providing for kids for uni

hairymary_2

Hope that you guys can help.


I am in the process of getting divorced and its all a bit fraught. We have 3 kids and they will all likely go to uni.


My solicitor (for various reasons) has suggested that both we set up funds which will provide for the kids at uni. How much we each contribute etc will be up for discussion but I would appreciate advise on the best financial way to do this considering each of the kids ages and needs


Eldest goes next year for 4 years.
2nd goes year after (possibly for 4 years)
3rd child is currently 11 years old so a bit of time here.


We both earn well and so they will get minimal grants, however I do not have lots of spare cash sloshing about.


Thanks for the help

RickyC_IFSWP

Hi hairymary, welcome to the forum.

If I'm honest, the planning for uni fees should have started a while ago. If it's saving regularly only with no lump sums available, you're restricted to simple regular savings/deposit based accounts for your eldest two kids. There is, however, more flexibility and prospect for growth for the youngest as he's still at least 7 years away from uni though - so a tax efficient investment, such as an ISA, would work.

It would be useful to think about how much money you'll need to save up, including for accommodation costs, books, inflation etc.

PeacefulWaters

Student Loan should cover fees and accommodation. Usually nothing else. Numbers below assume no accommodation shortfall.

Food, clothes, transport and books are the issue. The student could work part time. Family could contribute.

How much do you need isn't a perfect formula. There are many variables such as distance from home and college and also specific costs for a particular course. I'd suggest c£40 a week should cover it for essentials plus £500 for up front costs (kettle, toaster, microwave etc). £8,500 per student per four year course.

If they want to drink themselves into a student stupour several times a week I'd take the view that the can earn that money for themselves.

£17,000 needed over the next six years = £240 a month between you if you start saving now. Remember to increase this by an amount for inflation each year.

£8,500 over the following five years would be £142 a month (plus increases for inflation) starting in six years. Or start immediately at £120 a month for the next six years.

Increase pro-rata if you disagree with my £40pw figure and think it should be more.

See the links at the top of this page for suitable accounts.

Monthly savers, high interest current accounts and cash ISAs are the most likely homes to choose. You might want to consider stocks and shares ISA for the youngest's fund if you are able to start saving for him immediately. But lower risk funds.

kidmugsy

The student loan system is a nightmare in the US: here it's much less of a prob according to M Lewis.
http://blog.moneysavingexpert.com/2012/09/20/student-loans-arent-a-debt-change-the-name-to-avert-a-national-tragedy/?_ga=1.249369031.1730768536.1397074233

http://www.moneysavingexpert.com/students/should-i-get-student-loan

http://www.moneysavingexpert.com/students/student-loans-guide


The amount of money that your children will need from you is fairly modest.
http://www.moneysavingexpert.com/news/loans/2013/09/student-loans-are-not-big-enough


Another possibility is for a child to take a gap year and spend it earning like mad instead of travelling around the globe, spending like mad and patronising third-worlders.

hairymary_2

thanks guys


I have an idea of figures and how much will cost and how much grant they will get - a bit but not much.
When together we would have afforded it from our joint income and paid it as we went along, so we didn't plan as we didn't need to. Unfortunately with the divorce things are not as planned.


So given one is going next year for 4 years and I think they will need about 15K over the 4 years
and then the next one goes oct 2016 and will need to plan for 12K
and then we have time for the last one - who it sounds like ?NISA


I suppose I am wondering for the older 2 what options are there that both I and their Dad can pay into which will secure things for them

hairymary_2

and yes they will work as much as they can but that isn't guaranteed and when I am face to face with their Dad and his solicitor I need to be able to talk about financial vehicles that we can pay into


hope that explains it better


thank you

kidmugsy

My daughter did a stint of working three different jobs for many months after she left school. (Day job, early evening job, late evening job). By golly she piled up the money, not least because she had no time to spend it.

collingbone614

See if they can get any type of scholarship to ease the burden. I.e. if they have strong grades, it is worth looking around - contact the uni they want to go to and see if they can provide any information. Different kinds of scholarships are available from sources other than the unis themselves.

Also consider the course they are going on. E.g. If they want to study "something relating to biology or health" then how about encouraging them towards something more specific - like nursing? There is a grant for that, meaning a sizeable part of the cost may be covered. Or if they have an interest in sound and language - how about speech therapy? Again, the state pays a grant for this course. I realise these are very specific course choices, which would set them up to take a specific career path - however this is the point.

Just thoughts - they may already have a strong idea of what they want. But if they don't, you could try and build in a bit of focus.

atush

I stated saving when my eldest was 5 and the twins were still in nappies. But you can do it.

Fir the 11 yr old, Iw ould consider drip feeding into an investment trust savings plan (this is what I did and I mainly used Witan) Could be in joint names with a designation, or one name and designated. Then both could pay in a set amt per month.

Then set up cash regular savers for the older two, as many as you can afford. For these two you will have to save as well as cash in each yr for the 4 years. When one finishes, you can add what you were putting for child 1 into child 2's savers. then what you were paying for child 2 into child 3's plan.

This way of snowballing means you can initially save less for child 3 to begin with while you are playing catch up with the other 2.

xylophone

Do you intend to save in the children's own names or in your own names with a view to having the money to support them through university?

Do you intend to use CTF/JISA? Remember that CTF will be transferable to JISA from April 6 next year. https://www.gov.uk/child-trust-funds/overview

The highest paying cash JISA (4%) is currently offered by Halifax.

http://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/