Cost of living: How will students be affected?

The UK is heading towards a cost of living crisis, with increased individual and household costs, including a rise in National Insurance payments and Energy Bills.

Maud Webster
15th February 2022
Flickr

The UK is heading towards a cost of living crisis, with increased individual and household costs, including a rise in National Insurance payments and Energy Bills.

These measures are set to impact all demographics, but students and graduates are likely to be one of the most affected groups.

Energy bills are set to rise to the highest levels since 1970, as Europe enters an energy crisis. UK homeowners can expect bills to go up to a £2000 yearly average when the price cap rises in April. 

Information obtained by the Guardian suggests that from the 1st April, unit prices for gas and electricity will be double the unit price charged at the start of 2021.

The Government has introduced a repayable energy bill discount, where all households will receive £200 off their energy bills, with the expectation that this loan will be returned at the rate of £40 a year (2023 until 2028). 

As reported by Newcastle’s Chronicle, students who will have moved out by the time it comes to paying the loan back the £40 loan repayment will still be applied to every energy bill, even if the household didn't receive the £200.

Money Saving Expert founder Martin Lewis highlighted an example in which students may suffer a financial loss under this scheme:

Five people share a house in Oct then separate. They get 1 x £200 discount off their bill. They then all move out and live alone. From the following April all five of them will have bills £40/yr higher.  

Another financial increase set to disproportionately affect young people is the freezes on income tax brackets and the student loan repayment threshold, coupled with the rise in national insurance payments scheduled for April.

Researchers suggest that a graduate on a £27k salary will see deductions rise from 18% to 22% of their pay - predicting that disposable income will drop by nearly thirty percent.

Energy bills increase and the changes to National Insurance payments, along with rising food prices and the housing crisis may place many students and graduates in precarious financial positions in coming years.  

One Newcastle University student said, "they sell uni as the best years of your life but if we can't afford to enjoy them, where does that leave us? The idea that it's only going to get worse is a very miserable prospect.”

(Visited 120 times, 1 visits today)
AUTHOR: Maud Webster
she/they | third year architecture & urban planning student @ newcastle | co-head of culture for the 21/22 academic year

Leave a Reply

Your email address will not be published. Required fields are marked *

ReLated Articles
magnifiercross
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram
Copy link
Powered by Social Snap