You’re probably all wondering why I think it’s necessary for us to learn about these things because surely it won’t mean anything for us young people? But alas: 1) it’s good to be up to date with what’s happening in our economy, and 2) annoyingly, we are being affected. Rent in Redland and Clifton is already astronomical, having a fully-stocked fridge is a luxury, and most of us are working part-time in cafés and bars just to get by. Student loans are changing again, and to just to put the cherry on top of the cake, most of us are graduating straight into a Hunger Games-esque job market. Anyway, let’s get into the things relevant to us:
Student loans
The student loan repayment threshold has been frozen – which only changes things for those of you in fourth years who are on something called ‘Plan 2’. Basically, the repayment threshold for students who started uni between 2012 and 2023 will not rise each year with inflation, like it normally does. It’s now stuck at £29,385, so more grads will have to start repaying back student loans sooner. Most graduate roles pay you around £25-30k per year, meaning that you’re likely to have to repay HMRC (the UK’s tax, payments and customs authority) almost immediately. The rest of us are on Plan 5, which it’s interesting to note is annoyingly a worse deal for us, despite this new freeze. As normal, fourth years will have to pay 9 per cent of what they earn over the threshold, but it won’t be equal to the UK’s rates of inflation, making it effectively a graduate tax rise. Lucky them!
Maintenance loans
Along a similar line, maintenance loans are going slightly up. To keep up with the rising living costs, our maintenance loans are going up by 3.1 per cent. This may just about make a difference to us, but maybe only by £20 or £30 a month. As we all know, that won’t be so helpful whilst trying to live in one of the most expensive student cities in the UK. So realistically, this won’t affect us very much. Regarding paying it back, luckily repayments only depend on income, not the size of your loan (though obviously if you have a bigger loan you will have to pay a bigger amount back). Historically, many graduates haven’t been able to fully pay back their loans, but with the new change of thresholds to Plan 5, it has been predicted that 79 per cent of people will. A small plaster over a very expensive wound.
Energy bills
In hopefully happier news, average energy bills are being reduced by £150 a year from April. Whilst this may sound promising and may be positive for some of you, just a warning that many of us here in Bristol live in old, poorly insulated houses which need pumped full of heating regardless. Also, some landlords include the cost of bills in rent, so you may not feel the benefit of this cut. On the bright side though, your household monthly bills may decrease by about £10 or £15, which is better than nothing and may help you to avoid such tense conversations with your housemates about whether or not the frostbite is worth it.
Rail fair freeze
There has been a rail fare freeze! This essentially means that the prices of regulated rail fares, for example season tickets, commuter tickets, and some single/return tickets will not go up for another year. This is brilliant for those of us who like to make the trek down to Temple Meads to pop home for holidays or weekends, and even better for you lucky people with lovers only a train ride away. This will help to take some of the pressure off how expensive the tickets seem to be this year, i.e. at least they won’t get any worse. I wish the government could promise us that the trains will actually come and go on time this year though.
Income tax
Much like the weather, the income tax threshold has also frozen. Now, this one’s a bit more complicated, so listen up. Technically, the amount that you can earn before having to pay taxes is £12,570 for income tax and £50,270 for the higher rate. Normally these amounts would rise with inflation, but this new Autumn Budget has stopped that. This affects us students because as we begin to earn money over that threshold, we will be taxed on it, but in 5 years’ time when this freeze is supposed to end, we will be earning much more than that because of the general trend of wage inflation (and possible promotions!). The tax threshold would be much fairer if it increased relative to wages increasing. This is known as a ‘stealth tax’ because the government is getting us to pay them more in a way that goes quite under the radar. So ultimately, a freeze like this under inflation means that we might end up paying more in tax even though it won’t seem like anything changes on paper. Annoying.
Cost-of-living support
Though this won’t affect most students, it is very important for those who will benefit from cost-of-living support and welfare changes. This is relevant to students with disabilities, children, on Universal Credit (a payment scheme from the government to help low-income earners or people who are unable to work), mature students and those of you having to work significant hours. Some benefits have increased for those eligible, raising to be more in line with inflation, and vulnerable people are being supported more. These small changes could make significant positive differences to help cover ever-increasing costs of food, rent, transport and childcare.
Student housing
Finally, it’s interesting to know what hasn’t changed that is relevant to Bristol uni students. Despite rent probably being the biggest strain on us, nothing in the Budget addresses student housing specifically. The slightly skewed maintenance loan calculator based on our parents’ incomes remains the same, as well as rent regulations and student loan structures. Both remain just as (seemingly) unnecessarily complex.
So, that’s all that I’ve managed to understand myself. I hope this has been helpful – go forth and impress your parents with your new knowledge around the Christmas dinner table! (Actually, please don’t, you might seem a little bit sad.)
