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Original poster

How much do I need to save for Uni per child?

69 replies

cheapandchic · 13/03/2012 08:22

Can anyone give me a realistic figure for university, including housing and food and such? At the moment my kids are young, but living in London I can't seem to save a penny. Hopefully things will get better but I need to have a rounded figure in mind as a goal to save for each child.

OP posts:
Sunscorch · 13/03/2012 08:51

A minimum of nine thousand for the tuition. Could be up to 36k if they end up doing an expensive four year course. Even higher still for medical or architecture or similar.

Living costs depend entirely on where they live and how frugally they can survive. I spent about 2.5k per year living away from home in Nottingham, which I imagine is on the low side.

I did have a friend who lived there as a freegan... but she was definitely a statistical outlier.

telsa · 13/03/2012 09:11

If the system remains the same your children will have access to loans for tuition fees. They'll be paying them off with above-inflation rates of interest for the rest of their lives - but they are in the lucky position of being able to be saddled with debt in their youth. In addition, there may still be loans for maintenance (food, rent) - but that will likely not cover everything. So, hard to say what you would need to add to that. It's a how long is a piece of string question - studying in London away from home or in the South more expensive than Teeside or the local BA-awarding FE college. And, in the government's view, as far as I see it, with their blase attitude to all this, if you have to ask, then clearly it is not for the likes of you and yours (not my opinion - you realise).

In my opinion, the only hope is to get rid of this rotten system.

wordfactory · 13/03/2012 09:33

OP, DH and I have twisted and turned this one, and at the current rates it is far better to et your DC borrow the money for their tuition fees. Even if you have it to give, invest it, the returns will outrun the interest on the loans.

So what you need to save is an amount for your DC to live on for the duration of their degree. Take a look at halls of residenc for how much they charge, then add in a sum for extras.

neolara · 13/03/2012 09:42

I thought there wasn't an option of parents paying for fees. The students pay fees back through taxes and will only pay when they are earning over a certain amount. Even if it were possible to pay for fees upfront, I'm not sure this would necessarily be a good financial decision as if the student never earned more than the national average, they would never have to pay anything back.

JustGettingByMum · 13/03/2012 09:50

I agree with the poster who commented on how long is a piece of string!

DS1 is at Southampton, so south England but outside London. Because of DHs income, DS only qualifies for the min maintenance loan, approx 3.5k, we are adding approx the same to this to pay his housing costs, then he lives off his maint loan in the year.

Again loans are available for the full ytuition fees, in his case that's for a 4 year course (9k pa approx for new students from this autumn)
Whether you can, or choose, to pay these fees upfront is a personal matter, in general it seems that if your DC is unlikely to ever be in a higher rate tax band job even after getting a degree then it is better value to take the loan. Of course for many families, there is no choice, & students will have to take the loan. The system sucks!

wordfactory · 13/03/2012 09:50

My understanding is that you can pay up front. Certainly it was my DH's intention to do so (he was adamant that he wanted DC to leave education entirely debt free).

However, research and discussions I've had on MN have led me to believe that it is actually preferable to take out the loan for fees. The terms and rates are so good, the cash is better off being invested elsewhwere.

KateSpade · 13/03/2012 09:52

It's not financially a good decision to pay it up front, & with so much hype around student loans with students, if you plan to support your kids by monthly money they might feel a bit left out, which is what my friends felt & then applied to get a student loan.

CarrotsAreNotTheOnlyVegetables · 13/03/2012 09:57

Seems like a better plan to get DCs to take out the loans, as the rates are so good, then aim to help them with the repayments when they become due so the debt does not become a burden to them.

It is worth remembering that Student Loan debt is not taken into account by lenders when making decisions on offering mortgages etc. so it is not the same type of burden as normal debt.

JustGettingByMum · 13/03/2012 10:06

As I said, it's a personal decision, and if you are able to pay the fees upfront, then other factors such as your attitude to debt, how much you have calculated the total repayment to be based on your DCs job prospects (hopefully), and whether you choose to spend your money in this way , all come into play.

Parents who are accustomed to pay private school fees may choose to simply keep paying - their choice.

LydiaWickham · 13/03/2012 10:47

We're assuming £50k per DC. If you can't save that, there will be ways for them to self fund through loans etc, anything you can give them will reduce the overall debt, so think what's managable for you.

