As the start of the academic year approaches, new data from Barclays reveals how economic realities are impacting the way students are living, socialising and budgeting. From choosing to work more, live at home, and cut back on alcohol – the research highlights how the rising cost-of-living requires university and college students to be more finance-focused than previous generations.

The Barclays report, which combines proprietary student spending data1 with a survey of over 2,000 current and prospective students2, reveals that millions of higher education students3 across the country are planning to reshape their university and college experience, despite rising costs.

This comes as students’ essential spending has increased 13.3 per cent year-to-date (YTD) – almost triple the 4.5 per cent increase felt by the UK population overall. As a result, after necessary outgoings – such as rent, tuition fees and groceries – students say they are left with £235 of monthly disposable income, on average.

Key Findings:

• Rising prices mean students have seen their essential spending increase three times more than the average Brit so far this year.

• To keep finances in check, the majority are spending less on nights out, with 14 per cent reducing or cutting out alcohol, while two in three work full or part-time.

• Despite cutting back in some areas, non-essential spending remains strong in categories including entertainment and travel.

• Student spending habits diverge from the national average in key areas – clothing and takeaways account for a greater share of total outgoings.

• Financial Adviser Emmanuel Asuquo provides his budgeting advice for students, while Barclays Going to university? guide offers practical tips on making the most of student life.

Savvy scholars: students take control of finances despite money worries

Seven in 10 (71 per cent) students have concerns about managing their money for the upcoming academic year, and the majority (64 per cent) of current students feel more worried than they were last year. However, despite financial pressures, a similar proportion of students are confident in their ability to keep up with essential monthly costs (67 per cent) and to live within their means (60 per cent).

To accommodate rising costs, four in five (82 per cent) are already budgeting for the upcoming academic year, and one in eight (12 per cent) say they are determined not to let the cost-of-living squeeze negatively impact their university experience.

Supermarket savers: students swap meals out for home cooking

A third of students (34 per cent) are cutting costs by finding ways to spend less on the weekly shop. Of this group, just under six in 10 (58 per cent) are making more meals at home and 39 per cent are batch cooking to keep costs down.

Almost three quarters (73 per cent) of these supermarket savers are dining out less often, with much of this spend shifting to the less expensive option of takeaways & fast food. Barclays data shows that students’ spending on restaurants is down -8.8 per cent year-on-year, while their spending on takeaways & fast food is up 6.4 per cent. The latter category accounts for a sizeable 7.2 per cent of students’ total spend – more than double the 3.5 per cent national average.

Other money-saving behaviours include buying “pre-loved” items such as clothing, technology, books and course materials (34 per cent), selling clothes and other items on second-hand sites (25 per cent), and shopping in charity shops (18 per cent). In addition, 17 per cent of current students are adopting budgeting and money-saving hacks they see on social media.

“Generation sensible”: students are cutting back on socialising and alcohol to save money

Spending less on going out emerged as the most popular way for students to reduce outgoings, chosen by over half of respondents (53 per cent). This is reflected in Barclays’ transaction data, which shows that student spending on pubs, bars & clubs slipped -0.7 per cent year-on-year, compared to an uplift of 5.9 per cent for the general population.

A proportion of this spending is shifting to groceries (up 14.4 per cent year-on-year), as students purchase food and drink to entertain friends at home. Of those cutting back on nights out, 36 per cent say they’re “pre-drinking” at home so that they don’t have to buy as many drinks out, and one in five (20 per cent) is instead choosing to organise more house parties, dinner parties, and nights in with friends. Over four in 10 (44 per cent) of this group are buying and/or drinking less alcohol, and 26 per cent are cutting out the booze entirely, representing 14 per cent of students overall.

Nevertheless, pubs, bars & clubs are still very much part of the university experience, accounting for 3.2 per cent of students’ overall spending YTD, compared to the national average of 2.1 per cent.

Home birds: students living at home or with parents

Almost two in five students (38 per cent) are making the economical decision to live at home or with their parents this upcoming university year – a figure which rises to 43 per cent for first-year students. Among these home dwellers, over a quarter (27 per cent) say they want to save money and avoid spending on rent, and a third (33 per cent) chose their university based on its proximity to home, while 15 per cent made the decision due to the rising cost of living.

Close to a quarter (23 per cent) of first years plan to live in halls or their institution’s accommodation this upcoming year, of which half (48 per cent) are opting for the least expensive option available.

Side-hustles: most students taking on paid work

The majority (68 per cent) of students are balancing the books by taking on paid employment: 57 per cent are working part-time, and 11 per cent are maintaining a full-time job alongside their academic commitments. Six in 10 (62 per cent) of those employed say working while studying is a necessity due to the rising cost of living, while 47 per cent say they could not keep up with their monthly expenses without their job.

The research shows that the hustle can be a challenge for some students, as a quarter (26 per cent) of those with jobs struggle to find a balance between working and studying. However, an optimistic fifth (20 per cent) of working students believe having a job while studying will better prepare them for the world of work and set them up for future success.

Spending big on fashion, travel and entertainment – even when times are tight

Despite inflationary pressures, the transaction data indicates that students are still willing to treat themselves, especially when it comes to creating memorable experiences; compared to last year, student spending on travel and entertainment has increased by 18.1 per cent and 10.7 per cent respectively.

Fashion also remains a priority, with clothing accounting for 7.1 per cent of overall student spending, compared to 4.8 per cent for the general population. When asked about what they’re willing to splurge on even when times are tight, clothes and accessories came out on top (37 per cent), followed by travel and holidays (36 per cent), and everyday treats (36 per cent).

Esme Harwood, Director at Barclays, said:

“Many students are having to adapt in the face of climbing costs, but they remain resilient and resourceful, finding clever ways to balance their budgets. Whether it’s cutting back on alcohol or taking on more paid work, students are responding to and defining a transformed university experience.”

Financial Adviser, Emmanuel Asuquo, offers advice4 to students on how they can budget for the year ahead:

“My chief piece of advice to students is to start budget tracking. It sounds tedious, but it’s particularly important for those with student loans to understand how much they’ve got coming in and where their money is being spent. That way they can truly enjoy their university experience, by ensuring their ‘needs’ are covered, and setting aside some cash for ‘wants’ – whether that’s a holiday or a night out with friends.”