Many parents, and grandparents too, make financial sacrifices to ensure that their children receive the best education. On top of that, nobody wants their children or grandchildren to leave university saddled with debt.
According to the Independent School Council Census earlier this year, a private day school now costs an average fee of £5,218 per term which equates to £15,655 per year.
The key to having more options is to start early, rather than wait until they are about to start. The good news is that the cost of education need not be a burden if you plan ahead with care.
Although interest rates are rising, a regular investment into a well-managed portfolio gives the potential for greater returns over the long term. The stock market carries investment risk, but one of our expert Investment Managers can mitigate against this by spreading your money across different asset classes, including shares, bonds and cash. Utilising ISA allowances to their maximum effect can also be advantageous, with a couple saving up to £40,000 (£20,000 each) into a Stocks and Shares ISA per year, this soon adds up.
For university funds, parents or grandparents could save up to £9,000 into a Junior ISA, per year per child. Although, it is important to remember that this money belongs to the child, so it is possible they may not choose to spend it on education once they reach 18 years of age!
Grandparents can also gift £3,000 per year under the annual ‘gift allowance’ and potentially more if the grandparent survives seven years after gifting.
However you want to contribute financially towards a child’s education, speak to your Investment Manager about how to structure the most appropriate portfolio to meet your required investment goals for the future.
Please note that EFG Harris Allday does not provide tax advice, any tax benefits will depend on your personal tax position and rules are subject to change. The value of investments can go down as well as up, and you may get back less than you invested. This article is not intended to be an offer or solicitation to buy or sell securities, nor does it constitute a personal recommendation.