The best student accounts for September starters

The height of summer means only one thing. It’s time to get on top of your fresher finances

Students arriving for Manchester University's freshers week queue up at a cash machine (Getty)

Hitting the hallowed halls up and down the country will be especially challenging next month as first time and returning students navigate university life in a Covid shadow.

But plenty of things won’t change, including the need to pay their way, juggle limited budgets and make the most of every freebie going.

Now is the perfect time to get to grips with the deals on offer from the nation’s biggest financial names as they jostle to secure your custom – not just for the next three years but, they hope, for the rest of your adult life.

Pick your priorities

“Students searching for a bank account would be wise to weigh up any perks that may be on offer with the interest-free overdraft that the account carries,” says Rachel Springall, financial specialist at price comparison site Moneyfacts.

“During the years of study, a generous interest-free limit would provide students with a financial safety net and Halifax and Santander offer up to £1,500 from the outset of year one, which is generous. It is worth noting that overdrafts are not guaranteed, and they will need to be paid back once a consumer ends their studies.

If travel, Covid permitting, is high on your priority list then Santander is offering a free Railcard and those who pick NatWest can opt for a Coachcard, though you could instead opt for a tastecard or £10 Amazon gift card and one year of Amazon Prime Student instead.

Those looking to save on everyday spending can find cashback offers of up to 15 per cent on some accounts, but it does depend on where they spend.”

Managing money

“It may be tempting to dip into a generous interest-free overdraft, but students would be wise to consider taking on a part-time job and perhaps thinking of ways to save some cash if they can,” Springall adds.

“Using a mobile budgeting app like MoneyDashboard to keep a close eye on outgoings and mobile apps like Chip to automatically save spare funds, could educate students who may be living away from home for the first time and want to budget or save.

“Taking out insurance for gadgets is also worth considering, as students may not be able to buy those outright should they break, or worse are stolen,” she says.

The UK’s youngest adults have a poor reputation when it comes to money but it probably isn’t a fair one, as Generation Z absorbs the messages around house prices, debt and now Covid-19.

If teenagers received a £5,000 windfall for example, almost 80 per cent would now choose to save the money, according to a survey by financial provider OneFamily.

The cost of learning

But even with a savvy attitude to spending, campaign group Save the Student calculates university goers will typically part with more than £800 a month in living costs, before factoring in the £9,250 annual tuition fees that fuel the huge debts faced by new graduates.

Those planning to go to university this year expect to finish their course with average debts of £38,238, according to the Association of Investment Companies.

The government-funded Student Finance package offers a loan to cover course fees plus the possibility of a means-tested maintenance loan for living costs worth a maximum of £9,203 a year, or a grant in certain circumstances. There is also extra financial support available for students with disabilities.

Repayments at a fixed annual rate of 9 per cent of your income kick in once you graduate and earn more than £26,575 a year.

More than 90 per cent of graduates took out a loan to finance their time at university. Just a third expect to be able to repay it in full, and few know how much they pay in interest on the borrowing.

New challenges

There’s no getting away from the fact that this year’s freshers, returners and new graduates are dealing with the most uncertain of economic times though.

As Covid continues to roll around and Brexit looms, students can be as careful with their money as possible and still get sideswiped by circumstances that are out of their control and leave them out of pocket.

This year more than ever, banks, student groups and universities are urging anyone in financial hardship, or concerned that they might be in the near future to approach them for support immediately – regardless of where they are in their university career.