Number of students juggling study and work hits record high

The number of students in part-time employment during the academic terms has risen sharply following the past two years of falling numbers of student workers, according to the NatWest Student Living Index.

Nearly half (42%) of undergraduates are in part-time term employment and earn a combined total of more than 2 billion, while their cost of living has risen to £10.8 billion, an increase of £500 million since 2007.

The cost of living and current economic climate is a key factor cited by over 5% in determining their choice of university, a figure that rises to 10% for students in London. The fifth annual NatWest Student Living Index league table reveals that Plymouth is the most cost-effective place in the UK for undergraduates to study. Plymouth offers a winning combination of relatively cost-effective living costs with the second highest weekly earnings from part-time work.

Mark Worthington, Head of Student Banking at NatWest comments: ‘Students are increasingly aware of the wider economic climate and this is filtering down into their decisions when they are choosing their university and also when deciding whether to take a part-time job during term-time. Our research shows that many Plymouth students are taking a positive, proactive approach to managing finances by taking on part-time work. At NatWest, we believe in equipping students with the money management skills they need before they even get to university. Drawing up a budget can take ten minutes but will help you make the most of your money for the whole academic year. Getting to grips with all the costs of being financially independent is key to making the most of your money.'

The NatWest Student Living Index, first published in 2004, ranks Britain's major university towns by plotting average student expenditure on living and housing costs against income from term-time employment. The research, conducted in 26 UK university towns this year, shows that the average Plymouth student spends £217 per week on living and housing costs, but manages to offset these costs in part, with impressive weekly earnings of £115 from part-time work. At the other end of the scale, the average student in Exeter spends £294 per week, but makes just £67 from term-time employment, one of the lowest amounts of all the university towns and cities surveyed.

This means that for the average undergraduate undertaking part-time work, choosing Plymouth over Exeter could theoretically leave them £3,510 better off over one academic year, enough to cover the maximum top up fees introduced in 2006/7.

British students set to spend a record £10.8 billion on living costs and accommodation

The NatWest research suggests that, in total, British students will spend over £10.8 billion4 in housing and living costs over the coming academic year. Of this: approximately £3.9 billion is spent on rent; £1.2 billion on supermarket food shopping; £864 million on going out; £489 million on books and course materials; and £773 million on cigarettes (a significant drop from 2007 when the smoking ban came in and students spent £806 million on cigarettes)

The NatWest Student Living Index research reveals that the city offering lowest weekly living costs (excluding rent) is York (£146), for the second year running and Plymouth (£148), whilst London (£221) and Leicester (£220) have the highest. In terms of weekly housing costs, Oxford (£92) and London (£91) are the most expensive towns in the UK compared with just £58 the average rent in both Lancaster and Belfast.

Since the very first NatWest Student Living Index, back in 2004, Leeds has only once been out of the top ten. The city debuted in sixth place in 2004 and reached its best position - the top spot - last year. Although Leeds has tumbled to ninth in this year's league table, perhaps due to the continued introduction of increasingly fashionable (and expensive) bars and shops, its past performances suggest it is a good bet for financially-savvy students.

According to the study, the hardest-working students are in Belfast and Dundee, where 64 per cent and 61% are undertaking term-time employment. On average, those with a part-time job work 14 hours per week although a quarter of students work more than 20 hours each week. Students in Plymouth work the longest hours (18 hours), whereas Birmingham students work the shortest (10 hours).

In total, British students taking term-time jobs expect to earn £2 billion4 over the coming academic year. The highest average weekly income from term-time jobs is to be found in Brighton (£120). This contrasts with just £63 per week in Swansea.

Mark Worthington, Head of Student Banking at NatWest, adds: "We hope that the NatWest Student Living Index is a useful tool for students and their parents to give a realistic idea of what costs are involved and how they can potentially be offset by a part time job. There are many things that students can do to combat higher costs of living, such as using MoneySense's online budget calculator. We have outlined five basic steps to help students manage their money:

1. Budgeting: This is the key step to working out what outgoings and incomings are each month. Drawing up a budget will also help highlight some hidden costs like laundry or library charges as well as the rent, food and books. Being aware of how you spend your money can also show you where you could be saving, such as cutting down on expensive coffees or making your own sandwiches.

2. Sources of Income: Working out what you may need to borrow, whether from a student loan or from other sources is one of the most important decisions to make before university starts. It is worth thinking about how this breaks down week by week, particularly as student loans tend to be paid on a term by term basis.

3. Balance the books: Have a think about what other sources of income you may have: a savings account, a generous offer by a parent or guardian to contribute towards accommodation or food? If after this, your outgoings are still exceeding what is coming in, it is probably worth thinking about getting a sensible level of part time work to help bridge the gap. Vacation work is also a good option as you can supplement your term time expenses.

4. Offset your costs. According to the RBS/NatWest 2008 Student Living Index, three quarters of a million undergraduates take up part time work (42%) to offset their living costs. Part time work can also be a really useful CV builder, especially if you look out for opportunities in your field of study.

5. Guidance from an expert: NatWest branches in main city centres and university campuses have a dedicated student adviser on hand with tips on how to better manage your money. NatWest MoneySense offers free, impartial money guidance online and in branches.

For more information, visit natwest.com/moneysense