Is it time to reassess saving for your child's education?

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by: bythesea
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Word Count: 382
Date: Fri, 28 Jan 2011 Time: 8:07 AM
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Recent research featured in The Guardian suggests just 4% of UK savers put money away for their children's education - a worrying statistic given that new Government plans are set to prompt a significant rise in further education tuition fees from 2012.

If you have children and plan to encourage them to go down the university path, it's worth taking stock of your saving plans and adjusting accordingly. With institutions being given licence to charge up to £9,000 per year going forward (as opposed to the current maximum of £3,290 per year), many students will be forced to dig much deeper than in previous years in order to complete their undergraduate degree.

Ministers have suggested that the full £9,000 per year will be charged only in exceptional cases, but a report from the Higher Education Policy Institute pours scorn on such claims, predicting that over-subscribed institutions will waste no time in charging the maximum amount from the outset - and that "almost all" universities will be charging the full £9,000 fee within a few years.

The thinking is that any university offering cheaper degrees will be seen as ‘lesser' institutions, meaning that students will flock to the higher-priced courses in the hope that their degree will be given more weight when it comes time to seek post-university full-time employment.

Those who wish to start putting away some money each month to go towards future tuition fees should do some research and ensure that they're making the most of the money they're saving. The first port of call should be to look into opening a Cash ISA if they don't already have one, which will allow them to save up to £5,100 per year tax-free.

As well as maintaining an ISA, it's important to shop around for the best savings rates when deciding on an account for any further savings. fixed rate savings
accounts are perfect for this scenario. These accounts offer a preferential interest rate in exchange for the customer agreeing to keep their money locked away for a specified period of time - and while that may be inconvenient under some circumstances, it's ideal for somebody wishing to save towards their child's education.

About the Author

bythesea specialises in writing about best saving accounts, bonds and bank savings