Every yr, the Scholar Banking Survey unearths how scholars actually really feel about their banks, BNPL products and services, money bills and a lot more. Learn on for the overall result of this yr’s survey.
Now in its 8th yr, the Scholar Banking Survey unearths all about how scholars arrange their cash.
We requested over 1,200 UK scholars about banking, borrowing, money, Lifetime ISAs (LISAs) and purchase now, pay later (BNPL) fee products and services. From their responses, we are ready to offer an excessively fascinating perception into how UK scholars in point of fact really feel about financial institution accounts and fiscal merchandise.
Key findings from the Scholar Banking Survey 2022
Here is an summary of the important thing findings from this yr’s Scholar Banking Survey:
- Santander is probably the most standard financial institution amongst scholars.
- Best 12% of scholars want to transfer financial institution accounts.
- 10% of scholars by no means use money.
- Amongst scholars that experience overdrafts, over 1 / 4 have hit their prohibit one day, and just about part are undecided after they wish to pay it again.
- One in 5 scholars have a LISA.
- 5% of scholars use BNPL websites incessantly, and an extra 17% use them occasionally – on the other hand, many specific sturdy considerations about them.
How do scholars make a choice a financial institution?
When opting for a financial institution for college, two in 5 scholars within the survey selected to stick with the only they have been already with, whilst just below a 3rd were given suggestions from their family and friends.
Over the previous couple of years, now we have observed a gradual decline within the proportions of scholars who’re influenced via freebies and reductions when opting for a scholar checking account.
Along this, there is been a noticeable build up within the proportions of scholars who prioritise on-line or app get right of entry to when opting for a financial institution. In 2020, 20% of scholars surveyed mentioned they selected a financial institution according to this, which went as much as 21% in 2021, and has jumped up additional to twenty-five% this yr.
As we duvet in additional element underneath, over the previous couple of years, now we have observed a gentle build up within the proportions of scholars the use of app-based financial institution accounts like Monzo.
For standard banks to take care of their reputation amongst scholars, our findings recommend there is a rising want for them to offer complex app-based banking options that compete with the main branchless banks.
Freebies are nonetheless vital to 27% of scholars within the survey. Alternatively, with out well-optimised and available banking apps, our surveys point out that conventional banks may to find it more and more tricky to attraction to new scholars within the coming years.
The place do scholars do checking account analysis?
|Form of analysis||What number of used this technique|
|College or SU||7%|
As now we have observed in earlier banking surveys, nearly all of scholars glance on-line to analyze financial institution accounts.
Best 4% of scholars within the survey were given recommendation from their college. However, some felt as regardless that younger other people must get extra data about scholar banking sooner than beginning uni:
- [We] may do with 6th paperwork instructing scholars sooner than the top of faculty lifestyles.
- Scholars must learn extra at school about scholar financial institution accounts together with what [overdrafts] and rates of interest imply.
- Banks must do outreach paintings in faculties and 6th paperwork to lend a hand train scholars learn how to learn statements and learn how to forestall status orders, and so forth.
- Extra must be informed about it sooner than going off to uni.
Do scholars imagine switching banks?
In terms of financial institution accounts, loyalty does not generally tend to repay – it is in most cases new consumers who obtain the most productive offers. As a result of this, it is a good suggestion to control what freebies different banks are providing to those that transfer over to them.
Switching banks is an effective way to get unfastened cash, as banks incessantly be offering round £100 as a sign-up be offering to new consumers.
Alternatively, in spite of this, simply 12% of scholars within the survey mentioned they are taking a look to transfer financial institution accounts.
Retaining in thoughts that the commonest explanation why scholars selected their account was once to stick with their present financial institution, loyalty and/or comfort appear to be large components of their banking alternatives.
What’s the preferred financial institution amongst scholars?
Since we started operating our Scholar Banking Survey in 2015, Santander has persistently been probably the most frequently used scholar checking account. That is most likely because of their aggressive overdrafts and beneficiant sign-up incentives (they recently be offering a 16–25 Railcard that lasts for 4 years).
Alternatively, now we have spotted a slight shift in scholars’ banking alternatives during the last few years. As we touched on previous, app-based banks are turning into more and more standard.
55% of other people within the survey mentioned they have got a student-specific checking account, which is down from 59% who’d mentioned the similar closing yr.
The 2021 banking survey was once the primary time we might observed an app-based financial institution be utilized by a better percentage of scholars than a conventional financial institution. Monzo was once being utilized by 2% of scholars in that survey, overtaking the 1% that used TSB on the time.
This yr, there is been an extra build up, with 3% of surveyed scholars now pronouncing they use Monzo as their major checking account.
It is value noting that there have additionally been slight will increase within the proportions of scholars the use of Revolut and Starling.
