Tax- efficient parental Uni contributions

lifebegins

As part of a general overhaul of our finances, I have realised that a huge amount of our monthly outgoings are the parental contributions we pay to our two older children at Uni which are from our net monthly income. Is there a more tax-efficient way of doing this? We are paying £9000 net to them in total which is probably around £15,000 per year gross and is frankly a big struggle.

(It really annoyed me that Martin Lewis naively touted the "anyone can go to Uni " thing when fees came out as our 2 kids plainly couldn't have gone without our very significant contributions, particularly as they are both on long courses with much shorter holidays than usual courses and can only work for a 4-6 weeks in Summer).

They get full tuition fee loans but minimum maintenance loans to live off (they are both at Uni away from home) as our household income is over the 62K threshold.

We make up the difference between what they get in their student loan and what they would be entitled to if they got the full student loan (ie if we earned under 25K) which works out at approx. £4500 per child per year.

I vaguely remember years ago that you could do a covenant or something.
We have another child who will go in a couple of years so will have 3 at Uni at the same time :eek:

How can we reduce this burden? Any suggestions or good websites/ books anyone has used? Thanks!

Apodemus

I know what you mean about the costs but I've not seen any suggestions of any tax efficient ways around this.

It bemuses me why we now offer salary sacrifice schemes for things as banal as an iPhone but not for the next generation's university fees!

booksurr

OP may have benefited from a covenant themselves when they were at uni but the ability to create covenants for such purpose ceased in about 1988 or thereabouts.

there is no tax efficient way to fund your children solely because they are at uni

xylophone

The youngest has a CTF/JISA?

If a CTF, you might convert to JISA (Coventry offers 3.25%), pay in as much as you can afford up to the subscription limit and encourage the child/grandparents/aunties etc to contribute...

This might ease the burden when the child gets to university.

SuperHan

lifebegins wrote: »

(It really annoyed me that Martin Lewis naively touted the "anyone can go to Uni " thing when fees came out as our 2 kids plainly couldn't have gone without our very significant contributions, particularly as they are both on long courses with much shorter holidays than usual courses and can only work for a 4-6 weeks in Summer).

Martin also writes a lot about parental contributions. Every one CAN go to Uni - more "wealthy" families can subsidise, and less "wealthy" families get additional loans.

However, there's not much more you can do from a tax efficient perspective.

If you own your own business you could make the children shareholders and pay £5k of dividends tax free... But other than that, there's not a whole lot to do.

(and as an aside - they are stopping salary sacrifice for things like iPhones, so the chance of anything being added in for children's education is low)

Keep_pedalling

Considering it as part of your IHT planning might make you feel a little better.

Spidernick

xylophone wrote: »

The youngest has a CTF/JISA?

If a CTF, you might convert to JISA (Coventry offers 3.25%), pay in as much as you can afford up to the subscription limit and encourage the child/grandparents/aunties etc to contribute...

This might ease the burden when the child gets to university.

This is the issue: the tax planning has to come BEFORE the child goes to university.

I do understand the OP's plight: we are considered 'wealthy' for the purposes of student loans and have twins, so if they both want to go to university at the same time it could prove interesting to say the least. Saying that, having done a degree myself as a mature student after having worked, I would say that the demands of the average degree mean that it should be relatively easy to fit a part-time job around studying, if they can get one, and so self-fund their studies to a certain extent.