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

german_keeper

garmeg said:

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.

This is based on info from Manchester Uni circa 2013 but the chap that I dealt with at the time said Manchester wasn't unusual in this.
Manchester ran some sort of bursary type scheme where the people below the income level MallyGirl quotes for full maintenance loan were guaranteed to qualify. Then there was a finite pot to be distributed based on household income. This made sense as it wasn't until a couple of months after term started that we found out, presumably they were assessing household incomes to inform the decision. My eldest qualified for £2,000 pa based on our household income of about £38k or so.  

MallyGirl

There are a number of these schemes. The Cambridge Bursary is available to any student from a household with an income of £42,620 or less. The Bursary is tiered so that those with the lowest household income receive the maximum bursary amount (£3,500 a year).

cloud_dog

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. 

Is this based on your adjusted or sacrificed earnibgs?

zagfles

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 ...

There is an allowance for other children but not much, your assessed income is reduced by 1130.

There is also an "assessed contribution" for those on incomes over above about £42k, but not sure how it works. The document for next year is here but it's hard reading https://www.practitioners.slc.co.uk/media/1833/ssin-financial-memorandum-for-2021.pdf

zagfles

cloud_dog said:

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. 

Is this based on your adjusted or sacrificed earnibgs?

It's basically taxable pay, pension conts can be deducted. Stuff like gift aid can't.

zagfles

See also https://www.moneysavingexpert.com/students/student-loan-parental-contribution-tool/

The main site is excellent for student finance issues. There's a 45 min video with Martin that's worth watching.

[Deleted User]

personally i would let the kids worry about their own uni fees, and same for a deposit on a house, if they can't afford it they can rent.
Close the bank of mum and dad is my advice.

Mickey666

venison said:

personally i would let the kids worry about their own uni fees, and same for a deposit on a house, if they can't afford it they can rent.
Close the bank of mum and dad is my advice.

Yep, and get them out to work at 14 as well so they can pay their own way - little scroungers

fred246

I will try and clarify this by illustrating two approaches taken by myself and a friend.
My friend says students shouldn't have to take a loan. He pays for a 4 year course. Pretty normal these days. Fees are 4x£9250=£37000 and £10K a year to live. (London needs more, cheap Northern towns less). So roughly £80K. So his kids finish University with no loan but he is £80K down. He is happy they have no loan but has nagging doubts whether he has done the right thing. His kids will be happy not to pay 9% extra income tax but will have to save for a house deposit.
My kids maxed out on loans. Took the maximum they could get. They are good money savers so dad overdoes their funding. So they come out of university and if they can get a job then have a good deposit for a house and can get on with life as their parents did. No 'first house at 40' business. All they have to do is pay 9% extra 'income tax'. This will carry on for the next 30 years. Their dad will continue to give them money as long as he can afford it.
The problem is that people think LOAN. Borrow less=good. But it's not a normal loan. If you paid half of it to reduce the loan you would still pay 9% extra income tax and probably never pay it off. So you need to choose either option. Don't take out the minimum loan.

fred246

I know someone who inherited £200K from their grandparents at the age of 18. They consulted an IFA over university funding (Not that I trust IFAs anyway). They were told to keep the cash and take the maximum student loan rather than pay for university themselves.