School and University Fees
At this time of year many parents are preparing for the next chapter in their children’s lives, whether it’s starting school in September or heading off to University.
Private School fees and University fees are increasing at a faster rate than inflation and for many people the cost of putting your child through school and university is a daunting one!
The average cost for a day pupil is in the region of £18,000 per annum and over £30,000 for a boarder. Source: Independent Schools Council
Although this looks frightening, especially if you have more than one child, with sensible planning it can be achievable without ending up with a huge mortgage or stopping the family holidays for the next 15 years.
The best advice anyone can give is to plan! Start planning early, the earlier you begin planning the easier it will be.
Most of us don’t begin planning for our future when we’re in our teens, especially for our future children’s education, but people who plan are normally those people who achieve. You can start a DIY financial plan yourself or you can visit a professional financial planner who will develop a plan with you.
Saving and Investing
The question that everyone asks is where should I save?
The answer is different for everyone, but in its simplicity a lot depends on how long you have to save for. Will you need the funds in the next couple of years or have you got 5 - 10 years or more?
If you need access to the funds within the next few years then you will need to be saving rather than investing. Short term savings should be put in deposit based accounts, such as Cash ISA’s, National Savings and high interest savings accounts. These types of saving vehicles are the safest place for your money and you can find out which accounts are offering the best rates by shopping around. The internet has numerous websites comparing each account, but beware the best rates are not always the best for you so check the terms carefully!
If you have more than 5 years to save then you can begin to be a little bit more adventurous with your money and seek out better returns by investing your money. Longer term savings can be invested in Gilts, Corporate Bonds, Shares and Property.
Create an investment portfolio that’s well diversified so as the famous saying goes ‘don’t keep all your eggs in one basket’. Another important tip is to make sure you keep your savings and investments in as many tax sheltered vehicles as possible and remember to use each parent’s annual tax allowances. For example each parent can invest up to £20,000 in ISAs for the 2018/19 tax year.
Help from Grandparents
The children’s Grandparents can often bring financial support when funding school fees and, if properly constructed, inheritance tax (IHT) may be saved. If the Grandparents do offer help then it is recommended they seek professional advice.