Financial Planning For Your Children's Education

Posted on: 28 May 2015

If you have children, you'll be hoping that they go on to further education in years to come.  It's wise to begin planning for this well in advance.  Here's what you need to consider when planning finance for your children's future educational needs:


How much you need to put aside will depend on the educational route you plan for your children.  If you intend to use the private route through senior and junior school, you'll have to pay fees, followed by more fees and living costs as your kids enter further education and university.

Fees depend on the pupil's age, the school's location and reputation, and whether your children are to attend as boarders or day pupils.  Moving on to higher education is expensive; not only are there course fees to take into account, there are living expenses to be factored into the equation too.

When it comes to calculating the cost of your kids' education, bear in mind additional extras which could increase costs considerably.  Such items could include school trips, equipment, books, exam fees, uniforms, and the like.  Luckily, there are a number of different savings schemes available that could help you to cover the cost.

School and University Tuition Fees Savings Schemes

The money you can raise through one of these schemes is intended to cover school fees.  However, if your kids decide not to go on to further education or you change your mind about sending them to a private school; you can use the money for whatever you like.

There are a number of different schemes to choose from depending upon your circumstances.

Capital Schemes for School & University Tuition Fees

These schemes are based around a single lump sum payment made into a recognised guaranteed fund.  A protection component is included to provide you with cover in the event of the death of either you or your children.

It's best to set up one of these schemes early, and you should invest at least 25% of the estimated school fees you will ultimately have to pay.  Many parents start such a scheme when a child is born to allow plenty of time for the investment to grow.

Income Schemes for School & University Tuition Fees

If you don't have ready capital to invest, you could opt for an 'out of income' scheme instead where you will make regular payments into the scheme on a monthly or annual basis.  This arrangement offers flexibility, and although you still need to begin early, the scheme can be tailored to suit your circumstances.  The scheme matures when school fees become due.

Combined Schemes for School & University Tuition Fees

Combined schemes allow parents with a small amount of capital to invest initially to top this up through large payments made at irregular intervals over a shorter term.  Combined schemes are useful if you receive annual or biannual bonus payments, or if you have other savings plans that are due to mature at regular intervals over a long period.

Immediate Funding For School & University Tuition Fees

These schemes are essentially loans.  They are more expensive than the other types of plans but can still help to make fees more affordable.  Bear in mind that you'll still be paying back the loans for a number of years following the completion of your children's education.

In conclusion

There are many different ways of funding your children's education.  Have a chat with an experienced accountant for more advice on how to plan for your family's future. To learn more, contact a company like John Osborne & Associates if you have any questions.


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