Loan News Parents Advised To Save For University Costs

Written by Editorial Team

14 August 2003

With A Level results out today, scores of 18-year-olds will be starting university in a few weeks’ time.

The National Union of Students currently estimates that the average cost of a university education is now £24,000, and many parents will be concerned about the cost of sending their teenager away.

Some parents will be considering a personal loan or homeowner loan to cover the costs.

With the UK’s top universities planning to introduce top-up fees of up to £3,000, the cost of higher education is rising rapidly.

Research by F & C Management shows that only two fifths of adults have made any savings on behalf of a child

Irene Bell, Marketing Manager at F&C; Management, commented: “For those who have yet to put some money aside, the important thing is to start saving as early as possible, before the costs become too great.”

The study of 1000 adults by the investment company found that just 5 per cent of the population thinks that equities would be the best long-term option for saving on behalf of a child, with 80 per cent thinking that savings accounts with no element of risk are most appropriate.

Ms Bell pointed out that investment in equities could pay off in the long term, though parents are advised to consider all available options, as the value of investments can fall as well as rise.

She said, “Investment trusts can be the perfect way to save for a child: you can invest a lump sum when your child is born and top it up whenever you’re able, or alternatively you can invest from as little as £50 a month.”

Ms Bell advised parents planning for their child’s future to seek independent financial advice if they are unsure where best to invest money.

“Though markets continue to be volatile you should not stop thinking about your long-term goals,” she advised.

“The cost of a university education rises year on year and there can often be a shocking realisation when your child receives their A-Level results that the following three years will be expensive.”

F&C; provides a saving for children calculator at www.fandc.com/calc for parents to estimate how much they need to save.

The company also produces a free guide to saving for children.