Should you be saving for university for your kids?

Should you be saving for university for your kids?

The cost of university makes big headlines these days, with figures of £50,000 + of debt saddled on our children. As a result, many parents are asking if they should be saving up towards the cost of university, so they can pay it for their children.

So does saving for university make sense?

Yes and no. The fact is that, although the student loan sounds like a huge amount of debt, you should be wary about paying it up front with your own money. Under the current system, not all students will end up paying off their debt, so why would you pay out from your own savings, when it might not need to be repaid?

The problem is though, that until your son or daughter graduate, you will not really be able to assess the likelihood of them paying it off. The amount they repay is dependent on the amount they earn when they graduate, so unless you have a crystal ball (that works!) you can not know this. Obviously some degrees lead to higher earnings potential and a higher likelihood of employment on graduation, but anyone’s future is never completely predictable.

On the other hand, tuition fees aside, the day to day living costs of university life (accommodation, food, entertainment, books and equipment) are not always covered by the student loans and parents are the ones who often end up footing the bill here. Whilst a lot of students do get part time jobs, our research has shown that 1 in 5 parents are subsidising their children £400 a month and over half give their kids £200 a month.

This is where saving for university could come in very handy. Finding £400 a month when you haven’t planned for it can be difficult and has meant that many parents are finding they have to cut back on their own spending in order to support their children.

Funds4Uni – a free and easy way to build up a university savings fund.

Funds4Uni is a partnership between The Scholarship Hub and easyfundraising which allows you, as the parents, guardians or even other members of the family or friends, to support a student (or prospective student) by generating free donations to them, every time you shop online.

It doesn’t matter if your child is still only five years old, you can start to save towards university for them now. Obviously, the longer you save towards university, the more money you will have in the pot and if they finally decide not to go, you can just take the money out and use it for something else.

Retailers signed up to the scheme make donations towards the students’ university costs each time you make a purchase and it is a great way to generate some additional funds for them without it costing you anything extra.

 

 

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