One in three students struggles to make ends meet

Thursday, December 15, 2022

The NatWest Student Living Five Year Inflation Report reveals 35% of UK students run out of money before the end of each term, up 30% on last year’s figure, despite budgeting remaining a high priority for the frugal class of 21.


The situation is most extreme in Edinburgh, where two-thirds (67%) of this year’s students don’t make it through the term without running out of money.

NatWest’s First Student Living Five Year Inflation Report Published

The debut NatWest Student Living Five Year Inflation Report is published today. The first of its kind, this new longitudinal report tracks the evolution of critical aspects of student life identified over the last five years of NatWest’s Student Living Indexes. The new report reviews key changes in UK students’ sources of income, rental trends, attitudes towards budgeting, and spending habits.

This first report spans changes during the very worst of the Covid pandemic in 2020 and 2021, and the emerging impact of the current squeeze on living costs.

Positive changes

NatWest’s report has also identified several positive changes in students’ money management habits over the last five years. The report reveals the extent to which students appear to have learned valuable financial lessons during the Covid pandemic and more recently as a result of the current cost-of-living pressures.

Budgeting has remained high on the agenda for most students, in that they’re now planning their spending more carefully, or at the very least trying to do so.

Since the pandemic, students have become significantly (17%) more prudent in their spending habits. According to NatWest’s findings, more than one in four students (27%) now say they budget carefully and track their outgoings, compared with just over one in five (23%) five years ago.

Better at budgeting

NatWest’s report also reveals that students have substantially improved their ability to stick to budgets in the last five years. In 2018, nearly half (44%) said they tried to budget but didn’t always stick to it. By 2022, that figure had nearly halved, now standing at just 24%.

Moreover, the most frequent answer of those questioned this year (28%), say they feel confident about managing their money. Compare this to 2018, when 28% said they didn’t budget and 1 in 20 (5%) said they didn’t consider what they were spending at all. By this year, the number of those who don’t budget has almost halved (15%), whilst students who pay no regard to spending numbered just 2%, the lowest in the five-year study’s records. 

However, on-going financial pressure on students is clear. Money management remains a continuing source of stress for many students, but its impact has been gradually reducing. The proportion reporting stress reached a high of 23% in 2019, with 18% reporting stress around money management this year.

Laura Behan, Head of NatWest Student Accounts said: “Faced with considerable rising livings costs across the board, it’s of great concern that a third of students run out of funds before the end of each term. That being said, it is encouraging to report that students are taking a more cautious view towards managing their finances in the five years we’ve been studying their behaviour.”

“Although it’s reassuring to report that money worries are causing stress to slightly less students than five years ago, NatWest recognises that the numbers affected are still high, with nearly one in five stating money worries are a source of stress.

“We offer a range of tools to help, including spend categorisation in our mobile app so students can see exactly where their money is going every month, and a Round Ups tool to help develop a strong savings habit. Our budget calculator is a useful place to start at the beginning of each term.”