5 Reasons You Should Save For Your Children’s Tuition Fees Now
Whether or not you should attend university and earn a degree has been long disputed over recent months as talk of another potential increase to university fees makes its way into the media. Though there is the potential for better job prospects, is it worth saving for your child in the early years of their life to help lessen the debt of university? In this article, we are giving you 5 reasons you should begin saving for your child’s tuition fees now:
Tuition Prices Are Increasing
One of the biggest reasons for putting money away for your child’s university degree is due to the rising price of tuitions fees. Although this is now capped at £9000, this is set to rise in the near future. Though there is a cap on £9000, this does not include loans for accommodation and other costs associated with living elsewhere. This means that there is a £27,000 debt even before adding up all the other additional costs. However, saving in advance can help lesson these additional costs, allowing your child to pay off their student debt much faster. Nonetheless, there are other finance options such as bad credit loans to help you in case of a financial emergency, so it is important to ensure that the money saved does not leave you short at the end of the month. By saving only what you can afford, you can then ensure that you have the money needed should you find yourself in a financial emergency.
Junior ISA or Child Trust Fund
In addition to this, there was a trust fund and ISA program implemented in 2011 that allows parents to save up to £4,128 in a tax year into the ISA and it can be used only when the child is 18 year or older. This can then either be taken as a cash amount or invested in stocks and shares. However, HMRC data reports that around 7% of ISA that has been paid into have been cashed in as a lump sum rather than invested in order to pay for a deposit on a house or even university funds.
Reduces Need for Government Loans
Although these ISA’s are very important, it may be beneficial to open up a saving account to place a certain amount in per month. This could be of a benefit to you as the interest rates are much more customisable when opening a savings account and can come with a number of benefits that may not be accessible with a student account or a government ISA. Ultimately, this could mean that a meeting with the bank may be beneficial as they can point you in the right direction of a saving account that works for you.
Helps Pay Accommodation Fees
Accommodation is one of the biggest causes of an increase in loans and therefore it is important to look at saving the money over a longer amount of time. By putting money aside to cover the cost of accommodation, you are then reducing the number of loans they have to take out whilst ensuring that they have enough money for food and other maintenance.
Interest Is Added
If you begin saving at the right time, you can begin to earn interest on the money that you are saving. Although this may not be a lot at first, this can add up over time, helping to boost the overall savings amount. This could be beneficial for your child by the time they turn 18 as this interest could have built up to a substantial amount. Although this is completely dependant on the type of account that you have opened, this is important to remember.
Whether you are looking to begin saving right now or you are looking to begin saving in the near future, you can find the perfect account for you to begin saving for your child’s future. When will you begin saving?