Cost of Living Crisis in the UK Takes a Toll on Student's Lives

The UK cost of living crisis has reached terrifying ratios, with severe consequences for individuals and households nationwide. As the cost of vital commodities continues to rise, a significant portion of the population has been forced to dip into their savings. The cost of living crisis news in the UK is on everyone's screen these days due to ongoing inflation.
As per the latest news and insights, the main drivers of inflation accelerating the rising cost of living crisis in the UK are: 
1. Pandemic supply chain bottlenecks,
2. Increased demand for goods and services as the economy recovers, 
3. Political tensions resulting from commodity price trends such as energy
As of January 2023, the cost of living crisis in the UK has risen compared to last year, according to 92% of UK citizens. 67% of households reported monthly cost increases adding to their cost of living in the UK.
According to the Office for National Statistics, in October 2022, the annual inflation rate hit 11.1%, a 41-year peak making it one of the worst cost of living crisis in the UK. In May 2023, both Consumer Prices Index, including owner occupiers' housing costs CPIH and CPI, experienced inflation changes.
The annual inflation rate of the United Kingdom in May 2023 was 8.7%. The inflation rate reduced compared to October 2022 but was still higher than other economies.

The United Kingdom has a remarkable reputation for its excellent education system, vibrant cultural scene, and welcoming attitude towards international students. It's no wonder that thousands of students worldwide relocate to the United Kingdom each year to pursue higher education. With the ever-increasing influx of students and the prevailing cost of living crisis in the country, students facing the burn of the rising inflation rates in the UK come as no surprise. 

How is the cost of living crisis in the UK affecting students? 

The UK cost of living crisis is significantly impacting students, causing financial problems and raising concerns about the affordability of higher education. According to the Guardian report, a survey was conducted by the Higher Education Policy Institute (Hepi). Approximately half of the sample of 10,000 students responded that the cost of living crisis in the UK is hampering their academic performance. The survey reports that students are adopting additional paid employment to fund expenditures, facing difficulty due to poor nutrition, financial stress, and missing courses. This is because of their inability to afford travel fares in the purview of the rising costs in the UK. 
The following points shed light on how the cost of living crisis adversely impacts students in the UK.

1. Working extra hours

Students started working extra hours for the money to fulfil their daily needs and to pay for their education costs. As surveyed by the Higher Education Policy Institute (Hepi), students responded that they worked for money throughout the academic year, with the majority stating that they used their earnings to pay for their education. 
According to the survey, 34% of UK students had jobs while studying in 2021, rising to 45% in 2022 and 55% this year. Students above the age of 26 and those with children or caring responsibilities were more likely to need to work for extra money. The stats show that the cost of living crisis in the UK is negatively affecting students' university experience.

2. Loan amendments

The student loan amendments impact students in England starting university in September 2023 and the existing borrowers. For the new students joining from September of 2023, the threshold at which the student loans will be repaid is lowered to £25,000. The Lower Repayment Threshold now asks the students to repay their loans once they earn more than £25,000 rather than £27,295 until 2027 and will then be increased with the inflation post-2027 as measured by RPI (Retail Index Price). The amendment also brings in an extended repayment term where the repayment term is extended from 30 years to 40 years. Measured by the Retail Price Index (RPI), the maximum interest rate on student loans will only be set at the inflation rate. The salary repayment threshold for the existing borrowers will be £27,295 for 2024-25. However, some experts consider it an increased financial burden as the graduates are expected to start repaying their loans at a lower income level. The extended repayment period also implies that the borrowers would be in debt for longer, which could be stressful. Additionally, relying upon the RPI inflation rate might make the interest rates highly unpredictable.

3. Increase in food prices

Food pricing is increasing sharply due to the cost of living crisis in the UK. According to survey by the Sutton Trust, one in four students is skipping meals and relying on hardship money and family help. One student stated that "they only eat two meals a day and spend less money on food."|
Moreover, the survey also stated that 63% of students spend less on food and essentials, with 28% skipping meals to save money on food. Students from lower socioeconomic backgrounds were more likely to report skipping meals to save money on food (33% from working-class families compared to 24% from middle-class families).

