As exam results have recently been announced, your thoughts may have turned to university fees and living costs, and the need to save for your child or grandchild. But what's available to help you save for their future?
If there's a teenager in your life that's talking about going to university, you've only got a few years to save. Putting savings into a long-term savings account and watching them grow will help your child or grandchild in a few years' time.
How much will you need though?
According to Times Higher Education, English universities can charge up to a maximum of £9,250 per year for a full-time undergraduate degree, whilst institutions in Wales can charge up to £9,000 for home and Northern Irish students. However, Welsh students can apply for a fee grant to cover some of their tuition fees. This grant is currently not repayable or income-assessed.
Meanwhile, Northern Irish universities will charge up to £4,275 for home students and may charge up to £9,250 for students from elsewhere in the UK.
Scotland does not charge home fees at undergraduate level, although students from England, Wales or Northern Ireland are expected to pay up to £9,250 per year.
As the upper limit for tuition fee loans is around £9,250 per annum, and undergraduate degrees in the UK typically last for three years, the average student debt is in the region of £27,750.
So that's the course fees taken care of, but then there are living expenses.
For students living away from home, there will be items to buy such as bedding, but you'll need somewhere to put it. Times Higher Education say that in 2020, the average student rent amounted to £126 per week, or £547 a month, although students in London paid on average £182 a week, or £640 a month. This means that, based on a 39-week contract, the annual cost for students is approximately £4,914, or £7,098 in the capital. Many rents will include some utility bills, although around 33 per cent of students will pay for bills on top of their rent.
Water, gas and electric bills can total £50 per month, then there are broadband costs; although these will normally be split between the student tenants.
As such, at the end of a typical three-year undergraduate degree, the total cost for accommodation can be over £15,000, although a maintenance loan is available from the government for home students to help with living costs. Add that to the course fees and the bill comes in at £42,750, or just over £49,000 for students in London.
Additional spending comes in the form of books and university equipment, as well as travel. Students at central London universities will need to budget for London Underground, buses, trams and trains, whilst outside London and other major university cities, set aside £45 a month for a student travel card. On top of that will be the cost of food, socialising, and maybe even gym membership too.
Students may be able to borrow money to help them pay for university or fees and living costs, but when your child or grandchild reaches graduation (don't forget the cost of robe hire and photographs), there'll be a big load of debt for them to repay over the course of their working life.
Reducing the debt
You can help them. Providing a sum for them to use will reduce the amount they'll need to borrow, and therefore the debt they'll need to take on. This will help them not only at university, but also later in life when they'll have more of their salary available to save for a house deposit or holidays.
So what is available to help you save for their future?
There are different types of savings accounts available and you may want to consider Notice Accounts, Fixed Rate Cash ISAs and Fixed Rate Bonds.