High net worth parents would prioritise investing a lump sum for their children over paying university fees, new research from Saltus has revealed.
The latest Wealth Index Report, based on a study of 2,000 individuals with investable assets of £250,000 or more, found that while 68% of parents still believe university degrees offer good value for money, many weigh that value against competing priorities such as property support and long-term investing.
When asked how they would allocate £50,000 for their child, nearly six in 10 (57%) high net worth parents said they would prefer to invest the money, for example in an ISA or towards a property purchase, rather than use it to pay university fees. Among those earning £250,000 or more, this figure rises to 62%.
It comes as figures from the Student Loan Company show that students in England now graduate with an average of £53,000 in debt.
While a majority of high net worth individuals overall say university represents good value, this falls sharply to 46% among parents with children at or beyond university age. Meanwhile, 15% actively disagree that university degrees offer good value, doubling to 30% among those with children aged 18 or over.
The research suggests concerns about graduate employment prospects are prevalent. Among respondents who voted Labour at the last election, more than half (53%) now say they regret that decision due to what they perceive as “a collapse in graduate employment”.
Educational background also plays a role. While 82% of high net worth parents send their children to private school, 58% feel there is a bias against privately educated students when applying to top universities.
Furthermore, there are growing doubts about the relevance of degrees in an increasingly AI-driven world, the wealth manager said. More than half (54%) of respondents believe AI and automation will reduce the future value of a university degree, rising to 65% among those who would rather invest £50,000 for their child than spend it on university fees.
Mike Stimpson, partner at Saltus, said: “When graduates are leaving university with more than £50,000 of debt, and younger generations find it harder and harder to get onto the property ladder, it’s understandable that HNW families are looking at whether that money could work harder elsewhere.
“For some high net worth parents, this is about values as much as value – they want university to remain a rite of passage, to encourage independence and an understanding of money, rather than removing every financial responsibility. For others, investing early is seen as an alternative, flexible and resilient way of supporting their future compared with funding a degree with increasingly uncertain outcomes.
“At the same time, rapid advances in AI and automation are forcing a broader rethink of what skills will actually matter over the next 10 to 20 years.”
He added: “Ultimately, these figures suggest a potential shift in mindset. Parents are considering keeping doors open for their children rather than committing large sums to a single route whose return on investment is no longer assured.”
Main image: ilya-pavlov-XPT-OtA0E-8-unsplash
