Research has found that professionals would like to help to keep their child’s student debts at a more manageable level by contributing 67% towards their university costs.
Analysis of the higher education funding reforms announced in Summer Budget 2015, published by the Institute of Fiscal Studies, established that today’s students graduate owing an average £40,500, which specialist financial services provider Wesleyan calculates could leave parents having to find £27,135 by the time their child finishes university.
They are being urged to start saving as early as possible to make this ambition more affordable.
Wesleyan has stated that if parents put away £82 per month from their child’s birth until graduation, they could cover their anticipated contribution to university costs.
However, if they put off saving until their child starts primary school aged five, they will need to save £115 a month, while waiting until they begin secondary school at 11 will mean an increase to £199 a month.
If they wait until their child has taken their GCSEs aged 16, the amount parents will need to save more than doubles to £424 a month.
Alan Whiting, Wesleyan Group’s head of marketing, said: “Higher education costs have soared in recent years and show no sign of easing, with maintenance grants being replaced with loans and some universities being allowed to increase tuition fees from 2017.
“With more graduates facing large debts when they finish their education, it is understandable parents will want to help where they can, even if they don’t intend to cover all the costs. The message for them is clear – the earlier you start saving, the more affordable it will be.
“Parents should ensure they have the right long term savings plans in place and make the most of tax efficient savings products, and in particular utilise their full ISA allowance.
“As our research shows, many parents are prepared to pay for some, but not all, university costs, which will still leave their children with debt. With this in mind, parents might also want to instil good financial habits in their children from a young age to help them cope with their student debt and ongoing money matters once they’ve graduated.”
