How families are preparing for higher education

Recent news that British families have seen the worst wage reductions in Europe over the last few years does not inspire confidence in the future of financing our children’s education.

However it would seem that we are already planning for the future university education needs of our dependants. A new survey shows how parents plan to help with rising university costs.

Parents with university ambitions for their children are taking early steps to start saving, with 79 per cent starting to put money away as soon as their child is born, a new report has revealed.

The survey, conducted by Family Investments, looked into the ways in which parents of young children are preparing for the cost of university, with results that indicate a shift in financial priorities for most households. 

Of the 82 per cent of respondents who want their children to attend university when they are old enough, over one-third said that they were cutting back on their own savings in order to boost their children’s, while around 18 per cent said they had cut back on holidays, home renovations and other luxuries in favour of adding to their children’s education fees. In total, 70 per cent said that they plan to contribute more than £5,000 to their children’s university costs.

The survey also found that parents’ knowledge of student finance was significantly lacking, indicating that more could be done to put minds at ease and make the relevant information more accessible. Only 21 per cent were aware that low- and middle-income families could be eligible for grants which don’t have to be paid back, while almost half didn’t know whether student loans would affect credit ratings in the future. Perhaps most surprisingly, only 37 per cent of respondents were aware that tuition fees don’t have to be paid up front.

Kate Moore, Head of Savings and Investments at Family Investments, commented on the results: “Family finance has been hard hit in recent months, and unfortunately for those looking to secure a future for their children it seems that the price is only getting higher. We’re confident that the results of this survey will help us understand how households are coping with the extra costs, and hopefully learn what information and advice is needed to give parents the full picture as their children take their first steps towards higher education.”