Next years students advised to use gap year to save

Aug 24, 2011   //   by sam   //   Banking and Savings Accounts, Money Saving Tips  //  1 Comment

With the massive increases in some university fees that are being introduced next year, it is more necessary than ever that students make the most of their money to stop themselves coming out with massive debts.

One spokeswoman for online resource Moneyfacts, believes that those wanting to go on to higher education should consider taking a year out in order to save money in ISAs. She went on to say that, where possible, students should priorities building up savings accounts before embarking on their degree course.

Currently, most British students will be getting prepared to start the 2011/12 academic year which starts in September, and the majority of these will more often than not plan on getting through their time at university on their student loans and in some cases an overdrafts on student accounts.

This can be very hard to do with tuition fees now averaging at the top £9,000 on top of the need to pay for groceries and utilities.

However, taking the advice of the Moneyfacts experts, by planning ahead and saving up for a couple of months prior to your course beginning, students can provide themselves with a strong financial safety net that could help them to avoid serious financial debt on completing their course.

“It is a good idea if you can do it – if you can put money aside and you’re prepared to do that, especially going forward when everyone’s going to be on the news about the new fees structure,” she went on to say.

However this advice does come with a warning. Those who decide to take out 12 months to save are likely to be “caught by the new fees next year”, which in turn means an additional cost for university may detract from students savings significantly.

Despite this, the spokeswoman indicated that having a year’s worth of saved money is never a bad thing and may allow students to get through their time at university without having to lend as much money.

Research published on August 17th by Endsleigh showed that of the students they asked, 74 per cent felt dismayed at the prospect of having to budget effectively during their time at university, and 33 per cent stated that they were concerned about having to pay bills for utilities such as gas and electric.

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  • Peter Allen

    I’m not surprised! I struggled as a student and I had a part time job as well as a placememnt year that paid a decent wage – yet I still managed to rack up over £16k of debt from the student loan, not including any fees.

    Student accounts also come with 0% overdrafts which is great at the time, but still another debt that has to be paid off.

    Good luck to the new generation of students that will be racking up around £27,000 in fees alone!!