University tuition fees to rise from next year in England

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University tuition fees will rise from next year, the government is set to announce on Monday as it tries to address the poor financial health of one of Britain’s most celebrated sectors.

Education secretary Bridget Phillipson will on Monday afternoon announce that tuition fees in England will increase in line with the retail price index from September 2025, their first increase in eight years, according to people with knowledge of the plans. Fees have been capped at £9,250 since 2017.

The sector’s finances have been under pressure from rising costs and salaries, while the freeze on fees has left them increasingly dependent on a dwindling pool of international students, particularly from China.

Nick Hillman, director of the Higher Education Policy Institute, said universities “need a fee rise that is significantly above inflation even to stand still”, adding the sector faces £400mn of extra costs as a result of increases in employers’ national insurance contributions.

“If the announcement is a rise of just 2 to 3 per cent, the worries about financial instability will continue,” he said. “We also need to know what extra support there will be for students in maintenance support, as they are hurting just as much as institutions.”

In a report in June, the Institute for Fiscal Studies said that tuition fees should rise with inflation from 2025-26, and that an inflation-linked annual rise would see them reach £10,500 by the end of the decade. 

It noted that increasing fees in line with the retail price index would avoid there being further real-terms cuts to the sector, which it estimated at £1.8bn by 2030 unless fees are raised.

The cap on fees means universities are losing an average of £2,500 on every domestic student, according to analysis by the Russell Group of leading research universities. 

Labour said in its election manifesto that higher education was “in crisis” and that the current funding settlement did “not work for the taxpayer, universities, staff, or students”, but has failed to provide details of how it would address the problems if elected.

More than 50 universities have announced job cuts this year and several are on the verge of bankruptcy, according to Whitehall officials.