In 2021, 1% mentioned they used Revolut, and any other 1% used Starling. On this yr’s survey, either one of those figures have larger to two%.
Scholar pride rankings
At the complete, scholars are lovely glad with their banks, giving their accounts a mean rating of four.26 out of five.
Alternatively, that is down fairly, as the typical rating in each 2020 and 2021 have been 4.31.
Right here, now we have centered at the rankings of banks that provide student-specific accounts.
Alternatively, Monzo won an excellent moderate rating of four.41 out of five from its customers, in spite of now not providing a scholar checking account. This once more highlights how vital app banking options will also be for college kids.
How incessantly do scholars use money?
As many as one in 10 scholars within the survey by no means use money. On best of this, 38% use money as soon as a month or much less. Which means just about part are hardly the use of money, if in any respect.
Having mentioned that, some scholars do use money incessantly. 4% mentioned they use money as soon as an afternoon, and an extra 4% mentioned they use it greater than as soon as an afternoon.
However, because the contactless fee prohibit is now £100, maximum purchases will also be made with only a faucet of a card.
On best of this, the rising acclaim for banking apps may additionally do away with some scholars’ want for money. Cellular bills are extraordinarily handy.
Over the approaching years, it is going to be very fascinating to look how scholars’ use of money adjustments.
Scholar borrowing conduct
When taking a look into scholars’ borrowing conduct, now we have most commonly excited by two major spaces: overdrafts and purchase now, pay later (BNPL) fee products and services.
How overdrawn are scholars?
|Dimension of overdraft||Scholars overdrawn via this quantity|
|No longer overdrawn||74%|
|£99 or much less||7%|
|£100 – £499||6%|
|£500 – £999||5%|
|£1,000 – £1,999||5%|
|£2,000 and over||1%|
|Reasonably now not say||2%|
Round 3 quarters of scholars within the survey informed us they were not overdrawn in any respect, and 13% have been overdrawn via lower than £500.
You need to recognise that overdrafts will also be really helpful to scholars if used moderately.
Scholar financial institution accounts be offering fee- and interest-free overdrafts. So, if scholars use their overdraft as a buffer that is helping them get via till their subsequent mortgage instalment, it may be helpful.
Alternatively, for overdrafts for use safely, you’ll want to that scholars are totally conscious about the borrowing phrases and that they keep conveniently throughout the prohibit.
Sadly, our survey discovered that is too incessantly now not the case.
Amongst scholars who’ve overdrafts, 27% have hit their prohibit one day and 46% do not know after they wish to pay off their overdraft.
Either one of those figures are up fairly from closing yr, when 24% of scholars with overdrafts had mentioned they would hit their prohibit, and 45% did not know when to pay off it.
What number of scholars use purchase now, pay later products and services?
Lately, now we have spotted a rising percentage of scholars the use of purchase now, pay later (BNPL) websites like Klarna, Clearpay and PayPal Credit score.
Whilst 5% of scholars within the survey mentioned they use BNPL incessantly, an extra 17% mentioned they use it occasionally.
Apparently, the similar percentage of scholars in closing yr’s banking survey mentioned they used it incessantly, however best 14% had mentioned they used it occasionally. So, even supposing it is a small trade, there was a slight build up this yr.
However, in spite of this, scholars have very blended perspectives about purchase now, pay later fee products and services. Listed below are one of the crucial feedback we won about BNPL within the survey:
- Simple solution to pay for issues whilst I look ahead to Scholar Loans to return in.
- A slippery slope.
- A good suggestion for individuals who do not get some huge cash immediately, however may result in monetary problems [if] sudden cash issues arise.
- Bad, fuelling intake and dwelling on credit score.
- I feel they may be able to be extraordinarily attractive for college kids however necessarily it is a mortgage which it’s important to repay.
- I really like them.
- Dangerous lure for debt.
- They’re a good suggestion particularly with garments that you’ve got to take a look at on and come to a decision in the event that they have compatibility/glance excellent, it makes them more uncomplicated to go back.
- They’re handy if you’ll be able to pay the cash again with out factor, on the other hand it may possibly get addicting and if any individual has unhealthy cash control it may be a difficult venture to get out of.
What number of scholars have Lifetime ISAs (LISAs)?
You’ll be able to save as much as £4,000 a yr with a LISA. Each monetary yr (April–April), the federal government can pay a 25% bonus at the quantity stored, which means it’s essential obtain as much as £1,000 totally free each and every yr.
LISAs are beneficiant saving schemes, however strangely, 32% of scholars within the survey did not know what they have been. 18% had one, and the rest 50% have been conscious about them however had now not but opened an account.
To determine extra and notice our record of the highest suppliers, check out our complete information on how LISAs paintings.