21st September 2016

Parents in the dark about students’ secret spending, and hit by £700 of unexpected uni costs

  • 70% of parents think their child does not have a credit card, yet 94% of students have one
  • A quarter of parents believe their child does not use an overdraft at uni, yet only 2% stay away from overdrafts
  • One in four Freshers spend their first student loan instalment in under a month

 

21 September, 2016: New findings from Endsleigh’s 2016 Student Survey show that many parents are in the dark about their child’s spending habits, as more than a quarter (28%) believe their child never uses an overdraft, when in reality, less than 2% of students surveyed said they never use the facility.

The study of over 4,300 students and parents also reveals a majority (70%) of parents believe their child does not have a credit card in their first year of studying, despite 94% of students saying they do own one. And those who have a credit card make good use of it - over half (58%) of students in this group said they use it always or regularly.

Likewise, students are failing to budget properly, with over a quarter (26%) admitting their first student loan instalment lasted less than a month, whilst almost two-thirds (60%) of students admitted it only lasted a couple of months. The first loan payment is usually made just a few days after registration in move-in week.

Two out of five (41%) parents admit money management is their main concern for their children’s first year of university; and the majority (70%) believe their child also worries about finances. Although managing their money ranks high on many (44%) students’ list of concerns, it comes second after achieving academic success, followed by applying for jobs after graduation (40%).

To add further potential worry, the survey finds UK households are hit by £683.30 of unexpected costs when a student goes to university. Food is the highest of these - for almost a third of students and a quarter of parents; followed by course book costs which took nearly a fifth of students and a quarter of parents by surprise.  After food and course book costs, the price of travelling to and from university was unexpectedly costly for over one in ten students and one in five parents.

 

Unexpected costs

Parents

Students

Food

25%

32%

Course books

25%

17%

Travel

20%

14%

 

Many young people starting university this autumn are falling through a money advice gap - receiving no advice about money matters, such as how to budget before they begin their higher education.

Although it is encouraging  that many Freshers do receive money advice - 70% of parents said advice was given by parents/family - it remains concerning that one in five (19%) parents know their child did not receive any, or don’t know if they received any.

Commenting on the findings, Sara Newell, Director of Student & Graduate Markets, Endsleigh, said:

“Starting university is a life-changing experience – it brings greater independence and a wealth of new social experiences. But normal, everyday, apprehensions about fitting in and grasping a new subject can feel much worse when financial anxiety is added into mix. No young person who is preparing to start higher education this autumn should begin term without a basic conversation about money matters. Yet our study suggests one in five young people are doing just that – starting their new, independent life having received no money advice at all.

“We urge parents of young people soon off to uni to ensure their child doesn’t fall in to the student money advice gap. Encouraging them to take control of how they manage money at the start of term can alleviate financial stress later in the year. A few small changes can make a big difference to their pocket and reduce everyone’s stress levels - giving parents peace of mind and the student financial confidence, so they can focus on making friends and getting the grades.”

 

Five money tips to help Freshers get to grips with finance away from home

1. Have a money chat - talk to someone you trust about basic money management

2. Keep a weekly budget -use it to set monthly spending limits

3. Get covered - protect your precious gadgets from loss and theft

4. Hit the university job shop - be sure you’re in the queue for the best jobs in town to help you enjoy uni with less money worries

5. Check your inventory - make sure you receive and check your inventory. Take photos of your room when you move in and out to avoid deposit disputes

Other key findings

  • More than one in ten parents (11%) admitted to discussing money matters with their child less than once a year (5%) or never (6%)
  • Almost half of the parents (46%) surveyed said their child’s main source of income at university is a student loan
  • Almost one in five (18%) parents said that when their child first went to university, the biggest negative effect it had [on their life] was on their own

 

Note to Editors

Endsleigh’s 2016 Student Survey has been undertaken in collaboration with the NUS Insight Team and OnePoll. The study comprises three separate quantitative surveys, totalling 4,372 parents and students: 

i. From 10th June to 12th July 2016 the NUS Insight Team surveyed 1,872 students about their experiences, expectations and motivations.

ii. From 1st to 20th July 2016 OnePoll surveyed 1,000 parents of undergraduate university students who lived away from home during their first year of university, about the students’ experiences, expectations and motivations.

iii.From 20th June to 11th July OnePoll surveyed 1,500 undergraduate university students across the UK about a range of topics, including gadgets, possessions and security.

Additional findings from the study will be published gradually during autumn 2016.

About Endsleigh

Endsleigh is the trusted brand for student insurance, and the only insurance provider recommended by NUS. Originally founded in 1965 to serve the student market, Endsleigh has since broadened its products and services for graduates and professionals, as well as being the preferred insurance supplier for a variety of trade unions and professional organisations.

The company offers a wide range of services including motor, home and travel insurance. Wholly owned by Zurich Insurance Group since 2007, today the company also offers a wide range of insurance products and solutions for both students, graduates and professionals, as well as being the preferred insurance supplier for a variety of trade unions and professional organisations.

Products include motor, home and travel insurance as well as business insurance through Endsleigh’s Business team and financial advice through the Endsleigh Financial Advice team.

More information can be found: www.endsleigh.co.uk/personal/financial-advice/.

For further information, please contact:

James Deacon – FleishmanHillard Fishburn

0208-618-2978 | 07525-223-924 | james.deacon@fhflondon.co.uk

Nancy Baynes - FleishmanHillard Fishburn

0208-618-2846 | 07872 827 683 | nancy.baynes@fhflondon.co.uk

Rachel Veevers – Endsleigh

01242 866196 l 07841781917 l rachel.veevers@endsleigh.co.uk