For many undergraduates, university will be the first time they have had to budget for living expenses, as well as “fun” money.
Understanding how student finance works and learning how to manage money can make student life less stressful and more enjoyable.
Here are eight tips for student finances.
Understand student loans
Most UK students will take out a tuition fee loan and a maintenance loan.
Tuition fee loans go directly to your university to cover course fees, while maintenance loans are paid directly to you for living expenses. Maintenance loans are means-tested and usually based on your parents’ earnings, plus any income from property, savings and investments. This means students from higher-income households typically receive lower loans.
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Both tuition and maintenance loans are repayable after graduation, based on your income. Interest rates vary depending on inflation and your earnings.
Laura Suter, director of personal finance at AJ Bell, says: “Students in England currently start to repay their loan when they earn over £25,000 a year, or £2,083 a month. Although this threshold is currently frozen until 2027, the government could choose to increase it from then on – which is when this year’s freshers will graduate from three-year courses. Repayments are taken at a rate of 9% of income above the threshold, regardless of how much you end up owing, which is why it’s often referred to as a graduate tax.”
Search for free cash
Don’t assume your student loan is your only source of funding. Many universities, colleges, professional bodies and charities offer scholarships, bursaries or hardship grants to help with tuition fees, living costs or specific expenses such as books and travel.
Some grants and bursaries are awarded on academic merit, others on household income, location, course choice or personal circumstances. It’s worth researching what’s available well before you start your course and applying early, as deadlines can be strict and funds limited.
Make the most of discounts
Student discounts can be one of the simplest ways to stretch your budget. Many retailers, travel companies and entertainment venues offer lower prices for students, usually ranging from 10% to 50% off.
Signing up to schemes such as TOTUM (NUS Extra), UNiDAYS or Student Beans gives you access to hundreds of deals online and in-store.
Beyond signing up, it pays to build using discounts into your routine. Always check if a store, restaurant or app has a student offer before you buy, and combine deals with cashback cards or loyalty points where possible to maximise savings.
Choose the right student bank account
Charlie Evans, money expert at Compare the Market, said: “If you’re a student, it’s worth exploring setting up a student bank account. These accounts are designed for those currently in higher education, and include benefits tailored to you – such as an interest-free overdraft. There are also lots of student discounts readily available, so it’s a good idea to make use of those.”
Royal Bank of Scotland/Natwest won the Best Student Current Account Provider at the Your Money Personal Finance Awards 2025. It is offering new student customers £85 in cash and a four-year Tastecard. Nationwide’s FlexStudent account is another option – it offers £100 cash and Just Eat vouchers.
Make sure you understand overdraft limits and charges, and don’t rely on the overdraft as a long-term solution.
Use credit wisely
Some student bank accounts may offer a credit card option. Make sure you understand how credit cards work, including repayment terms and potential intertest charges, before taking one out.
Jacqui Hamilton, student expert at Experian, says: “If you do decide to get a credit card, where possible aim to pay off the full balance each month to avoid interest and keep borrowing manageable. It’s also worth bearing in mind that credit cards can also offer protection under Section 75 of the Consumer Credit Act.”
Students should be cautious about using buy now, pay later (BNPL) services, which allow you to delay payment for online or in-store purchases. While these schemes can seem like an easy way to spread the cost of clothes, gadgets or nights out, they are still a form of credit. Missing repayments can lead to fees, damage your credit score and make future borrowing more expensive.
Get a part-time job
A part-time job can ease the pressure on your budget, but balancing working and studying can be tricky. Many students work a few hours each week during term time, and more hours in university holidays, to help cover the costs of student life.
Even if your total earnings from a part-time job are below the £12,570 tax-free allowance, you may still see tax deducted from your pay because the PAYE system assumes the pay you receive is a regular wage. If you overpay tax, you can usually reclaim it from HMRC via the government website.
Learn to manage your money
Budgeting is crucial. Track your income and outgoings, and make a weekly or termly budget.
Suter said: “Work out what your crucial expenses are, including things like rent, study materials, utilities and food that you can’t go without. There are loads of different apps and resources online, so you don’t have to build your own spreadsheet from scratch unless you really want to.”
Try to save
University is a great time to get in the savings habit. Stashing away even a small amount each week or month will add up over time.
Charter Savings Bank was voted the Best Cash ISA Provider in the Your Money Personal Finance Awards 2025, while Revolut was named the Best Everyday Savings Account Provider.