4. Accommodation crisis and rising rents

The UK cost of living crisis affects the student housing shortage and rental prices, creating student challenges.
According to the Save the Student survey,  50% of students reported housing concerns. Students were returning to their cities due to insufficient student accommodation in the UK to match the growing demand.
According to the survey, 25% of students have been looking for accommodations earlier than usual due to the student housing shortage. The survey also states 42% of students haven't signed their next rental contract for 2023/24 but will do so. 32% have not signed their next contract and do not intend to do so, and 26% have already signed their next contract.
As per the Unipol and NUS (National Union of Students), the average annual rent for student accommodation in the UK has also seen a 16% increase in rent, standing at £7,374.

1. The cost of student accommodation in UK university halls has increased by 60% in the past decade. 
2. Private providers control 70% of the surveyed bed spaces, as universities outsource their accommodation provision. 
3. Private operator bed spaces are about a quarter (24%) more expensive than what institutions provide.
4. Older stock with lower rentals is being replaced with ensuite and studio rooms, and the supply of low-cost housing is decreasing.
5. The UK cost of living crisis greatly influences student tenant referencing success rate, falling from 50% to 40%. Rising household costs, such as rent and other bills, have put financial constraints on students, particularly those from low-income families. As a result, more students are failing reference checks, making it difficult for them to find rental arrangements.
6. The rising cost of living is also attached to the implications of Brexit. The major victims are international students looking for affordable student accommodation. Students are under colossal stress due to uncontrolled demand for suitable housing alongside referencing check pressure.

The shortage of affordable student accommodation in the UK is particularly prominent in London, where rents are significantly higher (an average of £663 a month) than in the rest of the UK. This scarcity of affordable rooms puts financial strain on students and limits their housing choices. Moreover, accommodation rent bill is one of the major problems students face in the cost of living crisis in the UK.
According to the Save the Student survey, over one-third survive on less than £50 per month after paying rent and fees. Many students face a monthly shortfall compared to their average expenses, and rising rent costs contributing to financial difficulties.

5. Effect on Students' Well-being and Studies

Besides increasing students' precarity, the cost of living crisis in the UK threatens students' mental health and overall well-being. One of the students stated, "I never go out with my friends and classmates, so I stay at home alone". It's clear from student testimony that one of the major consequences of the rising cost of living crisis in the UK is living alone and isolated.
According to the Save the Student survey, the cost of rent impacts 72% of students' physical or mental well-being. Regarding physical health, 10% said it is severely impacted, while 39% said it is moderately impacted. 
Along with decreasing mental and physical health, evidence suggests that the cost of living crisis in the UK has hampered students' ability to study. The financial pressures caused by the rising cost of living crisis in the UK have led many students to consider dropping out of their studies. 
According to the ONS survey, more than three-quarters (78%) of students express concern that increased living costs will impact their academic performance. Additionally, over a third (35%) of students said they are less likely to continue their studies after finishing their course. Moreover, apart from academic pressure, the soaring cost of living crisis in the UK led to other living expenses.

6. Impact on other living expenses

There is no doubt that the UK is undergoing a severe cost of living crisis, with energy costs doubling weekly and interest rates expected to rise to 4% over the coming year. According to the NUS's Cost of Living Survey, a considerable proportion of the student population is at risk of incurring significant debt on top of their student loans. 
33% of students reported relying on credit cards to help with day-to-day expenses, while 24% used non-traditional credit. In addition to reducing their home energy consumption, many households significantly reduce other areas of life to pay their electricity bills. Furthermore, 51% of students are reducing their transport expenses. Here are some other categories where students are cutting down their expenses.

More than half of students and apprentices are not attending classes because they cannot afford travelling expenses. 
The government and universities offered living support packages to address all these problems faced by the students due to the rise of the cost of living crisis in the UK. International students can get support from the student accommodation platforms while selecting their ideal student accommodation.

