A quarter of UK parents regret not saving earlier for their child’s education and one in five say they wish they had saved more, according to new data. Funding the cost of education is a big and important issue.
It seems that more than 70% of parents contribute towards the cost of their child’s education, at a “rich mix” of fee-paying schools, colleges or university. Despite this, less than half of those questioned in research by HSBC said they had started thinking about these costs before their child had started primary school. This compares to 60% of parents in the rest of the world.
20% of those British parents interviewed said they would be willing to cut back on holidays to fund their child’s education and 14% said they would work longer hours to keep up with education costs. Nearly three-quarters of parents said they relied on day-to-day income to fund their child’s education.
HSBC, who were behind the research, say almost half of UK parents admitted to not knowing how much they were spending on their child’s education. This was the highest proportion of any country in the survey; the global average was 22%.
Many parents, it seems, just don’t know how much they are spending on education – even when the core fees are met by the local authorities. Ignorance is bliss – but the opposite has the strong capacity to create so called “justifiable anxiety”.
HSBC say that parents in the UK with a child in paid-for education can spend about £128,600 over the course of primary, secondary and tertiary education.
It seems from the HSBC report that parents in Asia lead the way in terms of planning ahead. More than half of parents in China said they funded their child’s education through general savings, investments or insurance and more than two-fifths through a specific education savings plan. In contrast, fewer than one in 10 parents in the UK (5%), Australia (8%) and Mexico (8%) choose to fund their child’s education through a specific education plan.
HSBC said that in nine of the fifteen countries surveyed, paying for their child’s education is most likely to be parents’ biggest financial commitment, above others such as mortgage or rent payments and household bills.
Whatever may happen politically in relation to government support of higher education costs there is a real and important need for informed advice to seriously and concertedly attack this wide open door of opportunity. Done well this will benefit parents, grandparents, children and the advisers putting in the time and expertise to deliver excellent outcomes.
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