New Parents Need to Save More to Fund University Fees
New parents could be expected to save up to 240 per cent more into a Child Trust Fund to cover the cost of increased university tuition fees, new figures show.
Universities are now able to charge up to £9,000 per year of study. New parents could need to save as much as £27,000 if they plan to cover the cost of a child's higher education for a three year undergraduate degree.
This is only the cost of the tuition fee and these figures do not tack into account the cost of living, accommodation, tools for studying or any further increase to the initial fees.
"As more universities are expected to charge the maximum tuition fees from 2012, parents are under increasing pressure to make important decisions about saving for their child's future earlier than ever,” said Kate Moore, Head of Savings and Investments at Family Investments.
The average monthly direct debit into a Child Trust Fund is £24, which would amount to an estimated £8,000 after 18 years, however parents now need to save a significant amount more to cover the increased cost of putting a child through university.
In order to cover the cost of the increased tuition fees, new parents would have to save £82 a month from the birth of their child, but if parents delay saving until their child is aged five, they would have to put away £129 a month.
With economic uncertainty and inflationary pressure taking their toll on family finances, many households will struggle to save this amount of money for their child’s education.
Government cuts and tighter financial controls on credit, as well as a general desire for most people to cut back on spending, many people are turning away from their credit cards in favour of prepaid credit cards.