Also, remember you don't have to hand over the full sum the day they leave for uni, you could then take the difference in your living costs (food, petrol from not running around after them etc) and give them that each month to help.

Ponders · 13/03/2012 10:52

the interest rate on existing student loans is lower than on savings, so it used to be worth investing it \link{http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678642&_dad=portal&_schema=PORTAL\Plan 1}

From this September it won't be, so there's no point taking one out if you can afford not to \link{http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678755&_dad=portal&_schema=PORTAL\Plan 2}

wordfactory · 13/03/2012 11:56

Ponders that is interesting, thank you.

wordfactory · 13/03/2012 12:00

A quick peep at Halls of Residence (catered) at, say Bristol, looks to be around £5k.

ragged · 13/03/2012 12:05

I would assume £45k per DC.
That said, I'm not planning to save a penny for this purpose. The system already looks quite generous & acceptable to me (I have a foreigner's perspective).

wordfactory · 13/03/2012 12:34

How would that break down ragged?

£9 fees.
£5 halls.
£1 extras.

wordfactory · 13/03/2012 12:35

So £15k per year. Just under average school fees.

Labootin · 13/03/2012 12:40

I shall let my children run wild and free at sixteen.
Sod saving up for those ungrateful wretches get a bloody job.

they're probably too thick for university anyway

Ponders · 13/03/2012 12:44

There is quite a wide range of charges for halls accom, wordfactory, but they all seem to be building more & more with en suites, & the cost goes up accordingly.

DS2 is in uncatered new en suite accom at Sheffield & that's around £4.5K for 42 weeks; catering would cost another £1K approx. They have some uncatered with shared bathroom for about £3.7K, but not many.

The rented house he's going into next year is £260 a month (rent only, bills on top) which is a lot cheaper, but Sheffield is a cheap city for accom anyway I believe.

DS1's shared-bathroom room at Newcastle 2 years ago was around £3K a year, & is not much more now - not such a nice room as DS2's at Sheffield (walls are painted brick Shock) but perfectly good for students! But he said recently he's heard that they're being demolished, & presumably rebuilt with en suites, because that appears to be what the majority of students want now. (Shared bathrooms can be pretty disgusting but for the sake of £20-30 extra a week you'd think it would be worth suffering Grin)

\link{http://thecourieronline.co.uk/2011/11/ricky-on-the-road-to-ruins/\University paper says rents will increase £10 a week} - yeah, right Hmm

TalkinPeace2 · 13/03/2012 12:51

You would have to be MAD to pay the fees up front rather than take out a loan.
No matter how rich you are.
If the cash is spare, do something USEFUL with it
send the DCs to university
once they graduate and the interest starts clocking up THEN bring the money back onshore and pay off the loan or buy them a house or something
but if your DH has not done a net present value analysis of the student loan system, they need to run it past your accountant.

MrsHoarder · 13/03/2012 13:04

If they are ever likely to want a mortgage or to start up a business or anything of that nature, then they will be much better off financially if they can have cash rather than the absence of a debt which does not pose a threat to financial stability and may never be fully paid off.

They may need living expenses top-up, but that is of the order of £2-3k per year and some of that you will be able to save after they have left.

TalkinPeace2 · 13/03/2012 13:12

student loans DO NOT COUNT towards mortgage debts
as they are contingently repayable
and for lower earners will never need to be paid off in full

think of the fee money as a graduate tax and then it all makes much more sense

telsa · 13/03/2012 13:18

My advice - study in Germany or the Netherlands.

MrsHoarder · 13/03/2012 13:18

Did I explain poorly? I meant that money which is intended to be put towards helping children get a start in adult life is better being used to fund a larger mortgage deposit or business start-up rather than paying off the student loan.

Of course saving the money so that it is available in several years time is my current problem, and this approach might change if (when) the system changes before then.

seeker · 13/03/2012 13:24

Since when has paying for university been a parent's responsibility?

TalkinPeace2 · 13/03/2012 13:25

the only way that the University funding crisis can be got rid of is to massively reduce student numbers again.
Bliar's DAFT idea to have 50% at university needs to be backtracked from ASAP

When I was at uni it was 5% - that was probably too low
It is currently 35-40% - which is clearly unaffordable

drop back to around 25% and then with the majority of the country doing other things, there will be more acceptance of the expertise in what used to be known as HNDs and equivalent