Saving for pension vs saving for children’s uni fees or property down payment

BuildTheWall

Can people share their thoughts on how to strike a balance between saving for pension vs saving for children’s uni fees or a down payment for them buying a property?
would you maximise pension and let the child take a student loan until you retire and then you can help them repay the loan? 

Helping for property purchase might be a little easier as many parents reach retirement age (55 / 57) before children buy a property. So taking some money out of tax free lumpsum shouldn’t be a problem?
Or would you save in ISA to cover these expenses and not touch pension at all? That’s a nice one if possible, but not all can do it?

Albermarle

Regarding UNi Fees, MSE has a good guide
https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/
In short for most people it is best to take out a Student Loan for the fees and for the spending money , as it is likely it will never have to be paid back , not in full anyway .
Usually some help is still needed from parents for rent etc . and this typically will be in the range from £3k to £6K pa 
For help with a first time property purchase, they should look at opening Lifetime ISA's once they are 18 and you can give them the max £4Kpa to put in these ( if you can afford it ) https://www.moneysavingexpert.com/savings/lifetime-isas/
Although we all like to help our children , you should also make sure you have enough income in retirement , so do not be too much in a rush to take some of  your pension or reduce your contributions .
The above are just suggestions as you have not given enough info about you to say anything more specific ( age , salary, pension pot size, other savings  childrens age etc )

MallyGirl

I am having to top up daughter's maintenance loan as she only gets the minimum - it costs me £4.5k pa to make up the difference to the maximum. She is taking all the loans available as its a 6 year course so she knows she is never going to pay it all back - there is a handy calculator on here that demonstrates this.
I plan to retire at 58 and she will still have 1 more year at uni at that point. I am putting max in pension but also some in ISA - none of the income withdrawal plan is based around her. My pension is for me - well our pensions are for us might be more accurate.
I will help her where I can, and I gave her a pot of the child benefit I had saved away when she turned 18. We call it her opportunity money as it might allow her to say yes to some fab opportunity that presents - if not then it will be for a house deposit. Once we retire we might choose to give her more as a lump sum as she's an only child so it will all be hers in the end - but not if it means that we can't live our retirement life as we planned when we saved for it.

Mickey666

Right from the start, we put our child allowance into a savings account.  This, plus the ocassional gifts from friends and family added up to a little over £15k by the time junior was 18.   This paid for driving lessons, a first car and uni living costs.
In hindsight, we should have probably invested the money somewhere other than a simple savings account, but it was 'free' money and it added up to a handy windfall around uni time.

fred246

Uni fees are £9250 a year and they need about £10k a year to live. So about £80k for a four course. They are better having that money as a house deposit and paying a little bit extra income tax. (Student loan repayment)

Albermarle

fred246 said:

Uni fees are £9250 a year and they need about £10k a year to live. So about £80k for a four course. They are better having that money as a house deposit and paying a little bit extra income tax. (Student loan repayment)

You will not get £10K as a student loan for living expenses, even if your parents do not have much money . I think the max is around £7K including a free grant, or you can borrow up to a max of about £3.5K if you parents are better off .
So either the student lives at home ; works or is subsidised by family .

MallyGirl

figures are a little out. Parents have to be earning less than £25k or so for student to get the full maintenance loan which is currently £9,203k if outside London. Once parents earn over that it is a sliding scale down to £4,289 (the minimum) when household income is just over £62k. 

garmeg

MallyGirl said:

figures are a little out. Parents have to be earning less than £25k or so for student to get the full maintenance loan which is currently £9,203k if outside London. Once parents earn over that it is a sliding scale down to £4,289 (the minimum) when household income is just over £62k. 

Does the number of children affect the loan?

eg1 three children at university at the same time

eg2 three children, one at University and two still at school

This may affect my FIRE plans so would be interested to know. Assume income of £30k.

MallyGirl

There is no allowance made for the fact that you are supporting other children as far as I am aware - I don't have any others but all they ask is household income and nothing on any sort of affordability.
There is a useful table at nearly half way down this page:
https://www.savethestudent.org/student-finance/maintenance-loans.html
which shows what the student will likely get so you can work out what top up to plan for.
If it is tight then start prepping them now to not want to study in London - when my daughter was considering this I could see that she would get £5,981 maintenance loan but the uni accomodation was £10,403 self catering  Obviously there were less convenient accommodation options but still ...

garmeg

MallyGirl said:

There is no allowance made for the fact that you are supporting other children as far as I am aware - I don't have any others but all they ask is household income and nothing on any sort of affordability.
There is a useful table at nearly half way down this page:
https://www.savethestudent.org/student-finance/maintenance-loans.html
which shows what the student will likely get so you can work out what top up to plan for.
If it is tight then start prepping them now to not want to study in London - when my daughter was considering this I could see that she would get £5,981 maintenance loan but the uni accomodation was £10,403 self catering  Obviously there were less convenient accommodation options but still ...

Thanks.

I presume that income from ISAs are excluded and it is only taxable income that counts?

MallyGirl

ISAs are savings not income so they wouldn't count. It is just taxable income.
It is a good idea to think about this as early as possible. A quick look at The Student Room forum shows many threads where students cannot get the full maintenance loan but parents can't or won't top up.