Uni fund

Fireflyaway

I'm unsure whether it's worth saving in advance for my child's potential uni fees? She is 12.
I've heard some say the debt can be crippling and to cash flow it if possible. Others say uni debt is standard these days so give the child a deposit for a home instead.

kuratowski

This far ahead, you don't need to decide exactly what you're saving for. If you have the capacity to save for your daughter's future, go ahead and do that, just set the money aside for now and you can decide precisely what to do with it when she's older.

ceb1995

If yoyr child wouldn't get the maximum maintenance loan then saving for living costs for them is helpful otherwise I m sure a deposit would be more helpful .

peachyprice

It depends how you view uni debts. If you view them as a 'crippling debt' (not sure how they can be) then yes, save for your child's fees.

If however you take the more realistic approach and view them as a tax on earnings with a finite amount that may or may not ever be paid back, then why bother scrimping now.

The reality is uni debts do not go on your credit file, , they only take a fixed amount each month, they only kick in if earning go over £25k, the repayments reduce if earnings reduce, they will expire after 30 years. They could be wiped out altogether if we have a change of government.

Have a read of Martin's guide before deciding whether it's worthwhile going without now/using savings for uni fees rather than a house deposit.

https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

Naf

Student finance is not a debt. https://wherecaniputthis.wordpress.com/2015/08/19/lets-stop-calling-student-finance-debt/

Remember that the amount of finance she gets may not cover all of her living costs, the calculations expect you to contribute based entirely on your income without any considerarion of your outgoings. If you have any other children then it also doesnt take that into account either - you'll be expected to contribute the same to each.

Spendless

No, not for the fees. Your child may never have a job where they pay it back, either any of it or all of it. It will be written off after 30 years any money owing.

Depending on the amount of maintenance loan they will receive which is based on the household income of where they live, then yes save to add to that.

My eldest is hopefully going to Uni in September and the amount of maintenance loan he will receive, at one Uni we looked at the cheapest halls of residence were 50% more than his entire loan.

ConsumerMatt

I agree with Spendless - If anything save to provide additional funding for day to day life. A lot of the time I was having to live on £25 per week after bills (with just the loan being used), so had to rely on an overdraft. Thankfully my parents gave me £100 per month. It doesn't seem like a lot but it gave me some flexibility, prevented temptation for a credit card (unfortunately many of my uni friends had one) and also meant I only had to work during the 3 month summer break rather than working late bar jobs doing the uni term.

It's a slightly skewed perspective as I went to uni 07'-10' when the fees were lower but now I pay roughly 8% of my take home monthly pay towards my student loan and only now is it noticeable but the higher pay eases the impact. When I was at the £25,000 threshold it was more like 3% and barely noticeable. I think at that level it would never be paid off.

gettingtheresometime

Will your daughter even want to go to Uni?

It isn't for everyone & the sooner we get away from this attitude of being a failure if you don't go the better

Fireflyaway

Thanks everyone. I certainly don't think that not going to uni makes someone a failure. I never went and neither did my husband.

I suppose the fact that the debt is payable as quite a small percentage and doesn't go on file is good. I can imagine saving for a deposit would be really tough though. Partly down to the sensibilities of the child. I never saved a penny when I had an income and no bills. Regret that now!

tyllwyd

Absolutely save for the future if you can, and decide closer to the time what to spend it on. Depending on your earnings, the parental contribution can be thousands per year, and even a full student loan won't necessarily cover accommodation plus living costs as things stand today. If your child is 12 now, goodness only knows what the situation will be by the time she is ready for university (or whatever else she choses to do).

sheepy21

I wouldn't save for uni, first she may never go and second it's far from crippling! You have to be earning about 25k+ and even then it's only about £55 a month. Eventually the debt is written off. I've got a huge amount of student loan, I'll probably never pay any of it back as my circumstances stand. Save for driving lessons, or a house deposit etc.