Annually, the Scholar Banking Survey reveals how college students actually really feel about their banks, BNPL companies, money funds and way more. Learn on for the total outcomes of this 12 months’s survey.
Now in its eighth 12 months, the Scholar Banking Survey reveals all about how college students handle their cash.
We requested over 1,200 UK college students about banking, borrowing, money, Lifetime ISAs (LISAs) and purchase now, pay later (BNPL) fee companies. From their responses, we’re in a position to present a really fascinating perception into how UK college students actually really feel about financial institution accounts and monetary merchandise.
Key findings from the Scholar Banking Survey 2022
This is an summary of the important thing findings from this 12 months’s Scholar Banking Survey:
- Santander is essentially the most in style financial institution amongst college students.
- Solely 12% of scholars want to swap financial institution accounts.
- 10% of scholars by no means use money.
- Amongst college students which have overdrafts, over 1 / 4 have hit their restrict in some unspecified time in the future, and almost half are uncertain when they should pay it again.
- One in 5 college students have a LISA.
- 5% of scholars use BNPL websites typically, and an additional 17% use them generally – nevertheless, many categorical sturdy issues about them.
How do college students select a financial institution?
When selecting a financial institution for college, two in 5 college students within the survey selected to stick with the one they had been already with, whereas slightly below a 3rd received suggestions from their family and friends.
Over the previous couple of years, we have seen a gradual decline within the proportions of scholars who’re influenced by freebies and reductions when selecting a scholar checking account.
In our 2020 banking survey, 31% mentioned they selected a financial institution primarily based on the freebies. This went all the way down to 30% in 2021, and it is now decreased additional to 27% in 2022.
Alongside this, there’s been a noticeable improve within the proportions of scholars who prioritise on-line or app entry when selecting a financial institution. In 2020, 20% of scholars surveyed mentioned they selected a financial institution primarily based on this, which went as much as 21% in 2021, and has jumped up additional to 25% this 12 months.
As we cowl in additional element beneath, over the previous couple of years, we have seen a gradual improve within the proportions of scholars utilizing app-based financial institution accounts like Monzo.
For conventional banks to keep up their recognition amongst college students, our findings recommend there is a rising want for them to offer superior app-based banking options that compete with the main branchless banks.
Freebies are nonetheless essential to 27% of scholars within the survey. Nevertheless, with out well-optimised and accessible banking apps, our surveys point out that conventional banks might discover it more and more tough to enchantment to new college students within the coming years.
The place do college students do checking account analysis?
|Sort of analysis||What number of used this methodology|
|Dad and mom||37%|
|College or SU||7%|
As we have seen in earlier banking surveys, the overwhelming majority of scholars look on-line to analysis financial institution accounts.
Solely 4% of scholars within the survey received recommendation from their college. However, some felt as if younger folks ought to get extra information about scholar banking earlier than beginning uni:
- [We] might do with sixth types educating college students earlier than the top of college life.
- College students ought to be taught extra at school about scholar financial institution accounts together with what [overdrafts] and rates of interest imply.
- Banks ought to do outreach work in faculties and sixth types to assist educate college students how you can learn statements and how you can cease standing orders, and many others.
- Extra ought to be informed about it earlier than going off to uni.
Do college students take into account switching banks?
In relation to financial institution accounts, loyalty does not are likely to repay – it is often new clients who obtain the most effective offers. Due to this, it is a good suggestion to regulate what freebies different banks are providing to individuals who swap over to them.
Switching banks is a good way to get free cash, as banks typically supply round £100 as a sign-up supply to new clients.
Nevertheless, regardless of this, simply 12% of scholars within the survey mentioned they’re trying to swap financial institution accounts.
Maintaining in thoughts that the most typical cause why college students selected their account was to stick with their present financial institution, loyalty and/or comfort appear to be large elements of their banking selections.
What’s the hottest financial institution amongst college students?
Since we started operating our Scholar Banking Survey in 2015, Santander has persistently been essentially the most generally used scholar checking account. That is doubtless because of their aggressive overdrafts and beneficiant sign-up incentives (they at the moment supply a 16–25 Railcard that lasts for 4 years).
Nevertheless, we have seen a slight shift in college students’ banking selections over the previous few years. As we touched on earlier, app-based banks have gotten more and more in style.
55% of individuals within the survey mentioned they’ve a student-specific checking account, which is down from 59% who’d mentioned the identical final 12 months.
The 2021 banking survey was the primary time we would seen an app-based financial institution be utilized by the next proportion of scholars than a standard financial institution. Monzo was being utilized by 2% of scholars in that survey, overtaking the 1% that used TSB on the time.
This 12 months, there’s been an additional improve, with 3% of surveyed college students now saying they use Monzo as their fundamental checking account.
