By Mark Haslam, Senior Parliamentary and Public Affairs OfficerLeft to right: Shakira Martin (NUS); Yvonne Fovargue MP; Anita Bailey (NASMA); Sarah Poretta (Money Advice Service)Weâre proud of our role supporting the All Party Parliamentary Group on Debt and Personal Finance, and on Tuesday 13 November, the APPG hosted an event on improving student financial capability.The APPG debt event took place on day 2 of Talk Money Week, the nationâs largest conversation about money.The event marked the launch of new research from the National Association of Money Advisers and Money Advice Service, on the financial pressures facing students.Speakers at the event included Anita Bailey from the National Association of Student Money Advisers (NASMA), Shakira Martin, President of the NUS, and Sarah Poretta, Director of UK Financial Capability. Yvonne Fovargue MP chaired the event, and those attending included debt advisers, student money experts as well as MPs.Many of our own clients are young, as are most students, and they tend to more vulnerable to financial pressures than older groups. For instance, theyâre more likely to have short term high cost credit loans than other age groups. The research launched at the event, based on a unique survey of 5,118 students, bears this out.The research will help NASMA develop and grow the reach of its good work. It provides a diagnostic toolkit to better understand the unique characteristics of different types of students, categorised in five different types:âSupported and sensibleââConfident and thriftyââInexperienced and at riskââAnxious but spendingââDisengaged and overwhelmedâThis will help organisations like NASMA better target their support.Student financial capabilityThe event was also an opportunity to reflect on grounds for hope for student financial capability, as well as grounds for concern.The good news is that around three-fifths of students are working to a budget, putting to bed stereotypes about students being footloose and fancy free.The research shows three-quarters of students feel confident managing their money and two in five save money most months of the year.However, on the flip-side, a significant minority of studentsâââaround one in five of themâââare struggling with their finances.Of those who had gone overdrawn, 40% had used an unauthorised overdraft leading to additional charges and fees. Our overdrafts campaign is calling on the Financial Conduct Authority to ban unarranged overdraft charges, to avoid trapping people in a cycle of problem debt.Student finances and their pressuresThe pressures on student finances are many, and unique.On the expenses side, course costs can be expensive, and transport and childcare costs are singled out as issues. Measures to improve discounted travel for students, and to extend childcare support, have been suggested by organisations like the National Union of Students (NUS).Campaigners also want to tackle pressures on student incomes, for example so more employers pay the living wages (students often work a part, or even full-time job). There are calls for reforms to student finance.In particular, both NASMA and the NUS say the the idea of the student loans system, i.e. paying large lump sums once a term, is out of date and undermining effective budgeting. Instead it would be better for arrangements to be paid monthly or weekly, to help students manage their finances, and avoid build-ups of unnecessary debt.Student finances in the futureWithin the charity, as part of our new four-year strategy, weâre keen to ensure that we start helping to move both the debate and the policy framework towards prevention as well as cure.Tackling the pressures, both at the level of costs and at the level of student finance, could be as effective as early interventions to ensure debt problems, among young people, donât become a spiral into a debt crisis.However, students, like the rest of the population, will always face unfortunate changes in circumstances that make budgeting difficult. So itâs absolutely vital we continue to support the work of organisations like NASMA, whose work in this areas is so important.Weâll be working more on these issues in the years ahead, and in the meantime weâre delighted to have helped bring these issues to Parliament as part of this yearâs Talk Money Week, and in support of our partnersâ important work.
