Just Graduated? Master Your Finances: Top Tips to Pass with Honors!

Review Graduate Banking Options

Typically, student bank accounts transition into graduate accounts once you complete your studies. It’s crucial to understand the specifics of what your bank offers post-graduation. Some institutions may extend an interest-free overdraft period for a couple of years, potentially up to £3,000, whereas others might decrease this limit or start charging interest soon after graduation.

“It’s wise to verify any changes to your overdraft conditions to prepare for any necessary repayments before incurring charges,” suggests Paul Slinger from NatWest, who adds that banks usually inform customers about these changes well in advance.

For example, NatWest provides an overdraft up to £3,250 with no interest for the first year post-graduation, which reduces to £2,250 and then to £1,250 in the subsequent two years. HSBC offers a similar structure with a first-year overdraft cap at £3,000, dropping to £2,000 in the second year.

Many banks require you to have held a student account with them to qualify for a graduate account. Although it’s possible to switch banks before completing your studies, options become more limited once you graduate. Banks such as HSBC, TSB, Barclays, and Bank of Ireland do accept switches post-graduation, as noted by Save the Student.

Exploring various offers or using comparison websites like Compare the Market can help you find the most suitable deal. Typically, you can transfer any existing overdrafts to your new graduate account when you switch, at which point your old account will be closed.

If you’re still utilizing your overdraft, consider setting up a plan to clear it before interest charges commence. This might involve setting up a regular transfer from another account used for daily expenses to your graduate account.

Tom Allingham from Save the Student notes that a graduate account isn’t necessarily the best choice for everyone. “Not every graduate needs a 0% overdraft. If that’s the case, you might want to consider other features in a current account, like a switching bonus or a high-interest savings account linked to it,” he advises.

Keep an Eye on Student Loans

In England and Wales, loan repayments typically begin in April after you finish your studies, with the threshold depending on your specific repayment plan. Most students who started after August 2023 fall under plan five, which requires repayments once their annual earnings exceed £25,000. Those who commenced their studies between 2012 and July 2023 are generally on plan two, with a threshold of £28,470.

Students from Scotland, categorized under plan four, start their repayments once their income surpasses £32,745 annually, and usually don’t need to repay tuition fee loans if they studied within Scotland. In contrast, Northern Irish students on plan one begin repayments when their annual earnings reach £26,065, benefiting from relatively lower tuition fees.

Repayments are deducted automatically from your salary, or through self-assessment if you’re self-employed.

Allingham suggests that most recent graduates can relax about repayments in the short term. However, he warns that errors can occur, such as premature or below-threshold deductions, so it’s important to monitor your payslips and possibly seek a refund for any discrepancies.

“However, don’t ignore your loans,” warns Slinger. “Regularly check your online student loan account to stay informed about your balance and any accumulating interest.”

Updating your contact details and income status with Student Finance is crucial, especially if there are significant changes or if you move abroad.

Address Council Tax Obligations

As a student, you’re exempt from council tax until your course concludes, which is not necessarily aligned with your graduation date. For many, this means council tax payments should have commenced from around June, regardless of whether the student lease extended through July or August. Postgraduate students might have a slightly extended exemption period ending in late September.

If you’re dealing with course extensions or resits, inform your local council as they may prolong your tax exemption. Universities often provide confirmation letters to support your exempt status if necessary.

If housemates are switching over time, the council usually requires whoever remains and is not classified as a student to pay the council tax. If everyone departs at different times, the bill might be divided accordingly.

If you receive an incorrect bill, it’s advisable to contact your local council to clarify your situation. “Communicate your status to your local council and inquire about any applicable discounts, such as those for living alone or with other students,” suggests Slinger.

Finalize Utility Payments

If your student lease is still active, be prepared for its conclusion. At that point, ensure you record the utility meter readings—such as gas, electricity, and water—and submit them to your providers. This ensures you’re only billed for your actual usage. The same principle applies to wifi services—cancel them if they’re no longer needed, and be mindful of any notice periods.

If you’ve been sharing bill responsibilities with roommates, verify that all payments have been made and close or transfer any joint accounts to those who remain. Tools like Splitwise can facilitate this process. “Remember, if your name is on a bill, you’re responsible for ensuring it’s closed or transferred,” notes Slinger. “When moving to a new place, don’t forget to compare different providers to find more cost-effective broadband or energy solutions.”

Also, be sure to provide your suppliers and landlord with your new forwarding address.

Verify Your Tax Code

When you start a new job, it’s essential to check that your tax code is correct. Initial payslips may use emergency tax codes if your employer doesn’t have your complete details.

You can update your information and manage your income tax details through the HM Revenue and Customs website or app. If you’ve paid too much tax, you might be eligible for a rebate. For those who are self-employed or freelancing, remember to register with HMRC if your earnings exceed £1,000 in a tax year. You have until October 5 of the following tax year to register for self-assessment, giving you until October 2026 if you start now.

Maximize Student Discount Benefits

The advantages of student discounts don’t immediately cease with your studies. You can continue using services like UNiDAYS and Student Beans until your account expires. Post-graduation, UNiDAYS offers a GRADLiFE program, which requires re-verification for access. Student Beans also provides a Grad Beans option, extending access to popular discounts, according to Allingham.