Uni Savings - 3 Kids

[uniMum83]

Hi

Have 3 kids who would in theory start uni in 2027,2029& 2031.

I don't know if local (London) or elsewhere but they're all talking elsewhere atm

We've been trying to save to avoid huge debt for each of them. They'll take loan for living but e and DH and saving up this below (trying to!!)

Anyone else been here done that and suggestions please or corrections on figures:

Each child:
£27k fees
£24k (£8k a year living costs)
£18k (£6k a year accomm)

Total needed is £207k, have £34k saved and aiming to save £2.2k pcm until 2030 (mid point of child 2 & 3). Saving into s & s fidelity and vanguard ISAs

Any suggestions thoughts on amounts or the plan

(Obv all could change if we lose jobs etc just planning hopefully!) thanks

We don't spend anything like £8k a year on ds1 living costs!

For a start your children should get jobs to make their contribution whether that's a holiday only job (as my ds has) or evening/weekend work.

The accommodation might be slightly low but if you're planning on taking the maintenance loan I don't overly understand what you're saving for?

Yeh the kids will get jobs

What does it cost you for one year with the student having a job?

Thanks for input - only have our own 2000s experiences plus googling to go on iyswim

My son is in his second year at university. He qualifies for the lowest maintenence loan. He also worked for a year before uni to provide a financial cushion. The loan did not cover accommodation so we contributed to that - £3,000. It is better now he is in a shared house.
I think it is a good idea to have an emergency fund but not as much as you are planning. Think of the fee loan as a graduate tax and then forget about it (not your problem), be aware you might need to help out a bit with accommodation. Then talk jobs, holiday jobs and saving to THEM not you.

Living costs way too high. Pointless giving them fees but them taking out loans for everything else. All or nothing is the only thing that makes financial sense.

And all only makes financial sense if a) you can guarantee they'll otherwise repay their loan in full over the 40 years post-graduation, and b) you can also afford a house deposit.

Most can't - I don't think you can. So full loans and save for a house deposit all the way imo.

He works during the summer and at easter earning money for his social life and to run his car plus holiday etc.

We give him £50 a week for groceries and this is term time only because obviously we feed him anyway when he's home.

Honestly I’d prioritise saving to help them buy property. The loan repayment threshold is so high now that most graduates won’t pay their loan off by any means. It seems pointless to me to pay for something upfront when you can borrow and not pay it back. Of course give them extra to top up but they should get jobs as well.

I wish my parents had done this 😂. They paid for my accommodation but between dh and I we still pay over 500 month in Student loan repayments

Are you saving it into their junior isas or yours? Pros and cons to both but one factor with your own savings is that if you divorce along the way (let's face it, 50% chance, plus it's a long way from here to then) you would lose half that money to your ex who might spend it all on the new partner.

Ds gets £9.5k per year for living costs including accommodation. Partly funded by loan and partly funded by us.

He also works, his work is sporadic but well paid. I reckon it will add another £1,500 to his budget.

Dd did a course in London where you can't get student finance. We spent

£10k 1 year fees
£6,600 house-share accommodation (550 per week)
She got a part time job (2 evenings plus all day Saturday and half day Sunday) which earnt her about £150 per week. This paid for her food, travel and bills.

In Scotland so no fees
We give ours 1100 each a month to cover rent and expenses

Pay mobiles,contact lenses and big shop at start of terms

They don’t have loans and don’t work term time

The only way I'd be paying fees is if I was an ancient parent or grandparent & 40% (currently, no reason this will not go up) of their inheritance would be lost by inheritance tax, plus a probability I might survive for 7 years after gifting it.

Absolutely they get jobs. Eldest schooled people's horses @£20/hour so earned significantly more than her friends (min wage being a pittance)

Both of mine chose four year courses (!). They have taken the loans. I feel for them but I decided to save for the parental contribution (which has been about £500 per month per child) and hopefully a house deposit instead.

I agree with most.
There is no need to hand over that level of living costs after accommodation.

But I wouldn't be expecting to pay those costs anyway.
If you want to / are able to save £69K per child, it will be MUCH more useful to them as a deposit on their first home, and them paying the graduate tax during the years they are earning, than them not having to pay the graduate tax but never being able to buy as they can't save for a deposit because they are paying high rent. A large deposit like that would bring the interest rate down on the rest of the mortgage too, and that would continue to be lower even if they stop working / go part time / take parental leave / start their own business / are unable to work for any other reason for a year or several.

Another thought, is for you to throw the money you are thinking of saving for them at your own mortgage, so, when the time comes you have the option to support them from your own income (or not) as you choose.

Plus, of course, they might not all want to go to university, or they might to medicine or architecture or something that takes a lot longer than 3 years.

Do spend time looking at Martin Lewis's advice on this.

I know people say it's too much, but it's 2023 now and these kids are going to uni several years from now, while inflation is running at 10%

Also, even Martin's money saving pages are now more circumspect about paying back loans vs paying upfront. The loan agreements are a lot less favourable after this year.

I had a money savy friend at uni and her parents brought a 4 bed terrace then rented the other three rooms out to student friends. It paid the mortgage and some uni fees. This was in leeds so appreciate that down south this would be a lot harder.

I agree with other PP I think saving for a house is a better use of money and struggling a bit as a student is the whole experience

The other thing to consider is your own retirement.

Whilst the kids were little dh paid very little into his pension. He has upped that now but he recently lost his job and although he is hoping to replace the work by September it is not guaranteed and so if we had spent our savings on ds's university fees we would have lost our cushion. He was also taken ill several years ago and had to have 6 months off work. At one point we thought he would never work again. You never know what life might thrown at you.

I have two at university and they have £8,000 / year for all costs , in a city outside the south east of England. Neither of them work in term time as very full on courses ( healthcare ).

Rents in a half decent shared flat have gone up from £340-360 a month (plus bills ) 5 years ago to £450/500 a month now. And they have to pay for 12 months a year.

£8k won’t be enough in London for sure , unless they have jobs to top up.

Thanks for the responses

Don't want to drip feed but have 3 BTL in London with about 60% LTV and about £500k equity across them so kids have a home or can sell one to split up £100k or so each for them at the time for house deposit

Main home has £500k left mortgage worth around £1m overpaying and will clear in 6-8y depending what save for kids

Pensions we have £150k each, and putting in 15% each (about £35k).

We're nearly 40.

If we were older think the overpay pension then take 25% tax free at 58 could be a good option for supporting uni kids but we won't be old enough then

We didn’t save a penny for our three DC to go to uni. We paid the rent shortfall and their living expenses from salary. We prioritised paying into our pensions and retired the month after our third DC finished uni and we were in our low/mid 50’s.

I agree. (My dd is in the second year of university).

GP pay tuition fees - their request.
We pay accommodation and DS lives off maintenance loan. He also works to top up, pay for holidays etc.
More students than before will pay back the loan with the new rules. And worth noting this will be many more males than females as women tend to earn less, go pt, become SAHP. Martin Lewis' stats never reflect that.
We can afford to give towards house deposits.