Did you retire early before kids went to Uni? How expensive was it?

cfw1994

My "stepping away" rolled up with our offspring pretty well finishing.   I nearly ducked away last year, but Covid kept me at the grindstone (well, zooming desk mostly!).
In some ways, I kind of wanted ours to see a 'conclusion' to my work as they started theirs: perhaps 'happy coincidence' as it turns out - hard to predict this stuff, but I wanted us to be free to help them out as they start off their post-studies life.  It somehow felt wrong (to me!) for them to see me 'quitting' sooner.   Just a very personal viewpoint, I appreciate we are all very different.

Daughter has a decent job now, son completing his Masters in an interesting area for work prospects, so not quite there, but close.
As others have also suggested, we essentially paid around £5-6k pa whilst they were(are) studying.   We also still took them on some holidays - I feel like they value their parents a lot now, we enjoy their company, and I look forward to taking them on some in the future, work permitting!
Their loans (tuition and the maintenance) are essentially a "graduate tax".  Again, most will never repay them, & if they do, then they have earned very well.   I don't see any point trying to help pay them off early for them: I'd rather get any spare cash we could use for that to help them towards their first home, or car, etc.

Good luck - it is a proper juggling act, this life thing, eh!!

ratechaser

Useful discussion - my two are 15 and 17 so Uni is top of mind at the moment. They both have more than enough money coming to them when they are 18 to pay for everything, even if they were doing something crazy long like medicine (and the older one certainly isn't).

Decision point for us is whether we just pay for them or do some sort of split. On the one hand it could be a good early estate planning exercise - it's not going to affect our lifestyle - but on the other hand it's important that they understand the expense and take some responsibility. As the elder one already has a p/t job, I'm not overly concerned there either, we've tried to avoid raising entitled spoilt brats... but I still think there's a way to go in terms of them truly understanding the value of money because they've been fully provided for all their lives.

So I suspect the way we'll go is to pay tuition and accommodation, and they can then fund their lifestyle themselves. They'll only get the minimum loan so will hopefully encourage them to work and be reasonably frugal.

And of course I'll be fully expecting weekend visits for treats and washing. Because I'm an indulgent old softie and they are my babies... They've already said they'd like to keep coming on 'nice' holidays with us for a while - let's see how long that lasts  

Albermarle

They'll only get the minimum loan so will hopefully encourage them to work and be reasonably frugal.

If the accommodation is paid for , they should be able to manage on the minimum loan , especially if you help out a bit with shopping trips, free holidays etc.

The students who have to work are usually those from less well off families . Although they get a bigger loan/grant it is still nowhere near adequate, and if the parents are unable to help then the gap has to be filled somehow. The alternative is to live at home and commute to local Uni.

SouthCoastBoy

I have two children at uni, both in expensive cities, as others do I pay for the accommodation (about 17k per annum) and they live off the maintenance loan, which is the minimum amount.

fred246

The bit that people don't seem to understand is that whatever you borrow the repayments will be the same. At least for the first 20 years anyway. So it seems sensible to either borrow nothing and have no repayments or borrow the maximum. It's not a normal loan. Borrowing less isn't necessarily clever.

Alexland

cfw1994 said:

In some ways, I kind of wanted ours to see a 'conclusion' to my work as they started theirs: perhaps 'happy coincidence' as it turns out - hard to predict this stuff, but I wanted us to be free to help them out as they start off their post-studies life.  It somehow felt wrong (to me!) for them to see me 'quitting' sooner.   Just a very personal viewpoint, I appreciate we are all very different.

I feel the same it would have been nice for my kids to stat work while they were still seeing me work (we're all in this together..) but then if we can get to a position to retire a decade earlier while still making reasonable provision to help them with university and house deposits then it does seem wasteful to keep going to work for show. Maybe we could be that person that pretends to go to work only to sit on a park bench all day?

However the danger is that a lot can change during an early retirement and if the university finances become more onerous or their house deposit help needs to be greater than expected then it would feel bad to say 'this is all the money I have to help you, sorry I retired early and it's now too late to make it up'.

jennystarpepper

ratechaser said:

Useful discussion - my two are 15 and 17 so Uni is top of mind at the moment. They both have more than enough money coming to them when they are 18 to pay for everything, even if they were doing something crazy long like medicine (and the older one certainly isn't).

Decision point for us is whether we just pay for them or do some sort of split. On the one hand it could be a good early estate planning exercise - it's not going to affect our lifestyle - but on the other hand it's important that they understand the expense and take some responsibility. As the elder one already has a p/t job, I'm not overly concerned there either, we've tried to avoid raising entitled spoilt brats... but I still think there's a way to go in terms of them truly understanding the value of money because they've been fully provided for all their lives.

