New students can expect university to cost £20,000 per year

By Helen Gradwell

Research by Family Investments has found that the cost of living for students has risen 7% in the last year - which means that the annual living cost for a student will rise to almost £11,000. When the £9,000 annual tuition fees are added to this, the total annual cost of university reaches £20,000.

In 2011 the monthly living cost for a student was £848, whereas it is now £910 - not including tuition fees. Apart from the tuition fees, rent is the biggest living expense. The average student spends around £165 per month on their accommodation. Transport costs have risen from £71 a year ago to £78 per month today - and they could rise even further.

Back in 2004 the monthly cost of living for students was £561. Since then, students have seen living costs rise by almost 9% a year on average. Food costs have risen 77% during this time - now standing at £78 per month.

If this pattern continues, students starting university this year might see their living costs hit £13,159 per year by the time they graduate in 2015.

The head of savings and investments at Family Investments, Kate Moore, said: "For many parents, the big question is how to finance such a cost at a time when they need to take into account not just tuition fees but very significant living costs too."

She added: "The huge increase in tuition fees will have taken many by surprise and left little time to save towards the cost. Taking a long-term view, however, it would seem that these fees are here to stay, so a shift in the savings culture in the UK would help parents prepare for the future, similar to the college fund savings culture of the US. Spreading this saving over an eighteen year period can significantly reduce the financial burden."

As for how much parents should be saving for their child's university education, she suggested: "Parents need to be saving around the equivalent of their child benefit each month in order to cover student living costs through university. Smaller contributions will however go a long way, particularly if parents start at an early stage and allow for the potential impacts of compound interest or stock market growth."

Tags: university, living costs, tuition fees, Family Investments, education

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