Newspaper article The Journal (Newcastle, England)

When You Are Saving Up for the Children You Need to Start Early

Newspaper article The Journal (Newcastle, England)

When You Are Saving Up for the Children You Need to Start Early

Article excerpt

Byline: By Nick Straker

Good financial planning is essential to safeguard your childrens' future, says Nick Straker.

Most parents will agree that it costs a great deal to bring up a child. Add education fees, pocket money, clothing and loans over many years ( and parents are required to find a substantial sum.

Many do not make provision for these costs, choosing to fund their children's lifestyles through short-term savings. However, parents are urged to reflect on the long-term future and to start making appropriate investments to safeguard their financial health.

School fees prove the greatest financial headache for those who choose private education ( estimated at around pounds 20,000 a year for boarding school fees, or pounds 6,000 a year for private day school fees.

Many parents also find they are responsible for university fees and, once the children have finished their education, help with a deposit for a house.

Covering the cost of a good education for children is a major financial hurdle. Clearly, the more time you have before fees are due, the more flexibility you will have in choosing how to finance such a major expense.

It is worth noting that school fees are increasing at an average of 10pc per year. Over the educational lifetime of a child, the investment required could equate to approximately pounds 72,000 for the privately educated day pupil and pounds 203,000 for a child at boarding school.

For parents with children at university or college there are also cost implications. For those above the Government's income threshold, it will cost a minimum of pounds 6,500 a year to cover the cost of tuition fees, accommodation and living expenses for a student.

Even then, a recent Mori poll revealed that the average student graduates with pounds 10,000 of debt. From 2006 this figure will increase if the child attends one of the universities that elects to charge top-up tuition fees of up to pounds 3,000 a year.

The key message is to take advice and start early.

Many parents choose to take out a regular savings plan, however, it is important to start contributing as early as possible. …

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