With school leavers currently confirming their university places, many UK parents are now reviewing how they will help their children pay for a university degree. With tuition fees alone costing an average £9,000 a year, university is a significant investment for both parents and students.
An annual HSBC report, the ‘Value of Education Learning for life’, released today, shows that although 71% of surveyed parents think university is unaffordable for most people in the UK, nearly half (48%) believe an undergraduate degree or higher is necessary for their children to achieve their life goals.
72% of surveyed parents have a specific occupation in mind for their child and the lengthier, and often more costly, degrees of engineering (11%) and medicine (10%) top the list of parents’ preferred courses.
The survey found that although parents see independence (86%) and learning to be financially responsible (82%) among the most important skills university offers, they still expect to support their children financially throughout university.
90% of parents said they will contribute to their child’s tuition fees and/or living costs.
After a mortgage, a university degree can be the most significant debt families have to repay. UK parents who currently borrow, or plan to borrow, to fund their children’s university costs expect to repay the debt for eight years and for their children to be paying off their share for 12 years.
Despite the cost, 67% of UK parents would consider sending their child abroad to university. Of those parents, 59% would be prepared to pay more for the experience compared to what they would pay to educate their child in the UK.
The main reason parents would not consider sending their child to study at university abroad is that they do not want their child to be that far away from home (25%) or they cannot afford it (24%).
The Value of Education Learning for life UK Report represents the view of 5,500 parents in 16 countries, including 352 UK parents.The findings in this report are based on a nationally representative survey of 352 parents in the UK, who have at least one child aged 23 or younger currently (or soon to be) in education, and who are solely or partially responsible for making decisions about their child’s education. The research was conducted online by Ipsos MORI in March and April 2015.
Caroline Connellan, head of UK wealth at HSBC, said: “Many UK parents consider taking on debt to send their children to university to help them make their life goals a reality.
“With the average cost of tuition alone around £9,000, it can be the biggest financial commitment families make aside from a mortgage.
“Many parents feel a responsibility to help pay for their children’s education but despite best laid plans, by the time their children reach university age, parents haven’t saved as much as they had intended.
“With the cost of university continuing to rise, planning ahead can help ease financial pressure. Being prepared by understanding options available and taking action early can give parents the confidence that they can support their children through university in years to come.”
