Most of us want the best start in life for our children, and the best possible gift one can give is that of education. Of all the benefits you can provide, none has more lasting value than a good education at a school or university, where your children will be happy and successful. Wherever you are in the world – and wherever you choose to have your children educated – the cost of both a private and a university education is a major expense and is escalating year-on-year. Therefore, planning in advance to make sure you’ve adequate funds to meet these costs makes economic sense, especially if you’ve more than one child. Making the financial arrangements today will mean that the decision whether to go on to higher education can be decided on ability, not financial standing.

The most popular countries for undergraduates to study in are the UK, USA, Australia and Canada. The current annual cost in the UK amounts to £9,000 for university fees only. But that’s not all… in addition to the cost of study, you’ve to factor in other costs such as living expenses at £6,000 and then there are books, computers and flights home etc., which can amount to a further £3,000. It’s little wonder then, that student debt in the UK in 2008 was estimated to have increased to £21.95 billion and each student on average expected to owe £20,000 when graduating. As you can see, enabling your children to realize their full potential is a very expensive business.

In the UK, boarding school fees in an elite school can cost in excess of £20,000. per year.

The estimated total expense for an international student in Canada including dormitory and cafeteria fees is CAD$20,500 per year.

In Australia an undergraduate course can cost anything from AUD$10,000 to AUD$18,000 per year.

The average cost of a four-year undergraduate course at a private college in the USA for 2009 is USD$25,143 per year – an increase of 5.9% on the previous year.

The cost of tuition and living expenses for a child attending a UK boarding school or university in the future can be calculated as follows:

• • The current age of a child in this case, say five
• • Age at which a child is to commence university education, say 18
• • Cost of university fees at today’s figures, say £9,000
• • Other Living costs, say £9,000
• • Number of years at college, say four
• • Expected annual rate of inflation, say three per cent

From the above we can calculate that total amount required would be £108,000.

Your future income can be significantly diminished by a hefty school fee commitment, which would affect your standard of living in other areas, so it makes sense to plan in advance to give you financial freedom and to provide an excellent start in life for your child. Alternatively, your children can take out a student loan, but student loans equal student debt. Would it not make better sense to start saving on a regular basis when your children or grandchildren are young, or perhaps even before they’re born? This way you can offset the costs associated with a first-class education.

The target figure of £108,000 in the above example can be met by commencing a regular savings plan today with £250 per month for a 15-year term. This assumes an average growth rate of seven per cent.

There are many education funding plans available, payable in different currencies, from international providers such as Friends Provident, Generali and Royal Skandia and quite often they’ve special incentives. These plans are very flexible, allowing parents to make withdrawals as and when monies are needed for education fees. These savings plans are very highly regarded by savers and financial consultants alike. While most providers have huge reserves and are diversified in many different countries, it’s important to realize that their international administration offices are located in tax-efficient jurisdictions like Guernsey and the Isle of Man, enabling growth to be maximised. Savers are legally and financially protected by regulations which require that assets equal to at least 90% of liabilities, are held in custodian trusteeship by an approved independent third party, with no upper limit. Regular savings also benefit from unit cost averaging, which is a very effective medium to longer term strategy. Contributions may be made monthly, quarterly, half-yearly or annually, and plans can accept additional lump sum payments as well.

An investment in your children’s future is one of the most important you’ll ever make, and as with all investments, it pays to start as soon as possible. It’s never too late to make a regular commitment to saving for a child’s education, but sacrificing today can make for a brighter future tomorrow.