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Since the introduction of tuition fees for university courses in the UK in 1998, the cost of a university education has soared from a relatively innocuous £1,000 per year to an eye-watering average of £8,354 according to the National Union of Students.
If we add to that the living expenses of the average student, which come in at £12,056 (not including London where living costs increase to £13,388) as well as a further £709 for travel and £1,070 for books and equipment, it doesn’t take a genius to work out that a university education is a huge financial commitment. In fact, using these figures, over the duration of a three year course the average student will spend £66,567, and even more if they choose to study in the capital.
The government-backed student loan system goes some way to covering some, but by no means all, of these costs. Even taking the loans and grants on offer into account, the average student will still be expected to find £7,819 to cover their yearly costs. And of course any loans have to be paid back on graduation, subject to reaching the repayment salary threshold, leaving students with a huge debt hanging over their heads as they start their working lives. And all in an economic climate where graduate salaries are falling, the cost of living continues to rise and it is increasingly difficult for young people to get on the property ladder.
In spite of all that, official figures would still seem to suggest that a university education is worth the cost. A Labour Force Study from the Department for Business, Innovation and Skills indicates that graduates are more likely to be in employment and also to earn significantly more than non-graduates. Specifically, 87.3% of young graduates are employed compared to only 62.1% of young non-graduates and the median nominal salary of working-age graduates is £31,500, compared to £20,750 for those who did not gain a first degree.
These statistics are perhaps reassuring for those considering the why of funding their child’s university education but the how remains a big and often frightening issue. Here at Infinity we want to help you give your child the advantage that is a university education without the financial pain. That is why we advise our clients to start saving for the education of their child or children as early as they possibly can. By making regular payments into an education plan over the course of your child’s life, you can build up a substantial nest egg to put towards their university education, offering them the chance of graduating without huge student loan debts to pay off when they will have so many other demands on their income. It’s truly a wonderful gift to offer your loved ones.
For more information on education savings plans get in touch today!