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Students to ‘pay back’ £60m in energy rebates they won’t receive

Emma Lunn
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Emma Lunn

University students are reducing their spend on socialising, groceries, eating out and travel as they struggle with rising energy costs.

Save the Student’s National Student Accommodation Survey 2022 has looked at the true impact of the energy crisis on those at university. It found that students could be an estimated £100m worse off compared to those eligible for the government’s full support package.

The study found that with 53% of students already struggling with the cost of rent, the rising price of energy is adding to an already challenging situation for many.

According to Save the Student, about 40% of students pay energy bills on top of their rent rather than having it included in their rent. These students are paying an average of £62 each per month on energy.

From this, Save the Student calculated that the average cost of energy bills per student household is £220 per month.

Four in five students in the survey who have energy bills are worried about the rising costs. On top of this, about three in five have seen their energy bills increase due to the rising prices.

According to Save the Student, three-quarters of students who don’t have energy bills included in rent said they’ve had to cut back on heating due to how much the bills cost.

As well as this, many students anticipate needing to spend less on groceries, socialising, travel and more due to rising bills.

But despite students’ struggles, many are left out of the government’s support package. The £150 council tax rebate to households in England in council tax bands A to D excludes full-time students, as they’re exempt from paying council tax.

In addition, the £200 energy ‘rebate’ due in October could cost many students more money than it saves them.

For students who have bills included in rent, the bill credit won’t benefit them, but many will still need to pay it back when they move into the private rented sector on graduation.

Save the Student says this will particularly affect the 92% of students in university halls that have bills included, as well as the 86% in private halls that do. Even those who don’t have bills included in rent might live with fewer housemates after graduating, and could therefore repay more than they save.

Researchers calculated that, overall, current undergraduates will end up paying around £60m more than they’ll save through the £200 credit.

Jake Butler, Save the Student’s money expert, said: “The cost of accommodation is already a huge drain on students’ finances and as we can see from our latest insights, the situation is unfortunately set to get a lot worse.

“The government has offered help but the vast majority of students won’t be able to access it. In the case of the £200 rebate, it’s actually likely many will end up paying it back over the next five years despite never having the advantage of the saving in the first place. How can that be fair?

“This is all on top of the ongoing issue that the maintenance loan, which is intended to help students cover living costs like this, was not enough, even before the spiralling increases in the cost of living.”