September and October can be a painful time for parents watching their children head of to university for the first time.
Emotionally painful, because leaving a son or daughter in halls and driving off knowing they are not going to be at home for a while tugs at the heart strings. Tough it out though and the tidiness and calm at home can quickly compensate for “the big goodbye”.
Financially painful because it’s very expensive. Yes, there’s the student loan and yes the student should probably take it – consider the loan as deferred contingent taxation payable (at 9%) on each £1 earned over £21,000 and it doesn’t seem so bad. Martin Lewis even suggests renaming the student loan as a student “contribution” to remove the stigma.
But, whatever you call the arrangement, you might not want your kid creating a £50,000 debt and, whether you like it or not, you will probably need to chip in anyway as the amount they are able to draw is unlikely to cover everything. It can all come as a bit of a shock if, like most, you haven’t planned for it.
But what if you did think in advance? What if you put in place a programme of saving regularly that gave you a really good chance of accumulating a sum sufficient to ensure that at least you (and maybe even your children) could save the financial pain associated with higher education? Like most things, the earlier you start the easier, over time, the challenge becomes.
And with the benefit of advice, it’s possible to achieve this worthwhile goal in a way that allows you to retain control and also to ensure that as little as possible – possibly nothing – is lost in tax.
Now that doesn’t seem so bad!
