Saving for University

[Combusting]

I appreciate so many won’t be in a position to be doing this but I wondered what parents who have or are supporting kids through university would advice to those with younger ones in terms of how much to aim to save?

(I know lots of people feel that University they are on their own and each to their own views of course!)

For context - we’ve got two - 7 and 3 currently. I think MSE advice is to take the loan even if parents have saved for it as they don’t repay unless certain threshold hits? So whether anyone here has saved for fees or maintenance or top ups I’d be really keen to know some figures.

we’ve been really lucky to have £14k so far saved up earmarked for this thanks for gifts from grandparents largely and they are small still (7 and 3). But the amounts needed feel so huge!

DD is 17 and we're expecting to give her around £5000-£6000 a year (and possibly some incidental things as well like buying food shopping). But she's disabled, so her ability to work is limited. That's in addition to her taking a full tuition fee loan and the minimum maintenance loan (we earn too much for her to get more).

no idea what that might be in real terms when your DC get to university age. Or even if going away to university will be a "thing" by then. More and more young people are choosing alternative options.

Is the money in accounts you hold or is it in your kids names ?
Because any money in the child’s name is legally theirs on their 18th birthday, and can be spent on whatever the now young adult chooses. A holiday or fast car or brand new wardrobe may appeal more than Uni.
So my advice is to keep,it in your names and dole it out in chunks for Uni expenses

Ah yes of course NOTHING in their name! No JISA etc - my nightmare is they blow it up at Ibiza or something !

Do not pay tuition fees unless you are a squillionaire and it’s just loose change to you. It’s an insane waste of money and I have seen parents foolishly do this and then not have the means to tangibly help with something useful like a housing deposit.

the most sensible situation is that YOU pay their rent up for them, but they take out the tuition fee loans and live off that for spends.

average accommodation cost is about 9k for London and 7k for elsewhere. Times that by 3. Then double for 2 kids.

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Thanks! Yes of course there’s no knowing what exactly they do. We’d like to be prepared for Univeristy though - and if paths differ we can use that fund to support them in various other ways.

Sorry that should say they take out the MAINTENANCE loans

Very useful, and the MSE advice is precisely this.

From what I’m understanding then, it’s £27-30k maintenance per first degree per child so approximately £60K for two children for solely maintenance for an Undergraduate degree.

We don’t save anything in their names but can roughly put aside 3k a year combining all GPs gifted money earmarked for their HE and a much smaller £100 we save. Even that I think doesn’t hit the amount of 60k by the time eldest goes (if he goes!) in 2037 but youngest won’t go (if she does!) till 2041. All being well as my grandad used to say - as life can throw all sorts of curve balls I know and it’s a long time till then.

We put aside £100 each month per child from when the kids were born (in the days when had child trust funds and the bonuses), DS1 is now 16 and his is worth £30k (it was a stocks and shares one, not a cash savings one). It is in his name and no guarantee he'll want to go to uni but he's fairly sensible so I'm hoping he'll use it wisely either way. One advantage of being in their names is that we can't touch it which would be very tempting as our circumstances have changed dramatically.

In theory but my DS wants to do a 5/6 year degree so plan for this too. I think it’s a good idea to save a lump sum but we will be trying to pay out £700.00 of our monthly budget and leave the lump sum. Will see how it goes.

We saved, but once 18, the money was his (junior isa)

He decided to get a loan and keep the money adding to it as its tax free

He works during the University holidays

He decided on a course at a local ish RG University, so no accommodation costs, which are eye watering

He's going into his 3rd year soon with student loan debt, BUT also £20k in the bank

He's just bought his 1st car cash

Anecdotally, he has a few friends who are loving back home for the 3rd year too

The University "experience" just isn't as it was pre covid

Degree apprenticeship all the way.

Provides a low ish but still better than many student jobs salary, some time off for study, often very interesting certainly relevant work and a ready made peer group with whom to arrange study groups etc.

Our department takes one each year and across the whole organisation there are some thirty places. There is a six month rotation of roles with some limited input to chose where they go next. Each department puts some effort in to ensure they will be interested in joining once they are qualified. Opportunities in Technology, Marketing and Finance.

The places tend to attract many. many more applicants than places available, with the technology and finance oversubscribed by hundreds and the marketing by thousands.

Fees are paid on top of the salary. The 'student' is required to cover their registration fees for the relevant degree, usually less that £500 overall.

It's not the full sleep to lunchtime and party all night experience that I remember but it does offer the magic combination of work experience, s degree and most likely at least one job offer.

For all but the

As a pp touched on, think about your financial situation as a whole. If you save solely for uni costs but are hit badly in the next recession (and given the age of your children there's likely to be one before they reach university age) then you probably won't get any government support until you've spent it. It may make more sense to overpay the mortgage so your home is secure and then when that's paid you should have spare money every month to help them.

Some confusion here. The tuition fee and living costs are two separate loans. The living costs loan is means tested. We have always been above the threshold so I’m not sure exactly where it is. Our DC could only borrow about £4500 and we topped up, initially another £5k and then £6k this last year. He worked in the holidays.

Bear in mind that some uni halls are very expensive - £8k plus. Others less so. Our son paid about £5k in first year (2018).

PS tuition fee loan money goes straight to uni - not to the student.

That's my feeling, too.

