The cost of sending a child born this year for a 3-year course at university in 2028 is likely to top £64,000. University costs have already reached £42,000 in 2010, and are rising every year. To manage such a substantial challenge, forward thinking and family financial planning are crucial.
The current costs of £42,000 include tuition fees of £9,435, living expenses of £20,200, and student loans of £12,450*.
These costs will rise considerably over the coming years. For a child of 10 today, for example, who would go to university in 8 years’ time, the total cost is likely to be over £50,000.
For a child of 5 today, the cost is likely to be over £57,000, and as mentioned above, the costs for a baby born this year, commencing study in 18 years’ time, will reach £64,500**.
Family financial planning: how much do I need to save?
Bearing these figures in mind, forward financial planning and knowing the options for children’s saving are crucial, for anyone hoping to give their child the best shot at a professional career.
Families with several children will wish to build even greater provision for education into their family financial plan, if they wish to avoid the difficult choice: which of my children goes to college, and which have to remain.
The following guidelines will show the monthly savings required to cover the full projected costs of a third-level education.
To cover the full costs for a 10-year-old, you would need to be setting aside £417 a month, starting today.
For a 5-year-old, the monthly saving would have to be £246 per child, and for the new baby, £169.
Good independent financial advice is crucial in family financial planning, and the first words might be: action is urgently required, as putting off your savings plan for your child’s education will be costly. For example, delaying saving for 12 months could add 15% to your monthly savings goal, and delaying for 2 years would increase these monthly savings targets by a third.
*Data on costs of university from National Union of Students / Aimhigher and refer to cost of education outside London
**Data on future costs of education and savings projections from Investec Asset Management, calculating inflation based on the Consumer Price Index. Monthly savings figures based on an assumed annual growth rate of 6%.
