Packing off your children to university may mean that you can enjoy a bit more peace and quiet at home, but it doesn't necessarily mean that the Bank of Mum and Dad can wind-down its services. In fact, research has actually found that parents may need to provide much more financial support than anticipated.
Research carried out by Experian, a global information services company, found that 79% of British parents give their children some financial support during their university education. The biggest contributions were made towards accommodation costs (57%), while travel expenses (32%), utilities (17%) and study-related costs (34%) also featured high on the list.
However, the research also found that many parents are seriously underestimating the costs of supporting their child during their time at university: parents of new-starters estimate that they will contribute around £3,700 over the three years of a university course. But parents of children who graduated in the last five years found that this figure was actually closer to £5,160 – a difference of £1,460, which is almost 40% higher than the amount estimated by parents of new students.
These costs are increased further by emergency funds. In the survey, 68% of parents reported that they had needed to give their child emergency money – an unexpected and unwelcome drain on their resources. Even parents who initially thought that they would not be providing any support at all (15% of this figure) found that they had to dip into their bank accounts to help a cash-strapped child.
Clearly, the amount of financial support a student needs is much more than many parents are budgeting for, which could put a strain on their own finances. One in two parents of former students said that they'd found their child's university education much more expensive than expected, and for some parents (29%) the costs were so high that they admitted they had endured hardships in order to provide money for their offspring.
Having a university student in the family can be a very expensive time for both students and parents. As a result, parents of new students need to prepare for unexpected costs in order to cope financially over the course of a student's university career.
Julie Doleman, managing director of Experian Consumer Services, advises: "As well as properly planning your financial contribution [and] allowing for hidden costs you may not have considered, it's wise to have a frank conversation with your child to determine what they're spending and what you can realistically help with."
Planning is clearly key. So, if your child has just started university, or they are beginning a course next year, here are some tips to help keep the Bank of Mum and Dad solvent and ready to provide the necessary loans.
Get home insurance quotes to protect your child's belongings
Find an easy access savings account
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