Education planning

How do you help your children make the most of the opportunities ahead?

Whether it is paying school or university fees or putting money aside for a first home, providing for your children is a priority for most parents. You want to give them the best possible start in life.

The most important question in education planning is when you will need the money.

Building an education pot is one of the most worthwhile things you can do for your children’s future. It can feel daunting if you don’t know where to start. There are a variety of different ways to save for children, from simple savings accounts to complex trusts. What’s right for one family may not be right for another, so start with these steps:

1. Define your savings goals

The earlier you start, the better. Costs vary with the school or university, the type of degree and inflation. We start by understanding your goals, then show you clearly what it will take to reach them.

2. Have a realistic expectation of the costs

Start by estimating how much you are likely to need to send your child (or even grandchild) to university. Public and private higher education can differ significantly in price, and so can the same course in different countries. Do the maths to estimate how much you need to put away every month, or as a lump sum, to reach that goal by the time the funds are required. Allow for costs to rise over time.

3. Explore your funding options

You can build an education pot through a combination of savings, income, possible grants, family contributions, borrowing and financial aid. Talk to relatives (grandparents, aunts and uncles) about whether they would like to contribute, and how. Keep an eye on the situation in your country and abroad as time goes by. Everyone’s approach is different, and we will be delighted to help you understand what would work best for you and your family.

4. Don’t just save, invest!

The right investment strategy can help your money grow faster, so you are better placed to reach your goal by the time the fees fall due.

Have an investment strategy and stick to it, even when markets are volatile. If you have several years before your children start university, investing for the long term can help your money keep up with rising costs, which cash savings may struggle to do. That is why it is worth considering investing rather than just saving. Investment values can fall as well as rise, and you may get back less than you put in, so the risk you take should match your timeframe.

It’s vital to understand what investments you hold within your educational accounts. We encourage families to know what the education pot consists of and be diversified with a mix of different assets within the investment portfolio.

5. Adjust your approach as you go

The strategy you develop today is just a starting point. We will help you track your progress and make adjustments as the market shifts or new priorities come your way.

When markets are in turmoil, it may feel like all the hard work you did to save for future education expenses is in jeopardy. You are not alone; most parents tend to feel emotional about education savings. It’s an investment that combines your own efforts to provide for your child’s education with your hopes that a degree will bring them a happy life.

It doesn’t feel good, but you shouldn’t let it derail your plan. Volatility is a good moment to check on your portfolio, but first ask whether you need to do anything at all.

Trying to time the market is extremely difficult, so in many cases it is better to leave the account alone. If your timeframe or circumstances have changed, that is the time to talk to us.