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Conversations about the cost of university often focus on tuition fees, which increased significantly in 2012/2013 and have risen incrementally since then. Yet, there are many additional expenses associated with university that can be equally as challenging to manage.
Read on to learn about the hidden costs of a university education and how you could help loved ones manage these expenses.
The average student spends £1,104 a month at university
Living costs have increased for most people in recent years, including students.
According to the National Student Money Survey 2024, the average student spent £1,104 a month at university – an increase of 2.4% on the previous year.
The largest expense was rent, with an average spend of £540 a month.
Other monthly costs included:
- £144 for groceries
- £76 for utility bills
- £65 for transport
- £51 for social activities
- £48 for takeaways and eating out
- £18 for course materials.
These expenses add up to a significant monthly spend. It is also important to note that depending on where students live and the lifestyle they are used to, their costs could be far greater.
As expected, the average monthly spend in London was the highest at £1,264 a month. Meanwhile, students in the south-west spent £1,189 a month and in the south-east monthly expenses averaged £1,187. [1]
If your child or grandchild is attending university, you must consider how they will pay their tuition fees, but also the best ways to manage their general living costs.
Read more: University 2025: Tuition fees and loans explained
The Student Loans Company offers means-tested maintenance loans to help students pay their living costs
Many students take out a maintenance loan alongside their tuition fee loan to cover their living costs while at university.
The amount they receive is typically dependent on the household income of the property in which they live while not at university.
The loan amount is reduced on a sliding scale if the household income exceeds £25,000.
As well as adjusting the loan based on household income, the Student Loans Company also offers different amounts depending on the student’s living situation while at university.
The following table shows the different amounts your child or grandchild could borrow in the 2025/26 tax year.
Source: Save the Student [2]
You may need to pay for some or all your child or grandchild’s university expenses
The figures from the National Student Money Report suggest a student in London may spend an average of £15,168 a year on their living costs.
In comparison, the maximum amount they could receive as a maintenance loan is £13,672. And, in reality, it is highly likely that your household income exceeds the £58,349 threshold, meaning they would only receive the minimum amount of £6,853 if they study in London and live away from home.
As such, even if your child or grandchild takes out a maintenance loan, it is highly unlikely to cover all their expenses. Unless they take on well-paid employment while studying, they will probably require financial support while at university.
You might also decide to pay all their living costs, so they do not have to take out a loan or work at all.
If you plan to support your child or grandchild during university, you could make regular monthly or weekly payments to help with their living costs. Alternatively, you might decide to pay a single lump sum each year.
Whichever option you choose, it is important to consider the different sources of wealth you could rely on, and how funding a loved one’s education will affect your wealth plan in the future.
We can discuss this with you and find the most suitable ways to support your family members with their education. Additionally, we can explain the potential tax implications of passing wealth down to your loved ones.
Teaching valuable financial skills to a child could help them manage their expenses more effectively
You may help your child or grandchild by providing funds to cover their living expenses. However, they might also benefit from important financial guidance.
University is likely the first time they have lived alone and managed their own wealth. As such, this is a useful opportunity to teach them about basic budgeting and saving.
With a clear budget in place, they may be able to manage their living expenses more effectively. Crucially, you instil positive financial behaviours in your child or grandchild from a young age, meaning they may be more likely to meet their financial goals in the future.
Get in touch
We can help you find suitable ways to support your loved ones with education costs.
Additionally, our investment management, consultancy, and wealth planning teams are here to answer any other queries.
Please email info@ipscap.com for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
[1] https://www.savethestudent.org/money/surveys/student-money-survey-2024-results.html
[2] https://www.savethestudent.org/student-finance/maintenance-loans.html#amount
