Best way to save for kids uni costs?!

22225

Please can I have some guidance.

Got 3 kids between ages of 3 and 8 so I have 10 years approx before they start going off to uni. I suppose they will get loans for the fees and maintenance loans, but according to Martin I will have to give them about £5k per year each to live off.

What's the best way to raise this money?! I have an occupational pension, small LISA but I wont be able to touch those for another 17 years.

Should I put money into a stocks and shares isa and hope it grows?!

I am also trying to put a little money away to pay down mortgage debt as that has another 33 years to go and in 7 years my fix comes to an end...

What should I prioritise in your opinion?!

Didnt think about uni costs until the other day...

daveyjp

Firstly, don't assume they will go to uni, they may not want to!  However an 18 year old will need cash for something so its worth doing what you can now.

Long term investment is likely to give better returns than just putting money into a savings account, so a junior S&S ISA for each child makes sense.  

22225

Yes I know about JISA but I dont want them to have access to it when they are 18.

Floyd_Pink

With 10 years open a S&S ISA investing into a global tracker (Vanguard are good for ease of use and low fees). Keep the ISA in your name then you get to decide if and when they get any funds.

ShinyStarlight1

22225 said:

Yes I know about JISA but I dont want them to have access to it when they are 18.

I feel the same about my grandson’s access to the money I’m saving for him. I plan for him to have access to it when he’s 25 and his brain is fully adult!

What I have done is invest in a fund which is included in my S&S ISA. It reduces what I can put in my ISA for myself but hey ho 😊.

This may not be the most sensible idea but, like you, I want his access to it to be when he’s a little maturer.

22225

Thank you. 
Which vanguard global tracker would anyone recommend? I already have their lifestrategy 100 equity accumulation in my LISA so I know about that one. I'm put off bonds due to what's happened in the last few years. I'm also totally confused with ETFs and them not being covered with financial services protection or something like that?? Should I just do lifestrategy 100 with vanguard platform or is there one I'm missing? Thanks all.

Dorian1958

Well done for planning ahead.  I can only relate my experience with having had 3 children at university for varying lengths continuously from 2010 until 2024, with the last about to submit her dissertation!  Fortunately their fees were paid by the Scottish Government, which left me to support them for accommodation (typically averaging £5K per annum, increasingly expensive in St Andrews). They paid their other living expenses from student loans/part time jobs and top ups from bank of mum and dad. With prudent living their loans averaged about £10K each at the end of their 4/5 year degree/PhD.  I had 3 separate pots each with varying amounts saved per month, as the time lengths varied depending upon the estimated year each would start university.  Also, I didn't need all of the money for each child right at the beginning of their uni entry.   I didn't have enough time at the beginning of this plan to trust stock market investments, so I just saved in fixed rate bonds; obviously you have more time, especially with the 3 year old.  At the risk of sounding obvious, but £5K now might be closer to £7/8K p.a when the 10 year olds starts and £10K p.a. for the 3 year old.  So, I took their age from 22 (typical age of 4 yr degree graduate in Scotland), say 19 years for my 3 year old, and divided £5K by 19 years to work out a monthly amount needed to save throughout their time at uni, increasing with inflation.  If you followed this plan clearly your 10 year old would need a different, larger, monthly amount as you have less time, and the middle child somewhere in between.  Do your own sums. Life and money is a balance.  Over saving in the 3 pots initially might seem feasible, but not if you have to, or are tempted, to dip into them for unexpected bills later on.  However, by "oversaving" you would benefit from compounding.  On the other hand, you might have more free income later on, with promotion/salary increases, less mortgage etc.  Pros and cons.  Only you can decide what is best for you in your circumstances.  And if they don't go to uni, well then you've got a nice little pot to help with giving them a good start to their working life, car, help with house deposit etc.  Good luck.

22225

Thank you everyone x

Albermarle

22225 said:

Thank you. 
Which vanguard global tracker would anyone recommend? I already have their lifestrategy 100 equity accumulation in my LISA so I know about that one. I'm put off bonds due to what's happened in the last few years. I'm also totally confused with ETFs and them not being covered with financial services protection or something like that?? Should I just do lifestrategy 100 with vanguard platform or is there one I'm missing? Thanks all.

Lifestrategy 100 has a higher UK element than other 100% global equity funds, so it has performed worse in recent years. The future is unknown of course .
There are many providers of 100% equity trackers other than Vanguard.

22225

Albermarle said:

22225 said:

Thank you. 
Which vanguard global tracker would anyone recommend? I already have their lifestrategy 100 equity accumulation in my LISA so I know about that one. I'm put off bonds due to what's happened in the last few years. I'm also totally confused with ETFs and them not being covered with financial services protection or something like that?? Should I just do lifestrategy 100 with vanguard platform or is there one I'm missing? Thanks all.

Lifestrategy 100 has a higher UK element than other 100% global equity funds, so it has performed worse in recent years. The future is unknown of course .
There are many providers of 100% equity trackers other than Vanguard.

Hi yes that's true but to keep costs down I wanted to use Vanguard. I also have hsbc global strategy adventurous in my LISA but if I go for that a j bell and hargreaves lansdowne are more expensive platforms to use arent they? I'm a bit scared of having a lot of money in platforms like Investengine etc because its only online whereas the others are more established. I do have about £100 in Investengine but a while ago they wouldn't recognise my username and it took a lot of to-ing and fro-ing to sort out. Any ideas for a vanguard fund that doesnt hsbe such a high UK weighting? Thank you.

Albermarle

Hi yes that's true but to keep costs down I wanted to use Vanguard. I also have hsbc global strategy adventurous in my LISA but if I go for that a j bell 

Vanguards platform cost is 0.15% and AJ Bell is 0.25%

VLS100 is 0.22% I think .

These are only around 0.12%

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