We didn't save specifically for University, but we always threw any money we had 'spare' (which we potentially could have saved for them) at the mortgage.
Therefore, by the time the dc went to University, we had paid off the mortgage and had that money spare each month out of our income, to help support the dc as needed.
I am glad we did it like that and have no regrets. Gives you far more choice.

Remember that student loans is a political football, and the 'rules' around them change regularly. You have YEARS before your dc will be of University age, and there could be 5 different changes between now and then.
Students starting now have very different T&C from my youngest, who is currently still at University.

Plus, your dc might not want to go to University. Or they might get sponsored. Or they might do a degree apprenticeship. Or they might go off and work first and then be independent when they start some years later. Or of course might not go at all. Or they might start and stop and change courses, or re-take years, and you might end up paying out for extra years. Or they might do medicine or another degree that is a lot longer than 3 years.

What about those who can't get into degree apprenticeships? They are really hard to get onto so you can apply but you can't choose to do one as they might not have you! My children's friends who got on them were all straight A students so it seems they are for the lucky minority in their current guise.

I have one in London and one out of London, both doing 3 year degrees and it costs me about £10k a year to top up their loans. There is an enormous spectrum of expense based partly on the university location and length and intensity of course but mainly based (imo) on what parents feel they need to cover, which ranges from “they are adults! They need to support themselves if they choose to go to uni! Nobody ever gave me anything and I’m FINE!” To “dd needs a studio in central london to be near her course and she has limited time with her hobbies and socialising so we pay for a cleaner and send her restaurant vouchers and money so she can just grab something healthy on her way home and we bung her an extra £200 a week for her nights out because she needs taxis and cocktails are really expensive in the bars she likes to go to and we pay for her mobile phone and her gym membership and buy all her clothes” .
If you have the equivalent of £5k per year per child then you will be well placed. An extra £10-20k will be a big help if they want to do a longer course of in a more expensive location. As a pp said, reducing your future expenses by overpaying your mortgage now might be better than saving up lump sums.

we overpay our mortgage very significantly currently to the maximum parameters allowed. So this isn’t in lieu of that or anything. We’ve been overpaying for a while now.

Yes I understand absolutely that DC may/may not go to university - and may well do something quite different. It is still useful to save for DC (not in their names - although I understand some people like JISAs and similar), and it’s been useful to see a spectrum of views. We will continue to overpay our mortgage and continue to save as we have been for DC - (fingers crossed and “all being well” as my grandpa used to say!) and hopefully the savings can be used to support them whether it’s university or some other path they choose.

MSE actually doesn't always give the best advice in relation to the student loan. It is geared to ensure that the less well off still go rather than be put off by the thought of debt.

There are definitely occasions where if you can afford it it is better to self fund.

Further student loan repayments are taken into account for mortgage AFFORDABILITY checks which he very much glosses over, again as he doesn't want less well off students to decide to not go to uni when they should perhaps be going.

Further student loan repayments are taken into account for mortgage AFFORDABILITY checks which he very much glosses over, again as he doesn't want less well off students to decide to not go to uni when they should perhaps be going.

I did some back of an envelope sums on this, and it seemed to me that, unless (as a parent) you had sufficient money to comfortably do both, it would be better to give your DC the money as a lump sum towards the mortgage deposit, than to use instead of them getting a student loan.

They May do a degree apprenticeship, DS is and earns 25k per year and has no tuition fees. Horrendously competitive and I think harder to get a place than a regular course.

I would recommend your children getting a job if they can when older he did and it was the making of him. So by 22 he has already had four jobs and his savings are around 15k, he achieved 3 grade A at A level.

Also don’t tell them they are in for a soft ride if you are going to fund everything. Tell them you will assist but sometimes it can make them a bit crap at life if spoilt. DS has no idea we will be giving him a substantial gift towards his house deposit. We will match what he has saved when the time comes.

I did some back of an envelope sums on this, and it seemed to me that, unless (as a parent) you had sufficient money to comfortably do both, it would be better to give your DC the money as a lump sum towards the mortgage deposit, than to use instead of them getting a student loan

Absolutely agree with this. Ds will come out of uni with about £42k of debt which is tuition fee costs and minimum loan, We top up £6k per year due to his accommodation, he is about to go into his 3rd year. Ds2 will start when he finishes. If I could afford it I would give him £42k deposit for a house, never so he didn't have to take out tuition fees or maintenance loan. He has already run potential salaries though a calculator to see what his student loan repayments would be. Even on £40k he would only pay £95 per month. He has a LISA that he paid into from grandparents putting money into an account that became his at 18. Luckily for us he is very sensible and has £10k in there.

We saved a "potential" uni top up pot so for both children at currently £5k each per year that would be £40k to cover a masters each. Both of mine had a CTF but we never topped that up. Ds1's was £1200 at maturity. Ds2's is less but we will top him up to the same amount as Ds1. He too has the same Grandparent savings.

The mindset we had was whilst our intention was to fund the top up if we needed that money it was ours and we would choose where to spend it. We are lucky not to have been in a position to need it plus we have other savings for funding holidays, home improvements. We would raid that savings pot first.

Re degree apprenticeships whilst brilliant they are very few in numbers compared to degree course places. They are harder to find and apply to. We have had a parents' evening about university and apprenticeships. There are lots of levels of apprenticeships but degree apprenticeships are fewer.