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Worst delays of their lives?

It&#39s that time of year when so many schoolchildren face tests of some

kind, from the first standard assessment tests at age seven to A-levels at


For most four-year-olds starting school in September – or, more

relevantly, their parents – A-levels must seem a long way off. But this is

exactly the time when the possibilities of further education, especially

the potential costs, ought to be addressed seriously.

Last year, Family Assurance commissioned research among hundreds of

parents with children under age eight. We found that almost 90 per cent of

them expect their children to go on to university or college. Of these, 90

per cent expect that they will have to contribute to the costs.

Some parents say they are already setting aside savings for that specific

purpose but many admit that they are not yet saving at all or not saving

enough. Some of the reasons given for not saving enough, or at all, are


They include: “We haven&#39t got round to it” and “It&#39s too soon yet.” But

when does it stop being too soon?

Most of you will have ways of overcoming this sort of attitude but here&#39s

a practical approach, with realistic figures, that you might find helpful.

According to the National Union of Students, the average debt of students

leaving university in three years time is expected to exceed £10,000.

Just think what it might be in five, 10 or 15 years.

A report in the Guardian on June 6 suggested that the cost of university

fees alone could reach £50,000 in the foreseeable future but let&#39s

stick with a figure of £10,000 for now.

Look at the example of five-year-old Sam, who hasn&#39t started school yet

but who is bright and could well be university material. Sam&#39s parents are

thinking of setting aside some regular savings so they will not find

themselves in the awful position of Sam having to turn down a university

place for purely financial reasons. Of course, if Sam doesn&#39t need money

for college or university, you can bet there will be plenty of other uses

for a capital sum at that age.

If they delay saving, they will have to increase their savings

significantly to reach the same eventual sum, as the chart below shows.

These figures are examples of monthly investments needed to produce an

amount of £10,140 in 13 years time based on fund growth of 6 per cent

a year. The figures refer to the Children&#39s University Trust from Family


While a series of endowments was for many years the favoured way of

funding for further or private education, today&#39s parents may be more wary

of committing to a fixed saving for such a long period.

More flexible arrangements are proving attractive. They allow parents to

stop or suspend contributions at any time or to increase or supplement

them. Using a bare trust arrangement provides extra protection for the

child&#39s interests and offers possible tax advantages if the plan is funded

by, for example, grandparents.

Whoever does the funding, though, should be alert to the very real danger

of delay. It is those early payments which can contribute most to the fund

and, the sooner they are started, the bigger the final payout could be.


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