Obsessed with pension planning and saving?

LL_USS

Apricota said:

It’s got to be about the balance also. I have two kids, now just at uni, expensive years still. Have the mortgage all paid off and again worked hard for that. Just keep going really. I agree ref kids and when they might need there own places, would love to be able to help. 

I plan for my kids to take max student loan and what I save for them goes into buying a place for them instead (where we are is great for university or NHS jobs but it seems they will need to live somewhere else for their future jobs). We have to borrow one way or another; both are expensive but rent/ mortgage/ housing costs we have to pay certainly, whilst student loan is to be paid back based on their work salary.

Cornish_mum

Hi LLShef,

I am USS too (as is MrCM) and we have similar aspirations to help our kids. For us because of the age of our children (and us), & our tax band we are using the USS IB for this purpose not ISAs. Basically we are making extra contributions now into the IB (for the tax and NI saving), with a plan to gift 25% of them age 58-60, to the kids when they are in there mid-20’s. To do this around the rest of our retirement planning we plan to transfer out our IB around 2-3years before our FIRE age to a SIPP. The exact plan will be made at the time depending on tax and pot sizes etc.

The kids have JISA but we only put gifts from family in there. I worry about them having access to a large sum at 18, more from a potential fraud point of view rather than irresponsibility. We also both have small S&S ISA but only direct about 10% of our monthly saving to them. 

LL_USS

@Cornish_mum

Thank you for sharing your idea. When it comes to how much we should help our children, it can raise lots of disagreement - I guess we just do what we feel appropriate in our own situation, right? I don't tend to discuss plans for kids with my friends, it is much easier to check some principles of how money works in the forum (thanks M. Lewis and the community here ).

I have been contributing volunteerly to USS Investment Builder, since 2017 only, because I hadn't known about this tactic before, and to be fair, I had had used any spare money to do up and move up on property ladder and mortgage overpayment (I am the only bread earner of the household so for peace of mind I made sure I didn't have too much debt). Volunteer contribution to IB is a great way of saving, I get that. So now I do put about 25% extra in (sometimes more), after making sure I cover other costs comfortably and have a bit in ISA too. I will wait until I know where the older child goes to uni, and if it is a place that both of my kids like to stay and look for a job, then maybe, just maybe, I will buy a flat for them as a starter in life. To do that I need money from ISAs (for liquidity I still keep as cash ISA fixed each year), sell some stuff, remortage the house (perhaps an interest only mortgage) to buy, then combine a bit of overpayment when I can and hope to pay it off with the tax free lump sum when I retire. Big plan and I don't know if it will work moneywise, but I will try and see how it goes.

SouthCoastBoy

LLShef said:

Apricota said:

It’s got to be about the balance also. I have two kids, now just at uni, expensive years still. Have the mortgage all paid off and again worked hard for that. Just keep going really. I agree ref kids and when they might need there own places, would love to be able to help. 

I plan for my kids to take max student loan and what I save for them goes into buying a place for them instead (where we are is great for university or NHS jobs but it seems they will need to live somewhere else for their future jobs). We have to borrow one way or another; both are expensive but rent/ mortgage/ housing costs we have to pay certainly, whilst student loan is to be paid back based on their work salary.

Depending where you live the max student loan may not be much, my daughter gets a touch over 4k, not sure of exact amount. Her accommodation alone is over 8k

Phossy

SouthCoastBoy said:

LLShef said:

Apricota said:

It’s got to be about the balance also. I have two kids, now just at uni, expensive years still. Have the mortgage all paid off and again worked hard for that. Just keep going really. I agree ref kids and when they might need there own places, would love to be able to help. 

I plan for my kids to take max student loan and what I save for them goes into buying a place for them instead (where we are is great for university or NHS jobs but it seems they will need to live somewhere else for their future jobs). We have to borrow one way or another; both are expensive but rent/ mortgage/ housing costs we have to pay certainly, whilst student loan is to be paid back based on their work salary.

Depending where you live the max student loan may not be much, my daughter gets a touch over 4k, not sure of exact amount. Her accommodation alone is over 8k

The 4k is not to do with where you live, that's because your household income is over a certain amount. Max loan is 9.25 k

LL_USS

thanks @SouthCoastBoy and @Phossy

I have taken that into consideration (having checked the gov website to see how much we can borrow). So borrowing max (tuition fee + any living costs allowance permitted) but I know there is a big shortfall and I will need to chip in the rest. I only said that as I have a few friends who say if I have any extra the best gift I can have is to help so kids don't need student loans. I will still let them take the loans, and use my saving to help them in a different way, that's all.

Albermarle

Phossy said:

SouthCoastBoy said:

LLShef said:

Apricota said:

It’s got to be about the balance also. I have two kids, now just at uni, expensive years still. Have the mortgage all paid off and again worked hard for that. Just keep going really. I agree ref kids and when they might need there own places, would love to be able to help. 

I plan for my kids to take max student loan and what I save for them goes into buying a place for them instead (where we are is great for university or NHS jobs but it seems they will need to live somewhere else for their future jobs). We have to borrow one way or another; both are expensive but rent/ mortgage/ housing costs we have to pay certainly, whilst student loan is to be paid back based on their work salary.

Depending where you live the max student loan may not be much, my daughter gets a touch over 4k, not sure of exact amount. Her accommodation alone is over 8k

The 4k is not to do with where you live, that's because your household income is over a certain amount. Max loan is 9.25 k

In fact the maximum for a student living away from home at a London Uni, with parental income below £25K , is £13,022.
The average loan is £6K
Each country of the UK has different rules.
Typical overall cost of living away is around £11K, so typically £5K per year extra has to be found from somewhere on average Less for some and more for others.

QrizB

Albermarle said:

Phossy said:

SouthCoastBoy said:

Depending where you live the max student loan may not be much, my daughter gets a touch over 4k, not sure of exact amount. Her accommodation alone is over 8k

The 4k is not to do with where you live, that's because your household income is over a certain amount. Max loan is 9.25 k

In fact the maximum for a student living away from home at a London Uni, with parental income below £25K , is £13,022.

Plus £9k pa for tuition fees, for families resident in England?

We're not exactly broke, but we don't have the £20k pa of spare after-tax income we'd need to prevent each of our kids taking any student loan.

Phossy

Albermarle said:

In fact the maximum for a student living away from home at a London Uni, with parental income below £25K , is £13,022.
The average loan is £6K
Each country of the UK has different rules.
Typical overall cost of living away is around £11K, so typically £5K per year extra has to be found from somewhere on average Less for some and more for others.

Can you give some more detail behind that £13K figure please. We are looking at loans now for my son and I want to make sure I haven't missed anything. I have worked on the numbers given here (outside of London) Student finance: how you're assessed and paid 2024 to 2025 - GOV.UK (www.gov.uk)

QrizB

Phossy said:

Albermarle said:

In fact the maximum for a student living away from home at a London Uni, with parental income below £25K , is £13,022.
The average loan is £6K
Each country of the UK has different rules.
Typical overall cost of living away is around £11K, so typically £5K per year extra has to be found from somewhere on average Less for some and more for others.

Can you give some more detail behind that £13K figure please. We are looking at loans now for my son and I want to make sure I haven't missed anything. I have worked on the numbers given here (outside of London) Student finance: how you're assessed and paid 2024 to 2025 - GOV.UK (www.gov.uk)

It's in section 4.8 of the document you've linked to. Max. maintenance loans are:

• Living away from home, studying outside London: £10227
• Living away from home, studying in London: £13348
• Living at home: £8610