The Sutton Trust produced a thought provoking paper last month written by The Institute for Fiscal Studies. The aim was to assess the impact of the new student loan system for fees and maintenance introduced in England from September 2012.
The study, entitled "Payback Time" found that a typical student would leave university in England with "much higher debts than before" averaging over £44,000.
In cash terms the researchers estimate that graduates will now repay, on average, a total of £66,897 as they will face the real above average interest rates introduced on student loans as well as the higher tuition costs which are up to £9,000 a year.
The consequence is that most students will still be paying back student loans in their 40's and 50's.
Consider this when wondering why it's a struggle to encourage people to save for the future. The UK is already the worst prepared in the world for retirement. A study by HSBC in 2012 showed that over half the working population was not preparing adequately for retirement and one in five are saving nothing at all.
The side-effect of increased tuition fees is that the UK has created a graduate tax that will only serve to exacerbate the problem of saving for later life. How can you be expected in your 40's to save for a lifestyle you want in your 70's when you are still paying for the education you received in your 20's?
