Parents urged to be studious with investments
JUNE 1ST, 2010 By DOMINIC
It has been over 20 years since I have had to burn the midnight oil to cram in last minute exam revision and experience the anxiety of knowing you’re not fully prepared for the onslaught of exams. For anyone remotely studious – and even if you weren’t, they were stomach knotting days. I don’t envy teenagers who are in the midst of their exams and I certainly don’t envy parents who are feeling more than a little queasy at the thought of the eye watering higher education costs which lie ahead.
Last week alone the Russell Group who represents 20 leading universities submitted proposals to scrap the £3,225 cap on tuition fees in favour of a system of unregulated charges which suggested annual fees could soon reach as high as £9,000. One proposal said that wealthier students would be exempt from student loans and would have to take out more expensive bank loans – secured against their parent’s homes.
I did a quick straw poll in the office and asked colleagues with primary school age and teenage children if they’d made any kind of financial provision for their children’s higher education costs. All said they were hopeful that their off spring would go to university but admitted they’d set aside no investments specifically to cover further education costs. When I questioned why, it was simply a case of having more pressing financial priorities and they were hopeful policies taken out by grandparents when their children were born would ‘come good’. Though they admitted it would probably only cover the first year’s fees (as they currently stand) and in reality this sum of money would probably go towards their child’s first car.
Regardless of financial status times are tough; with unprecedented volatility in the market and a budget looming which I am sure will squeeze us all one way or another and not just for the short term. I can’t stress enough that it’s never too late to start planning – even if it’s a relatively small amount you set aside during lean times, you’ll see the fiscal benefit in the long run.
Here are some investment options which would serve the purpose well:
• Utilise tax free Child Trust Funds (CTF) – the investment as opposed to cash saving. The maximum
annual investment is £1,200 per child.
• For children born before the date of the CTF launch – set up a tax free ISA and designate it for your
child’s education.
• Ask your financial planner about trust funds.
• A good long term strategy is to take advantage of the low stock market and invest in shares.
• Property investment in a university town/city
Please do your homework and mention it to your financial adviser at your next meeting.
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By Julian Lowe, June 1, 2010 @ 4:08 pm
CTF – Check
Grandparents – Check
Hoping child will use these towards an education. Thats a tough call.
Given the fact that peope are talking about £9000 per year for fees, we will have to seriously consider putting something else away for the future. Just in case junior decides to have an almighty blow out at the age of 18.
We will certainly be looking for some other form on investment from now on.