The financial cost of raising children to the age of 21 is estimated to be £222,458 in 2013, a 58 per cent increase in a decade, according to insurer LV=. Education and childcare take by far the biggest chunk of that and these figures exclude private school tuition. It is no secret the cost of that is also on the rise.
Last year, private school fees rose on average by 4.5 per cent and in 2011 increased by 4.6 per cent, according to the Independent Schools Council (ISC). From mid-2010 to 2013, average hourly wages have fallen 5.5 per cent, adjusted for inflation – the fourth-worst decline among the 27 EU nations.
But, you might argue, private schooling has long been the preserve of those with above-average wealth. Yet in the decade to 2011, while upper-decile incomes rose by 27 per cent, private school fees rose 83 per cent, according to MTM Consulting. It is not just private school fees that are marching upwards: university fees in England have also been climbing. From 2014, the average university fee will be £8,600 a year, while more than a quarter of English universities will charge the maximum £9,000.
The long and short of it is that parents, young people themselves and extended family members who wish to contribute financially to that child’s education need to box-clever with their money so there is even an option of private and further education. The good news is that by planning ahead, being realistic about saving and investing, and, with the guiding hand of a decent financial planner creating a diversified portfolio, the otherwise mammoth task becomes much more manageable.
For more information on how to put a plan in place to finance your child’s education, from start to finish, read the latest issue of Investazine here: http://www.trustnet.com/investazine