It is price noting that there have additionally been slight will increase within the proportions of scholars utilizing Revolut and Starling.
In 2021, 1% mentioned they used Revolut, and one other 1% used Starling. On this 12 months’s survey, each of those figures have elevated to 2%.
Scholar satisfaction scores
On the entire, college students are fairly happy with their banks, giving their accounts a median rating of 4.26 out of 5.
Nevertheless, that is down barely, as the typical rating in each 2020 and 2021 had been 4.31.
Right here, we have targeted on the scores of banks that provide student-specific accounts.
Nevertheless, Monzo obtained a powerful common rating of 4.41 out of 5 from its customers, regardless of not providing a scholar checking account. This once more highlights how essential app banking options will be for college kids.
How typically do college students use money?
As many as one in 10 college students within the survey by no means use money. On high of this, 38% use money as soon as a month or much less. Which means almost half are not often utilizing money, if in any respect.
Having mentioned that, some college students do use money usually. 4% mentioned they use money as soon as a day, and an additional 4% mentioned they use it greater than as soon as a day.
However, because the contactless fee restrict is now £100, most purchases will be made with only a faucet of a card.
On high of this, the rising recognition of banking apps might additionally remove some college students’ want for money. Cellular funds are extraordinarily handy.
Over the approaching years, it is going to be very fascinating to see how college students’ use of money adjustments.
Scholar borrowing habits
When wanting into college students’ borrowing habits, we have principally targeted on two fundamental areas: overdrafts and purchase now, pay later (BNPL) fee companies.
How overdrawn are college students?
|Dimension of overdraft||College students overdrawn by this quantity|
|£99 or much less||7%|
|£100 – £499||6%|
|£500 – £999||5%|
|£1,000 – £1,999||5%|
|£2,000 and over||1%|
|Relatively not say||2%|
Round three quarters of scholars within the survey informed us they weren’t overdrawn in any respect, and 13% had been overdrawn by lower than £500.
It is essential to recognise that overdrafts will be useful to college students if used fastidiously.
Scholar financial institution accounts supply fee- and interest-free overdrafts. So, if college students use their overdraft as a buffer that helps them get by till their subsequent mortgage instalment, it may be helpful.
Nevertheless, for overdrafts for use safely, it is important that college students are absolutely conscious of the borrowing phrases and that they keep comfortably inside the restrict.
Sadly, our survey discovered that is too typically not the case.
Amongst college students who’ve overdrafts, 27% have hit their restrict in some unspecified time in the future and 46% do not know when they should repay their overdraft.
Each of those figures are up barely from final 12 months, when 24% of scholars with overdrafts had mentioned they’d hit their restrict, and 45% did not know when to repay it.
What number of college students use purchase now, pay later companies?
In recent times, we have seen a rising proportion of scholars utilizing purchase now, pay later (BNPL) websites like Klarna, Clearpay and PayPal Credit score.
Whereas 5% of scholars within the survey mentioned they use BNPL typically, an additional 17% mentioned they use it generally.
Curiously, the identical proportion of scholars in final 12 months’s banking survey mentioned they used it typically, however solely 14% had mentioned they used it generally. So, though it is a small change, there was a slight improve this 12 months.
However, regardless of this, college students have very combined views about purchase now, pay later fee companies. Listed below are a few of the feedback we obtained about BNPL within the survey:
- Simple option to pay for issues whereas I watch for Scholar Loans to return in.
- A slippery slope.
- A good suggestion for individuals who do not get some huge cash immediately, however might result in monetary points [if] sudden cash issues come up.
- Harmful, fuelling consumption and residing on credit score.
- I feel they are often extraordinarily engaging for college kids however primarily it is a mortgage which it’s a must to repay.
- I like them.
- Dangerous entice for debt.
- They’re a good suggestion particularly with garments that it’s a must to attempt on and resolve in the event that they match/look good, it makes them simpler to return.
- They’re handy if you’ll be able to pay the cash again with out challenge, nevertheless it may possibly get addicting and if somebody has unhealthy cash administration it may be a tough mission to get out of.
What number of college students have Lifetime ISAs (LISAs)?
Lifetime ISAs (LISAs) are just like Assist-to-buy ISAs (that are not out there to new clients). They can be utilized to purchase a primary residence or for retirement.
It can save you as much as £4,000 a 12 months with a LISA. Each monetary 12 months (April–April), the federal government pays a 25% bonus on the quantity saved, which means you might obtain as much as £1,000 free of charge annually.
LISAs are beneficiant saving schemes, however surprisingly, 32% of scholars within the survey did not know what they had been. 18% had one, and the remaining 50% had been conscious of them however had not but opened an account.
To search out out extra and see our listing of the highest suppliers, check out our full information on how LISAs work.