Results of study lead to NUS warning of poverty crisis, against backdrop of UCL rent strike and scrapping of maintenance grants
Nearly a third of young people in the UK say they are too scared to look at their bank balance, a survey has found, as student unions warn of an emerging national crisis.
The finding, which comes during national student money week, raises concerns about a generation struggling to service debt as they try to get an education in the hope of securing their financial future. It is feared money worries are deterring many from taking up the opportunity of higher education.
The research also found that financial struggles were having a psychological impact, with 46% of 18 to 24-year-olds reporting losing sleep over their financial situations. More than a third said they expected to go into debt this year.
Shelly Asquith, the National Union of Students vice-president for welfare, said the findings tally with NUS research into student debt, which found that more than half of students struggled to cover basic living costs.
"With rents on the rise and grants being cut back, we are facing a national crisis of student poverty. This is not just having an impact on students' wellbeing, but on who can and cannot access education. At NUS, we are making the case for more generous financial support and calling for action on the living costs students face every day," she said.
Ministers were last month accused of a "legislative sleight of hand" after they used a statutory instrument to scrap maintenance grants, which had helped half a million of the poorest students pay for university life.
Despite opposition to the measure, where students took to the streets to demand "grants not debt", an attempt by Labour to table an annulment motion aimed at blocking the proposal was voted down by 306 to 292. Students beginning their studies from September 2016 must now borrow the money they need to support themselves.
Soaring rents are also having a huge effect. Students at University College London, who face paying £542.36 per month for a single room, have gone on rent strike until their demands for affordable housing are met.
Researchers, who conducted 2,000 telephone interviews with UK consumers, found that 31% of young people admitted struggling to budget and often losing track of their spending. Payment technologies such as contactless bank cards and Apple Pay led 25% to spend more money because they were quicker than alternative methods.
Chris Coates, 23, a sports management student at Coventry University, said he and his peers often prioritised convenience over responsibility when it came to spending money.
"It's a vicious circle – the longer I don't check it, the higher the pressure when I do finally get round to taking a peek. My money management has led to some pretty embarrassing situations – my card actually got declined on a first date once and she ended up having to pick up the tab. Not a great start," he said.
David Webber, the managing director of Intelligent Environments, a developer of online banking software, which commissioned the research, said banks must do more to help hard-up young people keep track of their spending.
"This 'ostrich effect' is one that must be turned around if young people are ever to regain control of their own finances. Greater visibility around spending habits will make people more aware of their bank balance, making it harder for them to go into debt unnecessarily," he said.
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