Graduates amass more debt than first anticipated, suggests a Norwich Union report, as an additional £1800 is needed just to get themselves through the office door.
A study of over 500 university and college leavers indicates the cost of work clothes, books and equipment, a car and grooming tends to cost the average graduate an extra £1800 to start their first day’s work, alongside the average £13,000 debt amassed during their studies.
NU suggests the cost of preparing for the working environment is:
- Work clothes - £230
- Books and equipment - £50
- Car - £1500
- Grooming - £24
NU suggests there is a further financial shock for most graduates as their starting salary is often around 30% lower than they had expected to earn once they graduate.
An Institute of Employment survery indicates the average starting salary for graduates is £16,000 or a monthly disposable income of just over £1,000, whereas the average debt acquired to complete a degree and start work is the equivalent of a year salary, in addition to an overdraft with the bank.
That said, almost a quarter of those questioned admit their basic outgoing expenditure is more than their monthly wage, so one-third have no money left over at the end of the month.
One-fifth of the 500 questioned spend £100 or more towards debt repayment while more than a third keep their costs down by living at home and paying rent to their family.IFAonline
Pension savers need to engage with their retirement options far earlier than is currently normal to ensure they save enough through their lifetime, according to a report from the Association of British Insurers (ABI).
The majority of financial advisers (85%) believe the number of self-invested personal pension (SIPP) providers will continue to fall in the coming year, according to Dentons Pension Management research.
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