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- Parents think it will cost them on average almost £40,000 to support their child through university, despite having only put aside £11,000 in savings, according to new Aviva research
- The true cost of university is up to £70,000 however, representing a £60,000 gap between actual costs and savings
- Three in four parents (77%) are worried about the costs of their child attending university, with 90% indicating their child will be dependent on them for financial support
- A quarter of parents (27%) expect to pay for some or all their child’s costs, including tuition fees, accommodation and living expenses
- Yet 40% of parents say they do not know what tuition fees, accommodation and living expenses will individually amount to.
12th September 2024 – Parents1 estimate they will need to pay on average almost £40,0002 to put their child through university but report only having saved around £11,0003 for it. This is almost £30,000 less than what they ultimately expect to pay, and up to £60,000 less than the actual cost of university today, according to new research by Aviva.
The average actual cost of university in England and Wales including tuition fees, accommodation and living expenses is estimated to be between £65,000 and £70,000.4 Thankfully, four in five parents (89%)[5] with children going to university in the next three years have had a conversation about how to finance their university fees and living expenses, and half of those families (50%) have spoken about it extensively.
Paying and Saving for University
Three in four parents overall (77%6) are worried about the costs of putting their child through university, with 90%7 of those respondents stating that their child is dependent on them for financial support.
A quarter of parents (27%) are preparing to pay all their child’s costs at university, including tuition fees, living expenses and accommodation. Almost one in five (18%) will pay for some combination of tuition fees, living expenses and accommodation, while another 18% will only pay for tuition fees.
Parents only intending to fund some of their child’s costs indicated their child will pay for the remaining expenses. These costs will be covered by their child applying for a government student loan (54%), getting a part-time job (50%), applying for a university loan from a bank or savings company (25%) or drawing from a specific pot of money, such as Junior ISA, savings, or trust fund (21%).
These parents have saved, or plan to save, around £11,000 to support their child through university, by saving into long-term general savings (33%) or a specific university savings pot (32%). Around a quarter plan to cut back on holidays (26%) or eating out (24%) respectively. Of those who have or plan to take out a loan, they estimate it will take on average three and a half years to repay.
Managing Costs
Awareness of the specific costs of university, whether those are fees, accommodation or living expenses, is low. On average, 40% of parents say they do not know what each of those costs will amount to in total. Less than half of parents (44%) say they know how much their child’s tuition fees, accommodation and living expenses will cost overall, estimating this to be between £30,000 and £50,000 – a lot lower than the expected £70k.
Parents expect to provide their children with an average allowance of £668 per month (£8,016 per year) to cover their living expenses while at university. Of those intending to cover some of their child’s living expenses, the majority will go towards food and drink (60%), followed by educational costs such as books and stationery (51%), and accommodation (48%).
Two in five parents (40%) think their child is most likely to live in university accommodation. However, almost a quarter (24%) anticipate their child will live at home. More than two fifths of those parents say living at home is the cheapest option and will save on living expenses (43%)8.
The amounts that parents expect to have to provide their child with and what they are saving in practice are both at odds with the real cost of university today. This shows the importance of planning ahead for major life events.
Joanne Phillips, Managing Director of Aviva Direct Wealth, commented: “Our research highlights the challenge many parents face when it comes to funding their child’s university experience. The amounts that parents expect to have to provide their child with and what they are saving in practice are both at odds with the real cost of university today. This shows the importance of planning ahead for major life events.
“Although saving and paying for university may feel overwhelming given the large sums involved, it is encouraging to see families having early conversations to discuss how they might cover tuition costs, accommodation and other living expenses.
“Tax-efficient options are available for both parents and prospective students to help cover these future costs, including parents paying into their own ISAs and Junior ISAs. Exploring those options earlier can help parents and students to deal with substantial financial pressures when the time comes to attend university.”
-Ends-
References:
The research was conducted by Censuswide, with 1004 UK parents whose child(ren) is planning to attend university in the next 3 years (aged under 21) between 19.08.2024-22.08.2024. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.
1. Parents surveyed – 77% of those who could estimate their child’s university costs
2. Or £38,000, i.e. between £30,000 and £50,000
3. Parents surveyed who are covering some or all their child’s university expenses (mean £11,000)
4. Save The Student! How much does university cost in the UK?, Think Student, The (Actual) Cost of University in the UK – Student Guide for 2024
5. Combines ‘Yes, we have spoken about it briefly’ and ‘Yes, we have spoken about it extensively’
6. Combines ‘Very worried’ and ‘Somewhat worried’
7. Combines ‘Highly dependent’ and ‘Somewhat dependent’
8. Those who child is likely to live at home
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Fiona Whytock
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