Best way to meet children's university costs; savings/investments, salary ...?

TheTracker

Apodemus wrote: »

the first two both recently needed cars and bought old cars for cash rather than be swayed by the new car on PCP because they don't like the idea of debt. So it seems that the easy life through university hasn't clouded their judgement!

I imagine most people don’t have the choice of cash vs PCP, or no debt vs debt as you paint it. Rather more popularly for youngsters it’s a choice between trains, buses, cycling, walking, different social life, maybe even different work, plus no debt. Or debt and the rest of the added flexibility.

I’ve only ever had two car loans. I was straight out of uni the first time. I used the car to get to my awkward place of work with awkward hours but earning in the top 1% of citizens. Paid back the loan in a year. I suppose I could have taken a much less rewarding job. But I loved that debt and how I profited from it.

Second time I was in my 30s and had hundreds of thousands of pounds in savings. No point handing £20k direct to the salesman. I enjoyed the 3 year 0% PCP and stoozed on the earmarked funds c5%pa. I loved that debt and how I profited from it.

stoozie1

TheTracker wrote: »

I thank my lucky stars my parents weren’t fortunate enough to contribute a penny to my tertiary education. A good chunk of the core of myself today is a function of that. My plan is to give some minor support for the first year of university until my children find a way to support themselves. Maybe 3k.

Assuming this is aimed at my situation, I am not sure how I can do that.

Wouldn't it be like me saying to my children: 'yes you'll get £4.5k less annual loan than a student from a lower income home, but we are expecting you to entirely make up the shortfall yourself'?

stoozie1

To be clear, the £90k is just me topping up the govt. agreed shortfall in total possible loan that a non-earning parental household would have.

Alexland

The worst bit is that the numbers we are considering do not include inflation. By the time the young kids go to uni the cost of living will have gone up by around 50pc

steampowered

louloubelle79 wrote: »

I think all your children are very fortunate to have parents planning for this, myself and brother and sister had to get a job through college and uni to pay for fees and driving lessons etc. Parents wanted us to learn we had to do this ourselves. Think if you have the spare cash it's a lovely thing to do but doesn't always help them with their own financial understanding.

That logic is fine for students who come from lower income families or get the full loan. Or perhaps for older people who came up through a completely different system.

If students are getting the full loan due to family income, that is enough fine for a frugal existence.

If students are not getting the full loan due to a higher family income, the loan is often not enough to pay the rent on a bedsit (let alone living costs on top). As pointed out in Martin's article, the expectation is that parents will help.

kidmugsy

stoozie1 wrote: »

1 in 16 years ... hopefully OH could retire in 17 years.

So if that child does a job for a year between school and university - quite a good idea anyway depending on the desired degree subject - he could be funded using OH's pension TFLS.

So now there are three. The prob is that you've no idea how uni fees and maintenance will be funded then. It used to be that the interest on student loans was so trivial, and the ability to write them off so appealing, that it was more sensible to look on the loans as a not particularly onerous graduate tax rather than a loan in any conventional sense. But now? And, more important, years hence? Who knows? In your shoes I'd probably aim for flexibility.

stoozie1

Thanks @kidmugsy. That's the sort of answer I meant

Yes we could draw roughly £85k TFLS from OH's SIPP at 57 when son 3 is just about to start Uni, and then £30k when Son 4 is 1 year in, so hopefully that's a good help with those 2 costs.

Given that's quite a depletion of the pension on the children, maybe we need to focus on pension provision now, and fund sons 1 and 2 from salary. (if we can)

kidmugsy

Alexland wrote: »

where the lenders are systematically and brutally farming the young for profit.

I know, treating students as if they should be responsible for their own decisions. The horror, the horror!

kidmugsy

Joe_Bloggs wrote: »

It is never too soon to start saving for a pension !

Oh yes it is.

kidmugsy

AlanP wrote: »

they all worked during the holidays

So I should ruddy well hope. Do you mean there are some who don't?