I encouraged my step children to get part time work and save for uni.  I did tell them that they need to be able to pay their own way for luxuries such as holidays, expensive clothes and phones.  

I just wonder how many other parents do or don't encourage their children to do this? 

jamesmorgan

I retired early 50's before my 4 children went to uni.  As I was living off savings (low official income) they all were eligible for maximum student loan for maintenance.  This is around £9K and all my children found it enough to live on at uni (none went to London or SE Uni's though).  My view is that, as the majority of students never pay off the loan fully, it is more sensible to take out the maximum loan than contibuting to living costs and taking out a smaller loan.  If you wanted to avoid them having student loan repayments it is still typically better for them to take out the loan and for you to make the loan repayments as and when they fall due rather than pay up front.  The best way to think of it is simply a graduate tax, which now we are out of the EU may be what it ends up being.  My only costs incured whilst they werre at uni were their living costs during holidays at home (which at around 20 weeks of the year is not insignificant).

As for whether students are likely to pay off their loans, it depends more on the type of job they do rather than the type of degree.  The current threshold before they pay anything back is approaching £27K.  In many professions, salaries are quite a lot lower than that so nothing gets paid back until they get into more senior roles. The average graduate starting salary is currently £23K.  Even with a maths degree, average starting salary is lower than £27K.  City finance jobs are obviously higher.

Croeso69

jamesmorgan said:

I retired early 50's before my 4 children went to uni.  As I was living off savings (low official income) they all were eligible for maximum student loan for maintenance.  This is around £9K and all my children found it enough to live on at uni (none went to London or SE Uni's though).  My view is that, as the majority of students never pay off the loan fully, it is more sensible to take out the maximum loan than contibuting to living costs and taking out a smaller loan.  If you wanted to avoid them having student loan repayments it is still typically better for them to take out the loan and for you to make the loan repayments as and when they fall due rather than pay up front.  The best way to think of it is simply a graduate tax, which now we are out of the EU may be what it ends up being.  My only costs incured whilst they werre at uni were their living costs during holidays at home (which at around 20 weeks of the year is not insignificant).

As for whether students are likely to pay off their loans, it depends more on the type of job they do rather than the type of degree.  The current threshold before they pay anything back is approaching £27K.  In many professions, salaries are quite a lot lower than that so nothing gets paid back until they get into more senior roles. The average graduate starting salary is currently £23K.  Even with a maths degree, average starting salary is lower than £27K.  City finance jobs are obviously higher.

What is the current threshold for parental income such that a child qualifies for the full loan?

Presumably tax credits and child benefit for other children are ignored?

Is there an allowance if you have other children still at school so the allowable income is higher?

My eldest is in year 11 so would be going to Uni in September 2023 if he wishes. Presumably the assessed tax year would be 2022/2023?

Still working but thinking about retiring early soon, age 57.

I can drain an ISA and spend some PCLS on top of taxable income if the income for a full loan is too low.

ratechaser

jennystarpepper said:

ratechaser said:

Useful discussion - my two are 15 and 17 so Uni is top of mind at the moment. They both have more than enough money coming to them when they are 18 to pay for everything, even if they were doing something crazy long like medicine (and the older one certainly isn't).

Decision point for us is whether we just pay for them or do some sort of split. On the one hand it could be a good early estate planning exercise - it's not going to affect our lifestyle - but on the other hand it's important that they understand the expense and take some responsibility. As the elder one already has a p/t job, I'm not overly concerned there either, we've tried to avoid raising entitled spoilt brats... but I still think there's a way to go in terms of them truly understanding the value of money because they've been fully provided for all their lives.

I encouraged my step children to get part time work and save for uni.  I did tell them that they need to be able to pay their own way for luxuries such as holidays, expensive clothes and phones.  

I just wonder how many other parents do or don't encourage their children to do this? 

It's a delicate balance and a very personal decision. We encouraged our elder daughter to get a job because it would teach her a thing or two about the real world outside of the comfortable middle class enclave she's been used to. Customer service roles are a real eye opener for a teenager - and it's worked. As for the fiscal responsibility aspect, I'm on the fence - she rarely bothers to check she's been paid because it's all just going into an account that she doesn't touch. So good she's not spending but still some work to do in terms of the value of money. On balance I'm glad she seems to be naturally frugal.

As for holidays, I think Mrs RC wouldn't dream of making them pay for any holidays that they still wanted to come on with us - think there's an aspect of not wanting to let go there! I may have to put my foot down if they start wanting to bring partners with them though...

Anyway, interesting to know that the minimum loan should be enough for basic living costs. As I said, they can get jobs if they want more. And if they put the effort in at Uni, we'll probably pay it all off for them, just not going to let them know upfront!