Funding my daughter 2nd degree

Bosun888

Hello All,
I'm new to the forum so please forgive me if it's the wrong area.
I'm looking for advice or ideas on how to invest or save to fund my daughter second degree.
I have access to my pensions pot and will be working for the next 8-10 years all being well.
My daughter is just finishing her First Degree Vet Bio Science which has given her access to her second degree Vet Med. She has 4 years to complete but as she has already had a student loan for the first degree she can only access maintenance loan which with just cover her accommodation. She has worked during her course to feed herself and pay bills.
But the long and short is that we need to find about £10K for fees each year. 
I can borrow the money or I can use part of my pension pot.
If I use the Pension pot I wont be paying interest but I wont be earning interest either. 
Or do I try and find an investment or an asset that will return the 10K each year. It seems a big ask. Any relevant advice would be appreciated. 

Brie

What type of pension pot is it?  How will accessing it affect your income tax?  Will it affect your ongoing contributions to your occupational pension?

Albermarle

Or do I try and find an investment or an asset that will return the 10K each year. It seems a big ask.

Investment returns are never guaranteed, especially in the short term ( means less than 5 to 7 years).

So the only safe short term route would be a savings account(s) that would produce £10K of interest pa. So the account would have to be around £200K +

Otherwise raiding your pension is robbing your own future. However if you have a big pot then it might not matter so much, especially if you continue to work and pay a good level of contributions each year.

However you need to answer the questions in the previous post first, along with some actual figures.

masonic

Ultimately it will come down to how you're investing your pension and what loan rates are available. It would be unwise to try to invest in higher risk assets to deliver a higher income if your risk tolerance is lower. Drawing down the pension will also have consequences.

You may be way ahead of me, but I'd recommend researching bursary and scholarship options thoroughly, as these may not be well advertised. I have also heard mention of tuition loans being available from 4th year onward as a quirk of the system (if you had only 3 years support for first degree).

xylophone

Is your daughter an only child?


Presumably you are over age 55 with a standard Defined Contribution pension?


If so, have you had a Pension Wise interview for guidance on options for accessing your pension?


Does your  current pension arrangement permit flexible access? 


Ideally you would not want to trigger the Money Purchase Annual Allowance -  in one way or another it would be a case of

taking  PCLS?


Have you obtained a state pension forecast?


https://www.gov.uk/check-state-pension


Otherwise, what would be the position on re-mortgaging your property?

Bosun888

The pension pot is not massive about 150K, so I'm limited on what I can draw down. I'm still contributing to it and could increase contributions. I'm 55 so still a little bit of time.

FIREmenow

Could your daughter defer her course place and work in a relevant graduate job to save money towards the fees? Adding another wage might be your best bet. You could also be saving in this time to add to her amount.

If she is living with you and can work close to home she could build up a decent pot quite quickly.

Taking a year or so out now, followed by a long career with a good earning potential as a vet might be preferable to you reducing your retirement fund or taking on a risky investment strategy when your career and earning potential (and health?) could/should be winding down.

eskbanker

Bosun888 said:

The pension pot is not massive about 150K, so I'm limited on what I can draw down. I'm still contributing to it and could increase contributions. I'm 55 so still a little bit of time.

You're considering withdrawing over a quarter of your pension pot to spend before retirement?  What does your model of post-retirement income and expenditure look like, and what assumptions does it entail?

User232002

Funding her second degree is a negative expectation bet and you shouldn't do it.

If she was intelligent enough, she would have got in to Vet Med the first time round. She did Vet Bio Science either because she didn't have the grades to get in to Vet Med or because she was duped that this degree would enable her to become a vet. Neither is particularly flattering and doesn't bode well for her chances after graduating from the second degree. And so now you're considering giving her an extra £40k, plus her taking on a load more debt, all to 'secure' a position in a field that pays way too little given the training required and which has some alarming job satisfaction outcomes.

Sometimes, the best thing you can do for children is to say no. If you really want to help her, let her live at home for a year with free rent and food. If she isn't willing to go through that, chances are she didn't want it badly enough to begin with.

LHW99

User232002 said:

Funding her second degree is a negative expectation bet and you shouldn't do it.

If she was intelligent enough, she would have got in to Vet Med the first time round. She did Vet Bio Science either because she didn't have the grades to get in to Vet Med or because she was duped that this degree would enable her to become a vet. Neither is particularly flattering and doesn't bode well for her chances after graduating from the second degree. And so now you're considering giving her an extra £40k, plus her taking on a load more debt, all to 'secure' a position in a field that pays way too little given the training required and which has some alarming job satisfaction outcomes.

Sometimes, the best thing you can do for children is to say no. If you really want to help her, let her live at home for a year with free rent and food. If she isn't willing to go through that, chances are she didn't want it badly enough to begin with.

That is very unfair to the OP and her daughter. Veterinary medicine is even more competitive than for human medicine, and in both there are not enough places for those who are good enough and wish to enter.

It is common to go sideways (veterinary / medical science) for a first degree, as that can a) give access to postgraduate degrees and b) means the second degree is usually shorter.

I suspect she may have needed a second postgraduate course even if her first was in veterinary medicine, as that is a common requirement for human medicine.

I second the suggestion of checking bursaries etc, and also looking locally as there can be smaller charities that are happy to assist students in their area, or for certain course types.

You may need to stitch together a range of funding sources, but start with the university she plans to attend. Another good way to help will actually to try and work out the best wording to put into a funding request. Google (try the UK version, and the tools to confine the search to the UK)may give some ideas - you could look at this one to start with

https://www.docformats.com/funding-request-letter/

(Edit to correct spellings)

FIREmenow

User232002 said:

Funding her second degree is a negative expectation bet and you shouldn't do it.

I agree that this post is unfair and unhelpful. 

I wanted to also add that there can be a discount to fees when attending the same university for a second course. 

Also, if she is the first in her family to go to uni, or is from a family background where not many people tend to go to uni, then most unis have bursaries and support available as they have to have an Access and Participation Plan that helps students from under-represented groups access and complete Higher Education.  This is known as widening participation, there is more information here from UCAS: https://www.ucas.com/money-and-student-life/money/scholarships-grants-and-bursaries/widening-participation