Two thirds of students live in overdraft with parents picking up the bill

3 Sep, 2018

03 Sept 2018 They may have a reputation for being more concerned with planning big nights out on the town than getting down to serious study, yet according to new research money is the single biggest cause of stress for the current crop of students.

For the majority of students an overdraft is essential, with around two thirds (65%) of students living off them, as they balance studies, socialising and surviving on a diet of pasta and beans on toast.

But when it comes to overspending, the poll from Nationwide FlexStudent – the UK’s only completely fee-free student account – reveals four in ten (44%) parents cover their children’s overdrafts as a student, either in part or full, with boys twice as likely to be bailed out by the Bank of Mum and Dad when they finish university. One in five boys get their parents to pay off the entirety of their overdrafts versus just one in ten girls.

The survey of 1,000 students also shows that since money management is new to them, close to two thirds (62%) think of their overdraft as an extension of their bank balance.

However, students are also savvy when the going gets tough, with nearly half of those surveyed having missed out on social activities to cut back on spending, while more than a third (38%) have got a job to stave off further borrowing.

The national poll reveals money as the biggest cause of sleepless nights for students, ahead of workloads, social life and relationship issues. Around two thirds (64%) listed money as one of their biggest burdens, with workload bothering just over half (53%), accommodation preoccupying just over a quarter and social life impacting just over one in five (22%).

The top five biggest university causes of stress are:

Top 5 stresses at University % worrying
1 Money and Finances 64%
2 Workload 53%
3 Accommodation Issues 28%
4 Social Life 22%
5 Relationship Issues 20%

When asked why students find their finances so hard going, a lack of experience was the main theme. One in five (20%) confessed to not being prepared to manage their money, while more than half admitted having no idea where to find financial help while away from home.

Around two thirds of students wish that they had been taught how to budget more effectively before moving to university, and more than a third didn’t realise how much it costs to live away from home. Worryingly, almost a quarter (23%) had failed to budget enough to cover their basic household bills.

Carl Burke, Nationwide’s Head of Current Account Products, said: “Starting university can be a daunting time without the added pressure of managing money on your own. As our research shows, money is the single biggest worry for students, with many not having had experience of budgeting.

“That’s why Nationwide has created a student current account that is simple and flexible to use, with an interest-free and fee-free overdraft that allows students to stay in control and help relieve one of the main pressures of student life.”