

This loan is paid to your bank account at the start of each term. The loan is means tested, meaning that the amount you will get is dependent on your household income – for most undergraduate students, this will be your parents income. The amount you receive will also depend on where you study and whether you live at home or have moved out.

The following table shows the maximum maintenance loan available (2020/21):

In your final year of study you will receive a lower amount, as once you have finished your course, you are no longer considered as a continuing student. You should ensure that this is factored into your finances.

Maintenance Grant

You may be eligible for a maintenance grant, which could reduce the amount of maintenance loan that you need to borrow. The maximum grant available is £3,475 (2020/21) and the amount you will get is dependent on your household income. It is only available if your household income is below £41,065.

Special Support Grant

You may be eligible for a special support grant, which will be paid on top of your maintenance loan. The maximum grant available is £3,475 (2020/21) and the amount you will get is dependent on your household income. It is only available if your household income is below

£41,065 and you are eligible for certain qualifying benefits.

If you are eligible for a Special Support Grant, you will not receive the maintenance grant.

Further support is available for certain individuals. To find out more information and to apply for your student finance, please follow the below link:
https://www.studentfinanceni.co.uk/

Repaying your loan

Once you have completed your studies and are earning above a certain limit, you will begin to repay your loan (total of both tuition fee & maintenance loans). Grants do not need to be repaid.

The amount that you repay is based on how much you are earning and not how much you owe. The earliest that you will start repaying is the April after you have finished your course.

The current threshold is £19,390 a year, so until your annual earnings are above this you will not begin to start repaying the loan. Once you are earning over £19,390, you will repay 9% of your income above the threshold. This threshold is likely to change each year.

The interest that you will pay on your student loan is currently 1.1% (2020/21).

If you have not repaid your loan after 25 years from when you are due to start repaying, any outstanding balance will be cancelled.

https://www.gov.uk/repaying-your-student-loan/what-you-pay