£21bn UK student economy is good news for retail + hospitality, reveals new report

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New figures released today unveil the surprising value of the UK student market. Uncovered by Student Beans, the online platform providing success for businesses with Generation Z, these new findings highlight the lucrative reality of the student economy and why Gen Z is more financially savvy than we think. 

In total, around 2.4 million students enrol in university programmes across the UK. Of this figure, 94% of eligible students take out student loans via Student Finance England to fund their degree fees, maintenance costs – or both. Almost a quarter (23%) of students have additional sources of income from part-time work, and 1 in 5 UK students are supported financially by their families. 

The student economy

The latest 2021 figures reveal that in total, UK students are collectively receiving an annual income of£20.9 billion – an average of £8,725 per university student. Of this figure, Student Beans reports that UK students are spending £12.7 billion per year. Despite the significant amount of disposable income, Gen Z students are making sensible purchasing decisions, with findings revealing that students are splitting essential and discretionary purchases close to 50:50. 

Purchasing behaviour

The average UK student spends £5322.30 annually per year (£433.43 per month). Of this, almost half (49.90%) of spending is for essential items such as rent, bills, groceries, household, transport and pharmacy, with the remaining 50.10% spent on non-essential items – totalling £2666.47 per year (£222.21 per month).

Outside of essential spending, the report has found that Gen Z’s are spending disposable incomes most on clothing (£494.24), eating out (£465.06) and activities (£351.64) – news which will be of great interest to the hospitality industry as it continues to recover from the impact of Covid-19. 

A full breakdown of Gen-Z student spending can be found below:

Essential Spending (£/%) p/annumNon-Essential Spending (£/%) p/annum
Rent and bills – £1024.22 (19%)Groceries – £806.82 (15%)Car or public transport costs – £398.53 (7%)Household products (e.g. cleaning, maintenance) – £219.22 (4%)Healthcare and pharmacy products – £206.88 (4%) Other – £110.85 (2%)Clothes, shoes and accessories – £494.24 (9%)Restaurants/takeaway – £465.06 (9%)Entertainment and activities (e.g. going to concerts, cinema, bowling) – £351.64 (7%)Books, stationery and study items – £222.76 (4%)Home entertainment – £208.81(4%)Beauty products – £191.22 (4%)Sport and fitness – £183.17 (3%)Travel (e.g. holidays or visiting family) – £169.33* (3%)Tech products – £164.82* (2%)Homewares (e.g. furniture, furnishings) – £104.73 (2%)*excluding irregular annual purchases

William Harris, managing director at Student Beans, comments: “These new findings show us that not only are UK students financially savvy, they’re also living well within their means and making very sensible purchasing decisions. In what we hope will provide a positive outlook for those in the Hospitality Industry, our report reveals that Gen Z is looking to spend 16% of their annual disposable income across food, activities and events – and we predict that this figure will continue to grow as Gen Z’s confidence increases.”