By Ashley Jones
It won’t surprise you to hear that planning for University fees or further education is a topic that commonly concerns clients. It can and often is a key influence on financial plans. This is especially true for those who have lived overseas for a substantial period and face the potential reality of their children having international fee status.
Here are some top tips we have gathered from a few conversations with clients over the years:
1. Plan and start early: This is unsurprisingly the first tip to success with most aspects of financial planning. If you have more time to save you will potentially not need to save as much at a time and investment risk has time to even out.
2. Involve the Grandparents: In our experience Grandparents love helping their Grandchildren with the added benefit that ‘genuine’ gifts can reduce potential exposure to Inheritance Tax.
3. Pay tuition fees upfront: This isn’t always possible but it is worthwhile inquiring as you reduce exposure to future cost increases.
4. Understand the tax implications: There is little point having a great plan when you end up paying high levels of tax. Seek professional advice for the relevant tax jurisdictions and request guidance from a professional who can help you navigate the different nuances.
5. Invest prudently: The market is awash with complex investments purporting to meet your “University fee based objectives.” In reality it doesn’t need to be complex. A simple investment account with no exit costs is likely to be the most appropriate option if you are comfortable with investment risk. Illiquid, high-cost investments are unsuitable and should be avoided. They will only reduce the prospect of meeting objectives with the added downside of penalties if your plans change and you need to access capital sooner than expected.
6. Consider bursaries, scholarships and alternative support: This is an extensive area of advice which varies from region to region. For example, Welsh students may be able to access funding from the Welsh Government which will help to reduce their fees.
7. Utilise tuition fee and maintenance loans: These are not free sums of money and will need to be repaid but can be a cost-effective option.
8. Keep evidence of your connections with the UK: If your child (and we assume you) has lived overseas for some time, there is no guarantee of securing home fee status in a UK university. There are no hard and fast rules and each university is left to make their own decision but if you have maintained ties with the UK, providing evidence of this could be key. For example, frequent family trips to the UK each year (flight tickets), National Insurance Number, UK provisional driving license and a family home in the UK amongst other points will support your child’s claim.
If you start planning early, and you have a clearly defined investment approach, it’s easy to track how you are doing. While the cost of university education can feel like a moving target, having a clear idea of your number, and regularly reviewing how your plans are performing will help to keep you on track.
Whilst planning for university, fees can seem a daunting task. Remember that giving the gift of education is priceless, and investing time planning for it may be the best investment you ever make.