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New parents are set to have an added worry on their hands if they want to send their kids to university.
According to Scottish Friendly, one of the UK’s leading mutual societies, parents could have to start putting away a minimum of £75 a month as soon as their baby is born to pay the majority of their child’s university tuition fees by the time they reach 18.
To help make this easier, Scottish Friendly has launched a new service devoted to parents to allow them to consider a range of regular investment plans provided by the organisation which can help them start investing to help pay for their child’s future education.
By putting off saving until their child is 5 years old, Scottish Friendly calculates parents would have to save £100 a month to be on track to pay less than three quarters of the fees. And if they hang off until the child’s 8th birthday, and paying £100 a month, this will mean only an estimated half of the costs are covered.
Current Government proposals will see the cost of higher education more than double in 2012 with a typical three-year degree course in England and Wales costing an average of £21,000 (£7,000 per year). Fast-forward 18 years with inflation (assumed to be 2% a year), and a three-year degree course could cost nearly £30,000.
Neil Lovatt, sales and marketing director of Scottish Friendly, said: “As a father of two I’m only too aware of the looming cost of tuition fees. Starting a regular savings and investment plan when the child is young can at least help shoulder some of the cost and give comfort that you have the opportunity to give your children the best start in their adult life.”
Scottish Friendly’s range of regular investment plans for University have a minimum monthly contribution of £10 and feature investment terms up to 21 years. They come in a range of tax-free and tax-paid investment options and can be taken out in the child’s name and by parents, grandparents and other family members and friends.
Scottish Friendly is not responsible for the accuracy of the information displayed on externally linked third party websites. The Scottish Friendly Group of Companies consists of the following companies: Scottish Friendly Assurance Society Limited – Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Member of AFM, Member of ABI: Life, Savings and Investments. Scottish Friendly Asset Managers Limited – Authorised and regulated by the Financial Conduct Authority. Member of The Investment Association. Registered in Scotland No 187215: OEIC Managers, ISA Managers. Scottish Friendly Insurance Services Limited – Authorised and regulated by the Financial Conduct Authority. Registered in Scotland No 113007. SFIS (Nominees) Limited - Registered in Scotland No 397351. Head office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.