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Grandparents funding costly university fees

Grandparents funding costly university fees

Category: Savings

Updated: 28/02/2014
First Published: 28/02/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Gone are the days when a visit to granny and grandpa involved a treat of an ice cream, or at most a new pair of shoes, today the elder generations are funding their grandchildren's education.

Around 46% of grandparents are planning to give money to help fund their grandchildren's university fees, according to a study by Investec Wealth & Investment.

With the cost of living and rent expenses drastically adding to the overall price of going to university, it seems grandparents are coming to the rescue in this area too with 44% planning to help with these overheads.

Going to university may be a long-term investment, helping with career prospects later on, but that still doesn't help with the fact that a typical undergraduate can expect to pay over £66,000 for a three year university course.

With almost three-quarters of universities in England planning to charge the maximum £9,000 tuition fee for some or all of their courses, The National Union of Students (NUS) has estimated that people who live and study in England, outside of London, should expect their total expenditure (fees, rent and living costs) to be £22,189 per academic year.

Chris Aitken of Investec Wealth & Investment, said: "Ballooning university fees have brought grandparents into the financial mix as never before. We find that grandparents with a number of grandchildren are often faced with a tough choice as to whether to subsidise higher education costs or their first home.

"Unless they're very well off it can be very difficult to do both. Baby boomer grandparents may be asset rich compared to their children and grandchildren but they have to be realistic about how far their generosity can spread while they are still alive."

Retirement should be a time when pensioners are thinking about enjoying their earnings, perhaps taking that holiday of a life-time or a cruise, but selfless grandparents are thinking of the family instead with 43% planning to put aside long-term savings and investment plans for their grandchildren.

If you have young grandchildren, putting aside a little often, and beginning early on in their lives, can be a good way of getting a nest egg in place for them by the time they are thinking of going to university. It can be tempting to lavish the young ones with gifts, but thinking about their academic future could be a much better investment. Why not take a look at some junior ISAs and investment accounts and help them along the way to a good university education.

Starting early can amass a pretty little sum without having to impede your own financial security later on. Many grandparents are finding they are having to compromise their own living standards with around 39% planning to help their grandchildren by taking money out of their own salary, while a further 4% are considering going as far as remortgaging their property.

Good family values are something that can't be bought, but grandparents need to be careful that they consider their own lives in retirement as well as selflessly helping their grandchildren. Take are look at the saving and investment accounts available for children and you can put a little away for your loved ones as well as instilling a good savings attitude in the younger generation.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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