The cost of putting children through university is growing ever more daunting for clients, according to research from the Association of Investment Companies.
Among parents with children at university, or who expect their children to go, supporting their children through their course is a leading priority, the AIC said. Over half (52%) of parents surveyed consider this to be their top priority when it comes to helping their children out financially, far greater than the 31% who prioritise financially helping their child on to the housing ladder and 7% who cited purchasing a car.
However, 76% of parents admit the rising cost of living has made it more difficult to help.
According to the research, less than three fifths (59%) of students believe it is realistic for their parents to help them financially while they are at university, down from 65% last year, as the cost-of-living crisis continues to squeeze finances. More than half (54%) of current or prospective university students said the cost had made them consider not going to university.
Not surprisingly, ability to help is related to social class, with 65% of students from social grade ABC1 believing their parents will help, versus 47% of those from lower socio-economic backgrounds.
Annabel Brodie-Smith, communications director at the Association of Investment Companies, said: “The cost of university is clearly putting increasing pressure on both students and parents. While it’s encouraging to see the overwhelming majority of parents saving for their children’s future, it’s clear that only a minority are taking advantage of the long-term growth potential the stock market has to offer.”
The AIC said parents overwhelmingly favour cash savings when it comes to saving for their children, with 63% opting for cash compared to 16% who use shares, 15% who chose investment trusts and 11% who opted for bonds. In total, 85% of parents have saved or invested for their children’s future.
However, only about a fifth (19%) of parents realise that it’s possible to invest in the stock market for as little as £25 a month, with 41% believing minimum investments were higher than that and a further 41% not sure.
Brodie-Smith added: “Investment companies can offer diversified access to the stock market and are suitable for investors who are putting money away for periods of at least five years, but preferably ten or longer. They can make great investments for parents who are saving for children. However, any stock market investment can go down as well as up. If parents aren’t sure whether investing in the stock market is right for them, they should consult a qualified financial adviser.”
Main image photo by Cambridge based photographer Chris Boland
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