Soaring energy bills, rising food prices and the threat of recession: the “class of 2022” has entered the worst cost of living crisis in decades.
Not that things have been easy for young adults for a while. Shreya Nanda, an economist at the Institute for Public Policy Research’s Center for Economic Justice, says they’ve been facing their own crisis “for many years – in terms of stagnant wages, rising rents, housing high marginal taxation faced by young people and their state expenditures are reduced”.
Over the past few weeks, university graduation ceremonies have taken place across Britain, with some scheduled for this month or later in the year.
With shifting student loan repayment thresholds, job insecurity and rising rents, those who have completed their education and celebrated their achievements with family and friends now have tough decisions to make.
For example, for many graduates, the reasons for traveling after college are compelling, with the adventure and freedom providing respite from the last three years of college work. Yet for many young people, financial concerns have clouded their dreams of traveling the world.
We spoke to four recent grads about what the cost of living crisis means for their next steps.
Rachel Boani, 21 years old
Boani, who studied geology and physical geography at the University of Edinburgh, says the cost of living crisis was certainly a factor in his decision to take up a job after graduating rather than travel or to go on vacation.
She adds: “A huge concern was that [going on holiday] meant taking time off work, and I’m aware that I haven’t saved a huge amount of money at this point… I wish I had traveled during the summer but could save last year while paying rent and bills and food were impossible.
Over the past year, Boani has spent a greater proportion of his savings than in any other due to the current crisis.
The cost of graduation – gowns, tickets, etc. – varies across the UK. “Luckily my parents contributed to help with the cost of renting a gown for my graduation. Boani says, “A lot of people were annoyed with the cost of getting a degree and felt that universities didn’t offer any help with those costs.”
When she initially spoke to Guardian Money, she was waiting to find out if she had been accepted into a postgraduate program with the upReach organization to be a mentor for disadvantaged students across the UK. She later found out she had.
Boani returned home after university but is now trying to find affordable accommodation in Manchester.
Speaking before accepting upReach’s offer, she said: ‘College has given me the independence to move, and I feel like I’m stepping back on my way home… Looking to stay in Edinburgh, I realized I couldn’t afford the rent prices there – plus rising bills and council tax.
“I would love the opportunity to move to London to start a career, but I would have to live in my family home for at least a year, maybe two, to save enough to move there.”
Boani, who does not receive financial support from her family, has typically balanced two or three jobs over the summer to fund her college finances. “Even with my maintenance loan of over £7,000 [the maximum amount because of her parents’ lower income]it does not cover rent, food and bills,” she says.
Hannah Munden, 22
While graduation usually means a fresh start, Munden, who studied business management at the University of Sussex, has moved back to live in her parents’ home in Brighton.
She’s found a job in marketing management, although the hybrid job means she doesn’t need to be in the office very often.
“I don’t really want to live with my parents,” she says. “I enjoyed the freedom of college and I also want that independence when I move. But I also struggle with the difference between wanting this freedom, wanting to move and raising prices.
The rental market in London is competitive – it’s ‘over £800 for a good place’, she says, ‘plus the bills’.
Munden finds the rising costs of utilities particularly worrying: “I feel like this is more money than I will be able to spend as someone who just got their first full-time job and which finds its marks.”
Then there are the interest rates on the repayment of student loans.
“I know I’m only 22, but it worries me for future generations, and even for people like my children – if they want to go to university, even if there are alternatives, they will be able to do it with increasing costs?
Deyna Grimshaw, 21
Grimshaw, a final-year English literature student at the University of Birmingham, was also due to return home from college.
She says she doesn’t know what to do next, but is hesitant to take a master’s degree. “Full-time education is not something I want to continue,” she says, citing its cost and stress. “Right now, I’m applying for jobs in my hometown — any industry that interests me even a bit — to make sure I have something to do over the summer.”
Rental cost is at the forefront of Grimshaw’s mind. “I would definitely say the cost of living crisis has made me stay home longer,” she says. “Although I would love to move out and live with friends, I don’t know how I could justify paying £1,000 a month, especially since I’m unlikely to be in a very well-paid job.”
As UK grocery prices have soared, she says: “I found I was spending a lot more on food than I did a few months ago, even though I was buying the same or less.
“To be honest, I don’t think the college experience I’ve had is worth the debt I’ve racked up.”
She has racked up almost £30,000 in maintenance loan ‘debt’ which, coupled with course fees, means she owes around £60,000. She worries about whether the debt will be “paid” in terms of work.
Aravindh Suresh, 21 years old
After applying to numerous companies before landing a summer internship last year, Suresh, a final year economics student at the London School of Economics and Political Science, is embarking on a graduate job with an industry company. financial.
After graduating, Suresh plans to live in central London. “We had to consider the potential increase in costs when looking for new properties to rent,” he says. Suresh and his housemates were struggling to find anything for less than £900 per person per month.
“I’m lucky that my graduate work pays well,” says Suresh, who will work as an analyst. “So while the cost of living crisis is definitely reducing my disposable income after expenses, it’s unlikely I’ll be in a position where I’ll struggle to pay the bills each month.”
However, says Suresh rising interest rates on his student loans are a concern, and that this has prompted him to pay off his debt as quickly as possible. “This will likely mean postponing my ambitions to move up the housing ladder slightly, as I will only be looking to save for my housing deposit once I have paid off most of my student debt.”
Although Suresh is happy with his university experience, he says, “Several financial companies started offering internships where I could work and learn at the same time.
“If these opportunities had been so widely available when I applied to college, I could very well have chosen this option instead.
“I would be much less in debt and probably would have achieved the same career path that I am on now, but over a longer period of time.”
What are the experts saying?
Tom Allingham, managing editor of the Save the Student website, advises researching the best graduate bank accounts. A graduate account will extend your interest-free overdraft beyond your time as a student and give you a few more years to get out of debt without facing fees. “It’s best to switch while you’re still a student, as some accounts won’t allow you to switch if you’ve already graduated,” Allingham says.
“We also urge graduates not to panic about the size of their student loan debt.”
This is echoed by Ben Waltmann of the Institute for Fiscal Studies, who states that “recent changes to the student loan system [act] in the form of a tax hike. Under the current student loan system in England, remaining loan balances are written off 30 years after students first become eligible for repayment.
He says, “While the student loan balance doesn’t matter to most graduates under the current system, what really matters is how much graduates have to repay each year.
‘I feel like I’m stepping back’: New UK graduates hit by cost of living crisis | UK cost of living crisis
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