"Get the latest tips about how to manage you wealth"
Have You Saved Enough For Education Fees?
As a parent, naturally, you will want the best for your children and that certainly stands true for their education. A good education will set them off on the right path in life and it can help them to create their own career. However, higher education can prove costly and it is common for many students to get into debt while studying but as a parent, you can help them.
University student’s are actually accruing around £51,000 of debt on average, an alarming rate that doesn’t set them up in the right way. With this in mind, around 40% of parents are now saving towards the cost of sending their children to university. In fact, there are some who are even saving before they have had children, proving that some prior planning is needed in some cases. For those who have been saving, a large portion of them have been putting their funding into an ordinary savings account and that means that they are not enabling their money to work hard for them.
While you can choose to put your savings into a savings account with high interest, it is possible to use your pension if you choose to do so. If you have a pension in the UK, then the recent pension freedoms that have been put in place make it possible for you to use your pension. This enables you to take a lump sum that can be used to cover the fees and other costs when you turn 55. This does offer a tax-efficient way of putting money away for the future of your children but also your own. However, opting to do this does require careful planning and the right advice because you need to make sure that you have enough money for your retirement before choose to pay for your child’s education.
This feasible option is one that can work but you will need to consider all options. When you have worked hard all your life to build up a pension, you need to make sure that you don’t risk losing that just by choosing to use it to pay for your child’s education.
As a parent, you want to make things as easy as possible for your child and the last thing you want is to see them build up large amounts of debt but you also need to make sure that you don’t sell yourself short at the same time.