The kids are not alright: Final year students and rising living costs

Final year students will finish university and graduate soon, prompting many questions regarding their next year’s living situations. Where many students will be going abroad to work, study, or take a gap year, most final year students will stay in the UK, entering work life, and having their own place, mostly in big cities such as Manchester, Birmingham, and London.

However, the UK is currently facing a strong and sustained rise in the costs of living, making it difficult for recent graduates to picture what their early working life will look like. According to the Bank of England, inflation is likely to peak at 10% this year, showing a substantial increase in consumer goods and energy prices in the UK. This rise, which follows the Russian invasion of Ukraine, is the highest 12-month inflation rate seen in the National Statistic Series, which began in January 1971. Numerous final years declared being concerned with the beginning of their working life, as prices keep on increasing.

Every sector of the economy will be hit, and essential goods prices are all escalating. According to Statista, a worldwide statistics company, since March 2021, “food prices in the United Kingdom [have] increased by 5.9 percent”. The Office for National Statistics has indeed published a report detailing that food prices in the UK had risen by 4.32% since January 2021, with oils and fats seeing the most important rise of 15.9%. Food, being an essential, could take a large part of young workers’ salary away.

Graduates, even when planning on living in big cities, are sometimes still looking at buying a car to commute to work. However, given the current inflation in prices on the used car market, many could have to re-allocate a part of their budget to living closer to work, or to city centres, and to using public transports instead of a car. The second-hand car market is also being hit by inflation and prices on the used car market have been growing continuously. According to the Guardian, in February 2022, “One in five secondhand cars in UK cost more than new models”. Emily, a third year Biology student who is planning on moving to London next year, said that she “thought about buying a car, before [she] saw the prices”. She explained that, in order to gain independence, she was thinking of buying a car after a few months of work. She is now “100 percent sure that [she] will use the Tube”.

The housing market is also difficult, especially in big cities. All over the UK, house prices have been increasing, both in the buying and renting markets. According to the Government’s data, in February 2022, the average house price in the UK was £276,755, showing an increase of 10.9% compared to February 2021. Rising housing costs were already preventing many young workers from being able to buy their first house rapidly after graduating, however, as explained by the BBC, “they are [now] being priced out of the rental market too”. Concerning rents indeed, “London’s average monthly rent is now £2,142” per month.

Emily explained that she recently got accepted into a graduate scheme and is therefore ready “to start living the London life”. Yet, she said that it is only possible because she will earn a “sufficient wage to afford living in the capital-city”, and because she “started saving money last year”. Aware of high living costs, especially in London, she has been saving part of her previous pay in order not “to be broke within the first month of being there”.

Yet, for some final years, the rise in housing costs is simply unaffordable, which forces some of them to go back home and live with their parents next year, even when it was not their initial plan.

Sarah, a third year Law student, said that, even though she is planning on finding a job soon, “it will have to be in Essex because my mom lives there”. She is planning on going back home and live with her mother, as a job “probably won’t be enough to afford food, gas, and housing expenses”. She also explained not wanting “to start [her] adult life being stressed about money and feeling guilty every time [she] spends”.

Given that graduates earn on average £30,000 per year, it makes it difficult for them to face the rise in costs of living. Many final year students explained being scared by the inflation, and declared not knowing “what’s going to happen next year”.

Nonetheless, one thing final year students can be reassured with is that there remains a high percentage of employment for graduates, and mostly in skilled jobs. According to the Government’s 2020 Report on Graduate labour market, the graduate employment rate reaches 86.4%, with 66% of graduates employed in high skilled jobs, compared to 24.5% for non-graduates. The employment rate of young graduates, since 2007, has been pretty stable, and has always exceeded the one of non-graduates.