The UK’s cost of living crisis – how will it affect international students?
“International students travel more than the average student, so they are likely to feel the weight of living costs more”
While the coronavirus pandemic rocked the international study industry, another threat has surfaced which will transform the way international students live, spend, and save: the cost of living crisis, writes Jon Munnery at UK Liquidators. On the day the Chancellor of the Exchequer put out the Spring Statement, inflation hit the highest level in 30 years. When inflation increases, the cost of living increases in tandem, which means it’s prime time to review your spending plans for 2022.
What kicked off the UK cost of living crisis?
War on Ukraine – Although the UK doesn’t highly depend on Ukraine and Russia for imports, Russia is a key importer of fertiliser and animal feed, while Ukraine and Russia combined export a quarter of the world’s wheat. Disruption to the supply chain is increasing production costs and therefore the price of the end-product in supermarkets. As the UK takes a stand against Russia by weaning off Russian resources, this is likely to affect the variety of stock available in the supermarket and the price of goods.
Market price of energy – According to Ofgem, the UK’s energy regulator, a record increase in global gas prices means that the energy price cap has increased by 54%. As wholesale prices quadrupled in the last year, energy suppliers can’t absorb the entire cost and have no choice but to feed it through to customers.
Economic recovery – During the coronavirus pandemic, a total of £80 billion worth of government support was offered as a lifeline to individuals and businesses alike. The government accounted for the shortfall of cash by increasing borrowing to £323 billion in 2020/21.
Now that the time for economic recovery has arrived, the UK government hopes to claw back money handed out during the pandemic by raising taxes.
How can international students kerb the cost of living crisis?
Now that inflation is at a record high, students are likely to feel their pockets tighten and budgets squeeze as it costs more to buy everyday essentials, heat up homes and top up on car fuel. Students that pay their energy bills separate from their rent will see their bills increase.
The National Student Accommodation Survey 2022 surveyed students about affordability and energy bills.
- Four in five students who have energy bills are worried about the rising costs, while three in five have already noticed their bills increase due to the energy crisis
- Due to the rising cost of energy, students in the survey who don’t have bills included in rent anticipate cutting back on socialising (54%), groceries (43%), travel (42%) and more
International students travel more than the average student, so they are likely to feel the weight of living costs more, although they can drive down the costs by spending strategically.
UK students can benefit from student discounts through the National Union of Students (NUS)/ International Student Identity Card (ISIC) Association. They can opt for accommodation with combined rent and energy bills if this is lower and change energy usage habits to cut down on unnecessary costs.
The UK cost of living crisis is having a far-reaching effect on families and students in the UK, although the UK remains an attractive destination of study due to vast employment opportunities and a lower cost of living than neighbouring countries, including the US.
After over two years of travel disruption and border closures, international students are ready to return to the UK to continue or start their education under a different economic mood as it transitions out of the Covid-19 pandemic and tackles the new cost of living.
About the Author: Jon Munnery is a partner at UK Liquidators, a company liquidation specialist supporting limited companies in financial distress. Jon is an expert in helping businesses and individuals cope with the cost of living, increasing energy prices and company debts. Jon is a member of the Insolvency Practitioners Association MIPA and The Association of Business Recovery Professionals MABRP.