Agood education is an investment for the future and most parents want the best start in life for their child and what more lasting benefit could a parent provide, than a good education.
As an expat worker or internationally minded professional, it may well be that you yourself received a good education and attended an international university, or you may like many parents, simply feel it is your duty to provide the best education money can buy for your children.
Whatever the reason, in today’s increasingly competitive world where higher education is seen as the key to success, it is natural that we should want our children to achieve excellence.
Whether this is the case or not, one thing that most parents can agree on is that the long term value of a good education far outweighs the costs involved.
Although a quality education can open doors for your children, the cost of providing such an education is continually increasing, and therefore saving for your children’s education requires a long-term plan, with the consequence of not planning usually resulting in significantly diminished net disposable income and all too often the inability to pay fees when they arise.
Many internationally minded parents do not realise the true cost of higher education, and many expatriate parents do not or realise that their children are likely to be treated the same as foreign students when it comes to school or university fees.
Jack is currently 6 years old and wants to be a doctor. His sister Jill is 3 years old and wants to be an actress. Their parents live in Spain and want to send Jack to Oxford University to study Medicine and Jill to Manchester Metropolitan University to study Drama.
Since both parents are EU citizens and live in the EU, they benefit from Home and EU Fees, which means that Jack’s 4 year degree tuition will cost £9,000 per year plus living costs of £13,000 per year (living costs estimate provided by Oxford University), which is a total of £88,000 for Jack, and Jill’s 3 year degree will cost £9,000 per year plus living costs of £13,000, making a total of £66,000 for Jill.
The good news for Jack and Jill’s parents is that they have 12 years to save for Jack, and 15 years to save for Jill.
The bad news is that university fees escalate each year, and although some Universities publish fee increases between 3-5% each year, university fees have increased by approximately 7.5% per annum since 1987.
Taking into consideration an assumed 5% university fee inflation, Jack and Jill’s parents need to plan and save £116,652 for Jack and £95,130 for Jill.
If Jack and Jill’s parents do nothing, they will either need to fund these costs from savings or income at the time, or Jack and Jill may not receive the education their parents wish for them.
If Jack and Jill’s parents start an education plan today, and commit just £550 per month for Jack and £350 per month for Jill, and their savings plan grows by 6% per year, then Jack and Jill’s higher education costs will be fully met.
Delaying making provisions for Education Fee Planning not only affects your child's future but also your own standard of living. It is therefore crucial to ensure that you have a plan in place to meet these obligations when they arise. It may be that the best time to start saving has already passed, and if this is the case it is even more important that you start saving now.
"Whatever you can do - or dream you can, begin it. Boldness has genius, power and magic in it." Johann Wolfgang von Goethe
To help you meet these costs, Sentinel offers flexible Savings Plans and Education Trust Plans that allow you to make regular payments to accumulate capital in order to meet your obligations, with the flexibility of taking regular withdrawals to coincide with university or school terms, or quarterly, annual or ad-hoc withdrawals as necessary.