Financial Planning For Your Kids' University Fees - What Are Your Options?

If you have kids, it's wise to begin planning many years in advance for the cost of their further education.  And it's not just the university fees alone that you'll have to pay for; there are other items to consider, such as books, exam fees, stationery, and specialist trips and equipment.

There are a number of different savings plans that are designed to help parents fund their children's future educational aspirations.  Here's a brief overview on what's available.

School and university tuition fees savings schemes

A big advantage of using one of these schemes is that the funds raised need not go towards your child's education if there's a change of plan in the interim.  The money can be used for whatever you like.

There are a number of different school and university tuition fees savings schemes to consider.

1. Capital schemes

Capital schemes require one single payment into a Guaranteed Fund.  This means that the return on your investment is pre-determined and there's also an insurance element to provide protection for the fund in the event that you or your children die.

Schemes like these do require an early start in order to build up a reasonable balance by the maturity date, so it's a good idea to sign-up for one when your first child is born.

2. Income schemes

If you don't have a lump sum to invest, an income scheme could offer a good alternative.  You'll need to make regular annual or monthly contributions to the scheme, which will be designed to mature when the university fees become due.

These schemes are pretty flexible and can also be individually tailored to your own circumstances, but you'll still need to start one early in your child's life if it is to generate sufficient funds for their university fees.

3. Combined schemes

Combined schemes require both a single lump sum and regular payments.  They are a good idea if you don't have much capital and would prefer to supplement your investment by making large, sporadic payments over a shorter term.

4. Immediate funding schemes

These types of schemes are basically loans that allow you to spread the cost of your children's education over a number of years.  These tend to be more expensive overall than the other options.

In conclusion

When it comes to funding your child's university education there are a number of savings options that you could consider.  It's a good idea to discuss these ideas and other financial planning issues with your financial advisor who will be able to explain the full specifications of each type of scheme and recommend one that would best suit your individual circumstances.