Graduation is a big milestone in life. If you’re feeling nervous, it’s probably more than just about walking up on stage in front of your whole year and their families. We’ve put together a guide of what to do after you graduate so you can successfully step out of university life and be prepared.
Close your student bank account and open up a graduate account
As soon as you graduate, you must consider closing that student bank account. According to most popular banks, student accounts usually roll over onto graduate ones, but not all banks offer this. Sometimes, you can encounter large fines if you do not complete the process manually. It’s best to just ring your bank and see what they offer.
Don’t feel like you have to stay with that bank, you can always do some research and see if anyone else is offering better deals! Some banks offer graduate accounts that allow you to pay off your student overdraft slowly in monthly instalments, which is always handy! Other benefits may include things like extended overdrafts and tools to help you budget.
Don’t worry about your loan just yet!
After a recent update to the student loan repayment scheme in 2024, you now do not have to start paying back your loan until you start earning £27,295 a year (or its equivalent in monthly or weekly earnings). Repayments are calculated as a percentage of your income above this threshold, so repayments pause automatically if your earnings dip below this amount.
While the cost of university can seem overwhelming, and the idea of student debt might feel intimidating, it's important to remember that student loans work more like a graduate tax than traditional debt. The repayment terms are income-based and time-limited, meaning:
- You only repay if and when you're earning enough.
- Any remaining balance is written off after a set period (typically 30 or 40 years, depending on your loan plan).
So, try not to let tuition fee headlines or debt figures scare you. Focus on the opportunities your degree will provide and remember that repayment is designed to be manageable and aligned with your future earnings. You can read more about this on the GOV.UK website.
Find out where you are going to live
If you’ve spent the last three years living away from home, then you will either be excited to head back or you might be dreading the thought of it; everyone’s situation is different.
It may be time to make some big decisions. Do you want to stay in your university city? Would you like to move back home? Who would you want to live with? Where are you going to live? And most importantly, where can you afford to live?
The first thing you need to do is to get your deposit back from your current landlord. Students are sometimes notoriously messy, so it might be a good idea to motivate everyone in the flat to tidy, clean, and mop to get back your deposit because you will need it!
Regarding time and money, it’s best to start thinking about your options as soon as you graduate, as many flats become available in July, this would be the best time to put down a deposit and get started. Make sure that you let your bank, phone provider, electoral registry, and local doctors know that you have moved into a new accommodation, and you don’t want any important letters going astray.
Start saving
It’s always handy to start saving as soon as you have your graduation date. After that final loan comes in, you won’t really see any money like that again until you start earning. Therefore, it’s always best to have some money saved up for graduation, this way you have more options to choose from with a bit of cash in your pocket. Just by putting away a few pounds each week, you will really see a difference as you graduate, you can even have a savings pot in your room for any cash left over each week from the food shop or your bills. A good idea here might be to check out online banks that offer a good interest rate on saving pots. There are plenty to choose from like Monzo and Revolut that even allow you to create separate pots to help you keep your money organised.
Council Tax
If you are choosing your accommodation after university, then it’s probably best to find out what council tax band your chosen area falls into. You can find this information on GOV.UK. Whilst students do not pay council tax, it’s a mandatory payment for all homeowners and renters.
It’s usually paid in monthly instalments and goes towards ensuring your bins are emptied, helping to keep the area tidy, fixing the roads and funding local services such as the police and emergency services. Knowing how much you will have to pay to factor into your monthly outgoings is important.
The horror T-word
Yes, you’ll need to pay income tax when you graduate if you earn over the £12,570 personal allowance for 2024. Anything you earn beyond that is taxed at 20% for most people, with higher rates applying as your income increases. It might feel like a lot at first, but tax deductions are automatic, and your take-home pay will already have this sorted. If you're curious or want to check your tax code, this page on the GOV.UK website is super helpful!
Use price comparison sites for rent & bills
Estate agents can sniff out a graduate! Do not let people view you as clueless and take the first offer you see when it comes to sorting out your bills. Head over to price comparison sites and do some digging. Write down combinations of your bills from different companies and see which one comes up trumps!
In terms of finance in general, the Money Advice Service have some brilliant tips for managing your finances as a graduate. You can check it out here.
