Student Life- Finance and budgeting

What do you think the difference between a normal bank account and a student bank

account is?

Student bank accounts

These are different to normal bank accounts as they offer a much larger interest free overdraft.

What is an

overdraft?

How much is a

typical overdraft

Overdrafts

Money that you can use when you go below £0. You have to pay this money back eventually but you don’t face any financial penalties for using it (unless you go over the limit).

When do I pay back my

overdraft?

Most student bank accounts will offer an

extra 1-3 years of 0% overdraft.

1. When looking at overdrafts, look for the ‘guaranteed’ overdraft limit rather than the ‘up to’ limit. The banks that offer an overdraft ‘up to’ a certain amount will often offer you much less.

2. The banks can also ask for the full overdraft amount back at any point when your time is up with only months notice or you will be charged a percentage.

Dos and Don'ts when applying for a bank account

Do• Look for the account with the largest overdraft.• Do sign up for online banking.

Don’t • Go with a bank that is the one you are currently

with / your family use (unless it offers the best deal).• Open more than one student bank account.• Get drawn in to using student credit cards. The

interest is massive!

What are the best current options? Bank name

Overdraft facility In credit interest

Added Benefits Charges on unarranged O/Drafts

Santander £1,500 (3 years)

1% Young Person railcard (£120)

For 4 years

£5 daily charge(£10 max month)

Co-op Bank

Y1: £1,400Y3: £2,000

None None 18.9% EAR£15 unpaid item

Halifax Y1: £1,000Y3: £3,000

0.1% 25% Breakdown

cover

24.2% plus monthly fee of

£28

HSBC Y1: £500Upto £3,000

2% 18 free album downloads

£25 per item charge

NatWest Term 1 - £500Term 3 - £1,000

0% Free Tastecard(£80)

£5 daily charge

RBS Yr1 - £500Yr3 - £1,000

0% Free Tastecard(£80)

17.8% EAR

Lloyds TSB

Yr1-3 £1,500Yr4-6 £2,000

0.1% Free NUS card £5 daily charge(£10 max month

The Facts

Universities and colleges can charge tuition fees of up to £9,000 Tuition Fee Loans will go up to cover the higher fees Part-time students can apply for a Tuition Fee Loan (replacing grants) for the first time You don’t start repaying your loan until you earn £21,000 (up from £15,000)

• A Tuition Fee Loan to cover your tuition fees in full

• A Maintenance Loan for living costs like rent (full-time students only)

• A Maintenance Grant if your household income is less than £42,600 (full-time students only)

• Scholarships and bursaries from colleges and universities 

• Extra financial help if you have a disability or children or adults depending on you

What will I get?

Only full-time students can get Maintenance Loans and Maintenance Grants for their living costs.

Maintenance Loans• The maximum Maintenance Loan for new

students starting from 1 September 2014 is:

• £5,555 if you live away from home and study at a university or college outside London

• £7,751 if you live away from home and study at a university or college in London

• £4,418 if you live at home

Loans and Grants for living costs

You can also apply for a Maintenance Grant if your family income is below £42,620.

You can get:

• £3387 if your household income is £25,000 or under • £50-£3387 if your household income is between

£25,000 and £42,620

• These loans and grants are paid into your bank account at the start of each term, once you've registered on your course.

Maintenance Grants

• You may be able to get a bursary, scholarship or award directly from your university or college. The National Scholarship Programme helps students with a family income of £25,000 or less.

• Bursaries and scholarships do not have to be paid back.

Scholarships, bursaries and awards

Tuition fee loan

Maintenance loan

Maintenance grant

•Money that covers the full amount of your tuition fees. •This money goes directly to the university. •You only have to start paying back the loan when you are earning over £21,000 a year

•This covers the cost of living and any materials you may need for your studies e.g. Books•Paid into your bank account in 3 termly instalments (Oct/Jan/May)•You only have to start paying back the loan when you are earning over £21,000 a year•All students get at least 75%; the remaining 25% is income assessed

•This covers the cost of living and any materials you may need for your studies e.g. Books•Available to all students whose household income is below £42,620•Paid into your bank account in 3 termly instalments•You NEVER pay this money back!

