Families are turning to investing to help cover the costs of further education, says Fidelity International.
With tuition fees in England and Wales now £9,535 per year, and average living costs exceeding £12,000 annually, the total cost of a three-year degree is around £65,000.
As a result, more than one in five (21%) UK investors say they plan to invest for younger generations in the next 12 months, with junior ISAs proving a popular option.
Among those investing in junior investment products, or considering doing so in the next two years, nearly half (46%) say their intention is to set their child up financially for adulthood. Nearly a third (28%) are specifically earmarking the money for education or career development, while 34% are investing to help protect their children against economic uncertainty.
One in three (30%) also said they see investing in a junior investment product as an opportunity to teach financial literacy from an early age.
According to Fidelity, investing £450 a month and assuming an average annual investment growth of 5%, could see parents build enough to cover their child’s university degree in ten years, while investing £100 a month could result in nearly £15,000 in savings.
Ed Monk, associate director at Fidelity International, says: “With the cost of a university degree now around £65,000, it’s no surprise that many families are turning to investing as a way to stay ahead. What’s encouraging is that building a fund of that size isn’t out of reach – investing just £100 a month could grow into nearly £15,000 over ten years.
“Starting early, using tax-efficient accounts like JISAs, and staying consistent can make a real difference. With a clear plan and regular contributions, any parent or grandparent can build a meaningful financial cushion for their child’s education and ease the emotional and financial pressure when university begins.”
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