Families who want to ensure their children graduate debt-free from university need to start saving now, this is because the average cost of someone going to university could increase to £100,000 in 18 years time.
According to the Institute for Fiscal Studies, after a 3 year degree course the average student can expect to leave university around £50,000 in debt. So how can you leave university debt free when you graduate? Well that responsibility lies with your parents and grandparents. By starting to save and invest for a child while they are still in nappies can result in them leaving university debt free without a lifetime of paying for it.
Investing £346 per month into a stocks and shares Junior ISA when a baby is born will cover the full cost by the time they graduate at 21, assuming the average returns of around 5% per year. --> Using these same growth rates, if you wait five years until they start university, you will have to save £953 a month.
Lump Sum Investment
Families can invest £42,400 now and expect it to grow to cover these future costs from the age of 18. Grandparents Contributions Grandparents can gift money to help with university fees, up to £3,000 can be given away each year without it being subject to inheritance tax at 40%. Exempt transfers are also acceptable, the giver must survive for seven years after the gift has been given, less face inheritance tax.
There are many ways to start saving for future costs such as university. MWS is committed to helping all individuals invest and save for their futures to help them reach the financial freedom and stability they desire. Contact us today to start taking the steps towards your financial goals.