Tips for parents

The information in this guide was last updated on 26/02/2014

When your child goes to university

Even if you have money saved up for your child’s university costs, paying tuition fees up front could be more expensive than using a student loan wisely. Your savings might be better spent on helping with accommodation or living expenses. If you're able to it may be worth setting up a weekly or monthly direct debit initially, to help your child adjust to budgeting a regular allowance (and remove the temptation to spend their entire terms budget!)

Saving for a child’s university education

Paying for your child to go to university is likely to be one of the biggest expenses you have as a parent, so it makes sense to start saving as early as you can. Setting a savings goal is a good way to keep your saving on track, but it can be difficult to know how much university will cost in 10 or 15 years. Although fees can change, the cost of accommodation and bills is more predictable, so budget for these and add an amount for fees based on current figures. Remember you’ll need to take into account inflation too.

If you have several years to save a long-term savings product like a fixed-term cash ISA may be a good choice, as you’re likely to get higher interest rates in return for locking your money away. Investments, like bonds and shares, are also an option, as they are best-suited to long-term plans. But remember, there is a risk of losing your money with any investment.

An ISA gives you protection against paying tax on any interest or capital gains up to a certain amount each year. If you’ve opened a Junior ISA for your child they may choose to use the funds to assist with the cost of going to university, but remember there’s an annual limit to how much you can pay into a Junior ISA. It is also worth bearing in mind that as the money is in your child's name, it's up to them how they spend it.