Student Support Services‍

In response to the cost of living crisis in the UK, universities, government, and student accommodation providers have stepped up and are putting in all their efforts. The unwavering support of various organisations is helping students throughout. Listed below are some noteworthy assistances that are being provided to the students:

1. Support from University

Universities acknowledge the significant impact of the student cost of living crisis in the UK, particularly regarding mental health, financial management, and academic continuity. Students concerned about their financial state can contact their university to find out if they are eligible for additional funds, such as hardship funds in England and Wales and discretionary grants in Scotland. Below are some help the universities offer:

1. Universities are increasing funds available for emergency financial assistance to help students facing financial hardship.
2. The University of York creates a Household Energy Grant, which provides £150 to students in all student homes for energy expenditures.
3. The University of Essex provides subsidised lunches and has increased its hardship fund to £5 million.
4. To combat food insecurity, universities offer food vouchers and ensure access to food banks for students struggling to afford necessities.
5. Some universities provide free or subsidised transportation.

Universities actively engage with student unions, increase hardship support funds, and implement targeted support measures to alleviate students' challenges. Moreover, the UK government has taken steps to address the challenges faced by students.

2. Support from the Government

Government supports students by increasing living cost loans, grants, student premium funding, subsidies for energy bills and meals to support students. 
Here are a few ways the government supports students to deal with the UK cost of living crisis.

1. According to the UK Government, living cost loans and grants in England have risen by 2.3%, and there is £261 million in student premium financing.
2. Scotland imposes a nationwide rent cap. During this time, students living in university halls and PBSA will not have their rent increased.
3. Despite the NUS's proposal for the government to implement a "tailored student cost of living support package", only general cost of living assistance is available.
These measurements only apply to a specific group of students.

3. Support from the Student housing providers

A student accommodation booking platform can play a significant role in helping students deal with the cost of living crisis in the UK. Here are several ways in which such a platform can assist:

1. Affordable Accommodation Options: The platforms can offer accommodations tailored to students' budgets. By partnering with various housing providers, the platform can curate a diverse selection of affordable accommodations, including shared flats, student residences, and PBSA. Amber took on the challenge of resolving the enormous issue of finding adequate rental housing for university students. We provide over 1 million well-furnished rooms in over 250 cities globally. Amber delivers a wide range of room types that can satisfy every student's demand.
2. Transparent Pricing and Comparison: The platforms can provide detailed information about the rental prices, inclusive amenities, and additional costs associated with each accommodation option. We at amber offer transparency and a price match guarantee. Students can compare different properties and make informed decisions based on budgetary limitations.
3. Special Discounts and Offers: Platforms can collaborate with housing providers to negotiate special discounts and offers exclusively for students. This can include reduced rental rates, waived administrative fees, or inclusive utility packages, helping students save money on their accommodation expenses. amber offers numerous student discounts and offers.
4. Scholarship programs: Choosing the university of your choice is difficult due to the rising cost of education internationally. Some students may not have financial assistance. These platforms can inform students of the scholarship programs that can help students to save money as much as possible. Amber Scholar service can support students from different academic and social-cultural backgrounds.
5. Resources for Financial Assistance: The platforms can provide information and links to resources that help students access financial assistance programs, grants, loans, or hardship funds offered by universities and external organisations. Amber offers information to help students start their student loan research, including a list of some of the best student loan lenders. Furthermore, our International Students' Guide to Managing Finances can guide students to save themselves from pennilessness at the end of every month. Amber+ is a service that is linked with lots of services that aim to improve the student experience.

In conclusion, the growing cost of living crisis in the UK has caused substantial obstacles for students, affecting many aspects of their academic lives. Students face various challenges, including working more hours to fund living expenses, dealing with loan issues owing to insufficient financial support, rising food prices, and managing the shortage of affordable housing and rising rent. On the other hand, universities, governments, and booking platforms are stepping in to help address these challenges.