As the cost of living has risen rapidly over the past year due to inflation and interest rates, it’s much harder for students to live. Supporting children at university can become a challenge if you haven’t planned ahead. We have listed different ways you can help your children, so they can focus on their studies and enjoy their student life.

• Keep in touch regularly
  Going to university is a positive experience for most young people, but it can also be a scary time, especially in the first term. Your child may want to prove to you they are happy and independent, and they might avoid telling you when they are struggling. As well as their health and wellbeing, this applies to their financial wellbeing too. Regular contact via messaging or video calls will enable you to stay connected.
• Send care packages
  A care package is a simple idea that can help a young person adjust to living away from home for the first time. You could create a hamper with food items, toiletries, and accessories, such as socks, hats, and scarves. As well as some practical items, you could include a few of their favourite treats. Care packages will enable your child to enjoy some home comforts and ensures they have essential items to hand.
• Budget for course materials
  Many university courses require certain reading materials or equipment, which you would be expected to buy prior to your child starting at university. For some families, this can determine whether their child applies for specific university courses. If you haven’t discussed this aspect with your child, make sure you gain clarity on the expected costs for the entire duration of the course. This will enable you to budget.
• Taking out student finance
  Student loans enable young people to receive financial support for their studies. At present, full-time students can receive up to £9,250 for their tuition fees (£11,100 for accelerated degree courses). Students can also apply for a maintenance loan to help with living costs, and the amount varies on where they are living. These loans will need to be repaid once the young person starts earning a certain level of income.
• Repaying student loans
  When it comes to student loan repayment, there are different plans that apply, depending on when your child started university and where they live. If you live in England, for example, and your child goes to university this September, this would be Plan 5. The income level for repayment is £25,000 per year (you would pay 9% of any income above this threshold), and loans are then written off after 40 years.
• Funding student accommodation
  Instead of a young person facing maintenance loan debts, you might decide to pay for their student accommodation. Some parents take this stage further by buying a student property as an investment. The child lives in the property during their studies, and they rent out any remaining rooms to other students. There are tax, mortgage and stamp duty implications for buy-to-let properties – speak to our team for advice.
• Educate young people on money matters
  It’s important to provide a financial education to your child before they leave home. Understanding the basics of finance will enable them to be better equipped when it comes to managing any student loans. Open a savings account for them and encourage them to put a little money aside regularly. A few savings can soon add up and provide a young person with some extra cash when they need it the most.
• Get a savings plan in place
  Even if your child is still an infant, in these uncertain economic times, early financial planning for their future is essential. Whether they decide to go to university or not, they can use their savings towards a deposit for their first home or to buy a car. You can open a Junior ISA for a child under the age of 18 if you are their parent or legal guardian. The current savings limit for a Junior ISA is £9,000 per year.

Create a financial plan for your child’s education

Student loans can result in young people getting into a serious amount of debt before they’ve even had the chance to earn an income. And when they do leave university, they are still likely to need some financial support, such as saving up for a house rental deposit.

It’s worth factoring in whether providing them with a little financial assistance today will result in them having less debt when they leave university. After all, if you’re a parent, they are likely to come to you for financial assistance regardless.

Our financial planners can help you plan ahead for your child’s education. By creating a financial plan that covers likely expenses, you can provide your child with a better start in life once they’ve finished their studies.

Need a financial review to help you put plans in place for your child’s university studies? Get in touch to speak to our financial planning team.

Sources:

https://parents.actionforchildren.org.uk/education/school-university/supporting-child-university/

https://www.gov.uk/repaying-your-student-loan/what-you-pay

https://www.gov.uk/student-finance/new-fulltime-students

https://www.gov.uk/junior-individual-savings-accounts