With students facing an estimated £50,000 bill for a three-year degree from next year, parents are considering ways to help their children with university costs.
Research conducted by homesforstudents.co.uk has found that from 2012 the average student will have to find £48,503 over the course of a three-year degree. This is an increase of 55% from the cost for the average undergraduate today (£31,373) over their university career.
Nearly three-quarters of universities, 72 per cent, have said that they intend to charge £9,000 for some, or all, of their courses. All 123 universities will charge more than £6,000.
We’ve put together some helpful tips around saving for your child’s future.
A range of new Junior ISA products are expected to be offered from around November 1st 2011 and will offer parents a new, tax-free way to save for their child’s future. Looking at a savings or investment plan dedicated at helping your child through university can be a good place to start. The returns can be used to cover some education costs and reduce the debt a student graduates with.
The amount of risk involved with an investment can be managed by matching it appropriately with the length of time you have available to invest, your tolerance towards fluctuations in returns and your investment time frame. All investments involve some level of risk. Even if you choose the least risky investment, cash, there is still a risk of inflation eroding the value of your capital or falling interest rates reducing the level of your return.
Ask for help
According to The Children’s Mutual, many grandparents and godparents said they would like to help more towards education costs. Grandparents can effectively reduce their inheritance tax liability by making regular gifts out of income, which can either go towards future education costs, or help to pay for children’s living expenses. An option is to give up to £3,000 to family and friends each year tax free, as small gifts to anyone of up to £250 and wedding gifts to friends and family of up to £5,000 (for parents), £2,500 (for other relatives) and £1,000 (for everyone else).
Look at what’s already available
If your son or daughter is going to university, there’s financial support available including student loans, grants and bursaries. Additional sources of help are available for disabled students; parents if there’s an adult who depends on you financially; students with children; and specific help for those on certain courses such as medicine, social work and certain healthcare courses.
If you would like any advice or support around planning for your child’s future, contact us and we will be happy to help.