New student debt average hits £20k

Government emphasis on increasing long-term savings has taken another blow with publication of a new survey by the British Medical Association suggesting the average level of final-year student debt is now in excess of £20,000 for those on five-year courses.

This represents a 5% increase – or more than twice the official rate of inflation – on the same time last year for the 1,900 students surveyed, the BMA says. For those on six-year courses the debt load averages more than £22,600.

One-in-10 surveyed had debts of more than £25,000, about 100 owed £30,000 or more, while one owed more than £55,000.

The average basic annual salary for a first-year junior doctor is £20,295, the BMA adds.

The government currently is launching consultation on proposals put forward by Pensions Commission head Adair Turner at the end of November, which called for employees to contribute 5% earnings gross, or 4% net of 1% relief provided by government. Employers would provide 3%, taking the total to 8% of earnings to go into a pot administered through a suggested National Pension Savings Scheme. That 5% contribution would come on top of NI and income tax payments.

The average UK house price is about £165,000 or a multiple more than 8 times the average junior doctor’s earnings in their first year.

If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email jonathan.boyd@incisivemedia.com.