By Daniel Hunter

Ahead of new university tuition fees coming into effect from September, and following this year's A-level results, Lloyds TSB’s second annual Student Finance Report reveals that a significant number of students are continuing to struggle to make ends meet on a monthly basis.

With an average annual income of approximately £7,000 , around one in six (16%) students surveyed say they do not have enough money to meet monthly outgoings, while two in five (40%) admit they are only just managing their finances but money is tight. This compares to 17% and 40% respectively in 2011.

Lloyds TSB datai shows that nearly half (46%) of students’ annual income is derived from student loans. Therefore, it is little surprise that over three quarters (77%) believe they will leave university with some debt, while three in five (60%) expect that debt to be in excess of £10,000. 16% believe they will leave with no debt at all.

Students in Scotland survive with the lowest levels of incomesi — 10% lower than the UK average income per student — however, this is offset by lower levels of debt with just 39% of those surveyed expecting to owe more than £10,000 on completion of their course. By contrast, annual income for students studying in London is 11% higher than the national average, and for those studying in Wales it is 1%, but 54% and 63% respectively expects their debt to exceed £10,000.

For many, the thought of leaving university owing a large amount of money is a worry and nearly half (47%) of the students surveyed admitted that they are concerned about the level of debt they are taking on. To combat this, 5% of students who worked during term time last academic year did so to try and avoid taking on unnecessary debt. More than a quarter (29%) of students said that they put any money leftover at the end of the month into a savings account, however 24% admitted to spending any spare money on treating themselves.

With money tight, nearly half of all students have turned to paid work to supplement their income. 49% of students surveyed have had a full or part time job within the last academic year, compared to 51% the previous year. Of these, nearly half (43%) said they found employment to support themselves through university and help make ends meet. A much smaller 14% cited experience in the job market and CV building as their primary motivation, and 17% confirmed they have not been able to find work at all.

Three quarters of students (75%) who worked during term time did so for less than 15 hours per week earning just over £8 an hour on average. And the need to seek employment to supplement their income is having an adverse affect for many students with 25% of those who worked during term time admitting that it has affected their studies in a negative way. A further 32% said that it had a negative affect on their social life but were able to find the right balance between work and studies.

With many students finding it difficult to strike a balance between their studies, social life and employment, approximately four in five (81%) of those surveyed said they now choose to bank using internet, telephone and mobile banking as a way to keep track of their money. This compares to two in five (41%) who check their account balance at an ATM, and 39% who use monthly bank statements.

“For many, going to university is one of the biggest financial commitments they will have to face in their lifetime, and with the introduction of higher tuition fees from next month it is perhaps more important than ever for students to stay in control of their finances," Jatin Patel, director of current accounts at Lloyds TSB, said.

"Our research shows that the majority of students already expect to leave university with some sort of debt, and most expect to see the amount they will owe extend into five figures.

“With finances tight, many students turn to paid work to help cover their monthly outgoings. However, it is clear that even with extra income from employment, a lot of students are still struggling to make ends meet. And some are even finding that the added commitment of combining university with a full or part time job is having a negative impact on their studies and social life.

“Our research reveals that students today regularly choose internet, telephone and mobile banking as preferred ways to keep track of their money. With such busy schedules, an account which allows students to bank whilst on the go will likely be high on their list of priorities heading into the new academic year. As will an account which can help ease the financial burden of university."

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