For the past ten years, NatWest’s Student Living Index has provided a critical lens into the financial realities faced by UK university students.
The latest edition of the index, released this month, paints somewhat of a sobering picture of intensifying economic challenges, with students grappling with soaring living costs, increasing dropout fears, and a growing threat of scams / fraud.
Drawing from responses by over 5,000 UK undergraduates and cumulative data from 37,000 students over the decade, this year’s report underscores the profound impact of inflation and the cost-of-living crisis on student life.
Since 2015, the financial landscape for students has shifted.
The average monthly rent has surged by 52% to £567, while grocery costs have climbed 43% to £146 per month.
These increases, coupled with a 38.4% rise in the cost of goods and services reported by the Bank of England, have forced students to make tough financial choices.
The 2025 Index highlights that 31% of students are skipping meals to save money, 27% are canceling subscriptions, and 25% are reducing heating usage to cut costs.
Social spending has also taken a hit, with half of students cutting back on nights out, 24% avoiding nightclubs, and 20% steering clear of pubs.
Despite these sacrifices, 40% regret spending on non-essentials like eating out, and 32% wish they hadn’t splurged on alcohol.
The financial stress / strain is taking a toll on students’ mental health and academic persistence.
A third (33%) of students have considered dropping out due to money worries, with 53% running out of funds before the term ends.
Alarmingly, 59% of students feel uncomfortable discussing their financial struggles, which exacerbates feelings of isolation.
While 31% report receiving some support from their universities, the lack of open dialogue about money remains a significant barrier to addressing these challenges.
To cope, students are increasingly turning to part-time work.
In 2025, 64% of students are employed part-time, up from 36% in 2020 and surpassing the 56% recorded in 2015.
However, even with additional income, social and living expenses continue to rise.
The cost of a typical night out has increased by 30% over the past five years, from £21.60 to £28.10, while eating out has risen by 15%, from £13.19 to £15.30.
Home entertainment has also become a larger part of student life, with students now spending an average of 64 hours per month on such activities, up from 38 hours in 2020.
The 2025 Index also reveals a worrying rise in fraud targeting students.
Over half (57%) of students have encountered scams, a 27% increase from the previous year.
Bank detail scams are the most prevalent, affecting 25% of students, followed by investment and tax rebate scams (13%).
Delivery scams, while less common at 10%, remain a concern.
The average financial loss from scams is £287.60, with 2% of victims losing between £2,000 and £2,999.
This underscores the urgent need for greater awareness and protection.
Despite these challenges, some UK cities offer relative affordability.
Lincoln, Bolton, and Cardiff rank as the most cost-effective places for students, with lower rents and living expenses.
Milton Keynes boasts the cheapest pint at £2.60, while Loughborough offers the most affordable night out at £23.90.
These findings provide a bit of hope for students seeking budget-friendly locations.
Paul Slinger, Head of Onboarding at NatWest, emphasized the importance of financial education and vigilance against scams.
“It’s really important for all students to understand what resources are available to them at their university and from their bank.”
NatWest’s report calls for increased support to help students manage their finances and navigate these pressures effectively, ensuring they can focus on their studies and make the most of their university experience.
As NatWest marks 10 years since the introduction of the Student Living Index, the data serves as a reminder of the evolving financial landscape for UK learners.
With rising costs and growing scam threats, universities, banks, and policymakers must work together to provide support systems, enabling students to do well financially and academically.