The Differences

Anyone receiving the FULL maintenance grant and who are on a course charging full fees will receive a bursary that matches the difference between the maintenance grant and the cost of the tuition fees.

Many universities are offering more than the minimum amount.

Bursaries

Online application at http://www.directgov.uk/studentfinance

• The latest you can apply for student finance

• Up to nine months after the start of the academic year if you’re a full-time student

• Up to six months after the start of the academic year if you’re a part-time student

How and when can I apply?

Your income per year 

 Monthly repayments

 £21,000 and under  no repayments

 £25,000   £30

 £30,000   £67

 £40,000   £142

 £50,000   £217

 £60,000  £292

How much will I repay?

Earning £25,000 for 30 years would mean that

you pay back £360 a year which over 30 years is

£10,800. Meaning you could write off a

potential £32,700

For example:

• Additional payments Students can pay back all or some of their loan at any time without incurring an early repayment charge. 

• If you go abroad... for more than three months, you need to let the Student Loans Company know. You need to fill in an overseas income assessment form and give evidence of your income or means of support while you’re abroad.  You’ll then be given a repayment schedule.

• After 30 years any remaining debt is wiped out. The 30 years start from the April after you graduate or leave your course.

• Student loans are not included when carrying out a credit check. This means that you student debt will not count against you when applying for credit cards, mortgages etc.

Do you know?

What do you think a young person living independently spends their

money on?

In your groups write a list.

Budgeting

RentElectricity / gas

billsWater billsTV Licence

Phone contractInternet

Supermarket shopMeals outSocialising

Car Tax

TakeawaysBooksTravel

AlcoholClothes

TaxisCar insurance

MusicPetrol

Public transportCigarettes

Give yourself a point for every one of the suggestions you got that are listed below

1. Fill in the worksheet with your estimate of how much each item on the list would cost.

Task

The winning team will

get a prize. You only have 5

minutes to do this!

Answers

Gas and electricity per month- £70Rent per week - £100 per weekVirus protection – £60 per yearColour TV licence per year -

£142.50

Answers

Bread (1x800g loaf)- 90pBeans (1x425g tin)– 45pBananas (6pack) – 1.40 Pasta (1kg) - £1.40Coffee (200g jar) - £2.19Minced beef (500g)

£2.99Chicken (500g) - £5.00Stir fry veg (350g) -

£1.00

Potatoes (1kg) - £1.40Toilet roll ( 4 pack) - £1.78Washing up liquid - 89pMilk (2pints) - 89pApples (bag of apples) -£1.90 Pure Orange Juice (1 litre) - £1.58Tuna (4 pack) - £3.99

Student Life

Organise yourselves into 6 groups of equal size

Use the sheet providedIncomings Outgoings Running total

In the incomings and outgoings write down the reasons WHY you gained or

lost money.

InstructionsYou each have £1100 (a similar amount to what you would

receive in your first maintenance loan allowance)

CHANCE cards – squares with a ?, train stations and go to jail square

COMMUNITY CHEST cards – squares with a chest and free parking and if you land DIRECTLY on GO

JAIL – You must pick up a CHANCE card. You can leave on your second throw and pay a £50 fine

STOP!!!

You need to pay for your accommodation

Pay out £600

STOP!!!Your new student loan comes in. Add £300

If you land on a BROWN or ORANGE square you must now pick up a CHANCE card

If you land on a PINK or NAVY square pick up a COMMUNITY CHEST card

Did anyone end up with a minus amount e.g. -£300? (this is why it is useful to have a

student bank account with an overdraft)

What were the biggest expenses you came across?

Were you surprised by how much anything cost or by any of the things you had to pay

for?