Money worries for parents of students heading to university

New research shows over two-thirds (71%) of parents of undergraduate students have concerns about providing financially for their son or daughter while they are at university.

Moreover, a third (33%) of all parents are very or extremely concerned according to the research published today by the Consumer Financial Education Body (CFEB).

With the Bank of Mum and Dad under pressure, it is more important than ever that new students are equipped to manage their own money at university. However, the CFEB research reveals that new students starting university this term are unaware of some very important money facts, and may end up paying a heavy price. For example:

a third (33%) of students are unaware that doorstep lenders are usually more expensive than most other lenders (the average APR on a doorstep loan is 359%);
 
over a third (35%) of students did not know that their car insurance must be in their own name and address, not their parent's (it is illegal for parents to ‘front' policies).
 
CFEB, an independent organisation set-up by the Financial Services Authority which helps people understand financial matters and manage their finances better, is today launching a campaign to get new students off to a flying start. The campaign, at: moneymadeclear.org.uk/flyingstart, is designed to help parents equip their son or daughter to cope with money matters at university and help new students keep track of their money.

Tony Hobman, Chief Executive of the Consumer Financial Education Body said: "Living away from home for the first time and managing on a budget can be challenging for students and their parents too. But parents have a really important role to play in helping their son or daughter make the transition to financial independence - talking about money and encouraging them to keep track of their spending is a great starting point. Our Flying Start campaign provides useful tips and tools to help parents with these conversations, and nudge new students towards healthy financial habits."

Flying Start provides free, impartial advice and information to help new students get to grips with managing their money away from home, such as: how to budget, how to plan for the unexpected, how to shop-around, and how to spot hidden costs. It offers a range of online tools including a ‘Money Stretcher' and ‘Cut-back Calculator' to help them make their money go further, and a comparison table - ‘Student Borrowing Compared' - which illustrates nine different types of borrowing options, what they might cost, how long to repay, to help students work out which one is right for them. CFEB already works with universities across the UK to help students understand their finances and manage their money better. Delivered through Student Money Advisers at over 80 universities, the ‘Money Doctors' scheme aims to equip Student Money Advisers with the skills and tools to proactively educate students about money management; and encourage them to take responsibility for their finances with confidence.

Lynne Condell, Chair of the National Association of Student Money Advisers said: "It is vital for parents to equip young adults with the skills to take control of their money. This campaign provides an opportunity for the subject to be broached, and students to be signposted towards resources they can look at and discuss with their parents. Student Money Advisers see the consequences of poor financial capability every day, for example: many students end up working too many hours to get out of the situation and then get behind with course work - and so the spiral continues. Student Loans aside many students spend years paying off credit cards and store cards that they could easily have done without but made some poor decisions due to being ill-equipped when they started university."