Should you be saving for university?

The short answer is 'yes'!

That's because full time university fees can reach £9,250*, according to UCAS, and living expenses can more than double the overall cost – which all makes for a financial burden your children will carry for years to come.

But you can help by setting aside income yourself for their education.

It may seem a long way off until they are ready to fly the nest but it comes around quickly and it's wise to plan ahead.

And the earlier you can start, the better, as it gives the savings time to grow. 

Mum Mandy Needham says it's a weight off her family’s mind that 11-year-old son Bramwell will have access to years of savings to ease the burden of university fees and costs.

She said: “The savings plan was taken out 20 years ago so it wasn’t for him initially.

“You don’t know what the future holds so we decided to start putting some money away and decide what to do with it later on.

“Once he was born and the university fees issue was in the news, we decided that’s what we were saving for. And if he doesn’t go to university it will help with the deposit for a house.

“He’s also had a few small windfalls and he knows it’s all in the account for when a life-changing opportunity comes along.

“It’s a peace of mind thing. It will put him on an even keel whichever path he chooses.”

Talking to a financial adviser help you devise a plan to achieve the amount of money you think will be needed for further education.

Financial adviser Barrie Storm, from our trusted partner Wren Sterling, said: “The parents should utilise their own tax allowance first before putting it into the child's name. If they don't and fall on hard times, the money won't be theirs to use.

“As this is perhaps a 17-year plan, something for the longer term, they should consider if cash savings would give them the right returns for what's needed.“

A stocks and shares ISA may be an option.

A financial adviser may consider recommending a stocks and shares ISA or a Junior Cash ISA which can be utilised by a parent or grandparent and works the same way as a savings account, but also makes use of the £4,270 Junior ISA allowance each child has each year.

It grows with each monthly payment, along with interest earned – and the money is safe, with access at 18 years old.

We recommend that you seek independent financial advice when making decisions about setting money aside for your children to ensure you're making the most tax-efficient plans. Everyone's circumstances and aspirations are unique and only tailored advice will deliver the best outcome for you.

*UCAS (Undergraduate tuition fees and student loans, Summer 2017)
  • The levels, bases and reliefs from taxation depend on the individual circumstances of the investor, and may be subject to change.
  • The value of an investment can go down as well as up and you may get back less than your original investment. 
  • The Financial Conduct Authority does not regulate taxation advice. 
  • Equity investments do not afford the same capital security as deposit based investments.

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