Saving for University

runningliz · 8 May 2012 at 12:10PM

Hello, First post on here so I hope I am in the correct place.

It is a long time off yet (10 years) but I am thinking about how best to save for when/ if my children decide to go to uni. I have 2 boys (7 & 5).

I was wandering whether to just save into child trust fund about £250 each per month or whether there were accounts other people would recommend.

It is quite a worry for me. Me and husband are both self employed. I just work part time as a personal trainer so don't earn a huge amount. The last thing I want is to be in position in 10 years where I don't have the cash to put kids through uni if that is what they would like to do. If they don't want to go at least it would be a nice saving plan to help them.

I did a search on the forums but have not found any similar discussions - apologies if I was not searching hard enough

Thanks, Liz

guitarman001 · 8 May 2012 at 1:32PM

Think about whether it will be worth it - seriously.
Make sure they're geared toward something that will EARN.
Move to Scotland to become resident and get tuition for free.

EDIT - if you want to stay in England then I would suggest sending the kids to a University in Europe. Plenty of good ones that are cheaper then English Universities, plus they can learn a new language while away.

downsizer3 · 8 May 2012 at 1:54PM

Well done for thinking ahead.
I have simply saved into the highest interest achieving account that I can and keep an eye on the rates. You can move it about or spread it as you wish.
I did take out one of those Child trust fund things when they came out ( my daughter is also 5) but its rate isn't very good so savings are elsewhere.
When you've amassed a decent amount - think again - a larger amount may offer other opportunities but until you've worked up a few £1000s I'd just stick with a 'high' interest acount - probably one of those 30 day access or longer - they seem best rates.
By the time our kids get to that age uni won't be free in Scotland I'd guess - let alone anywhere else - even then - a pot that allows them a deposit on a flat or whatever is a great idea so I'd ignore the last poster!

CLAPTON · 8 May 2012 at 2:02PM

personal I would invest the money is unit trusts or OEICs which have a decent chance of growing over the 11- 13 years to go

atush · 8 May 2012 at 2:09PM

I thought of this over a decade ago, as I have 3 boys. One is in his final year and I have twins starting in Sept/oct.

I saved into investment trust savings plans. I saved monthly, for over a decade. It is a good way to save, and is low cost but give you equity exposure. They saved bday and xmas money, and had cash funds over 2K to see them thru entertainment and other such expenses. We also saved in cash and equities elsewhere for Uni and our retirement.

In your case, some of the CTFs are inv trust based (think F&C has one). Or like me you could just use the Inv trust in house savings plan.

Don't neglect to pay NI contribs for both of you as you are SE, and don't forget to see to your own pension needs alongside. This may mean cutting your monthly contribs for each child but you do need to look after your needs as well.

cashbackproblems · 8 May 2012 at 2:57PM

Due to the time scale i would also recommend safe funds like Invesco Perpetual via HL which you can invest monthly in an ISA account for them, alternatively if you dont want any risk just search for the best savings account then once you have accumulated a lump sum after 5/6 years u can fix it in a 4/5 year bond e.g. with icici/nationwide.

Also do you really need to save £250 each, as they can get interest free tuition fee loans which they pay back once earning and even £150 each per month over 10 yrs (plus compound interest earned) sounds plenty

xylophone · 8 May 2012 at 3:05PM

Be careful of the tax aspect if giving to your children outside the CTF-
http://www.direct.gov.uk/en/moneytaxandbenefits/managingmoney/planningyourpersonalfinances/dg_10013916
http://www.hmrc.gov.uk/tdsi/children.htm
http://www.hmrc.gov.uk/individuals/savings-income.htm
Remember that you can move the CTF to another provider http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ChildBenefitandChildTrustFund/ChildTrustFund/WhentheChildTrustFundisupandrunning/DG_193644

You could consider saving within your own ISA allowance and considering the money as earmarked for University.

After the age of 18 you can give as you wish but might need to have regard to IHT (apart from maintenance) see http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

guitarman001 · 8 May 2012 at 4:17PM

downsizer3 wrote: »

By the time our kids get to that age uni won't be free in Scotland I'd guess - let alone anywhere else - even then - a pot that allows them a deposit on a flat or whatever is a great idea so I'd ignore the last poster!

I think my advice was decent!

I'm not saying it's a bad thing the OP is saving - all good!

ruperts · 8 May 2012 at 6:57PM

Nice thought, but I don't know why you are worrying, the worst case scenario is that they will have to take advantage of the cheap loans/graduate tax system like almost every other student.

My kids won't be having uni paid for by me, even if i can afford it. It'll be a good opportunity for them to learn to make a responsible financial decision ie ensuring that their investment will be worth it in the end by studying something useful.

ViolaLass · 8 May 2012 at 6:59PM

ruperts wrote: »

Nice thought, but I don't know why you are worrying, the worst case scenario is that they will have to take advantage of the cheap loans/graduate tax system like almost every other student.

I agree. I don't see the need for parents to save and worry so much. I have £20k of student debt which I will pay off in due course but it doesn't concern me and I wouldn't like my parents to have worried and saved for years for it.

tight_is_right · 8 May 2012 at 10:55PM

I'm with the last couple of posters, make them decide whether to go based on the assumption that they pay for it. If they know it's all paid for then they're not going to be making the best decision. Even if you pay fees there would be nothing stopping them taking the full loan and spending it on booze.

Part of being a student is struggling with money so if you make it too easy they're not going to get that lesson. If they decide to go then give them an allowance to help with for food/rent and they will be plenty thankful.

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