Parents could be set to face higher than expected pressure on their finances as they underestimate the cost of putting their child through higher education, according to new figures.
In research carried out by F&C Investments, only half (51 per cent) of parents surveyed correctly believe that tuition fees are around 3,000 pounds. However, some 70 per cent of respondents were revealed to not be putting any money away for educational expenses for their children later on in life. And with the average graduate's debt reported to stand at 13,252 pounds, it was indicated that mums and dads could be set to struggle to help their children with the rising costs of going to university, as this figure was predicted to potentially increase should educational establishments succeed in pressuring the government into raising the current 3,000 pounds cap on teaching bills.
Jason Hollands, head of communications for the financial services firm, said: "The research suggests that parents and guardians are not unaware of the tuition costs involved in sending their kids to college, with 51 per cent correctly stating that tuition fees are "around 3,000 pounds and a further 22 per cent assuming these will be in excess of 5,000 pounds. Furthermore, some 53 per cent of parents expect the typical graduate to be more than 15,000 pounds in debt and of these 13 per cent believe the average debt will exceed 30,000 pounds."
And with only about a third of parents making financial provision for their child's education, the majority of these were reported as doing so inefficiently. Research from F&C Investments indicated that the majority of consumers (58 per cent) are using bank or building society accounts to put cash aside, with an estimated 21 per cent opting for a National Savings scheme. However, the company reported that taking out a share-based product would be more effective for saving money over the long-term, despite such deals only accounting for 11 per cent of respondents. Overall, 56 per cent of those putting money away for their children were reported to have done so since their birth, yet Mr Hollands suggested that there is "a lot of work" to do in helping become fully aware of the various savings schemes available to them.
Findings from the firm also showed that 78 per cent of student respondents viewed getting a degree as a "good investment" as it would allow them to get a better paid job. However, like their parents, young people were also shown to be concerned about the debt problems that university can bring. Some 19 per cent of those surveyed claim that they are unable to study their preferred course because it would be too expensive, with 55 per cent reporting that it will take them around a decade to pay off the money owed from their time in education.
Last month, research from the Association of Investment Companies revealed that prospective students are underestimating the costs of going to university. With an average level of 13,252 pounds after graduation, respondents believed they will actually owe under 8000 poundsafter completing higher education. As a result, it was suggested that consumers could face a "painful shortfall" on the financial situation as they may struggle to pay off loans and credit cards in later life.
Author Resource:-
Abbi Rouse writes for AllAboutLoans.co.uk, an online loans comparison site, visit us today for information on all loan topics including cheap loans applications and online loans sourcing from all leading UK providers. Our Site: http://news.allaboutloans.co.uk/
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