Saving for children’s education urged

PARENTS have been urged to start saving for their children’s third level education after a survey showed that almost a third of them have no financial plans in place.

The survey of 1,000 people also found that most parents with children under 18 do not have any realistic idea of the cost of putting a student through third level education away from home.

The living expenses associated with a four-year university course can be up to €60,000. This could rise dramatically if an OECD review of Irish third level education due to be completed this summer proposes the reintroduction of tuition fees for some or all students.

The Royal Liver Assurance survey found that 89% expected their children to go to third level college. But 31% had not yet started making financial plans to meet the cost.

The company which commissioned the research said parents should start thinking of saving now for their university education, as well as encouraging their children to save.

“Despite the current situation where there are no university fees, many families are still encountering great difficulties in supporting their children through third level education,” said Royal Liver Assurance’s John Walsh.

Irish Consumers Association finance spokesperson Eddie Hobbs suggested parents needing the equivalent of €30,000 in 18 years’ time should consider investing around €1,300 a year in an aggressive equities fund. For those with children already in primary school, he said putting €3,300 annually in a more cautious fund would be more appropriate.

The Union of Students in Ireland (USI) said more than half those attending third level work part-time to help meet their living expenses, even those getting State maintenance grants. The most recent USI figures suggest the annual cost for away-from-home students is about €7,000, although some research has suggested it is double that amount. But the Royal Liver survey also found a high level of misunderstanding about the costs of sending a child to college.

Almost 40% of those with children under 18 felt the total cost for four years would be less than €20,000; 16% could not provide an estimate and only 14% thought it would be more than €40,000.

Among those who had not taken out a savings plan, just under half said it was because of a lack of extra money and a third said they had not got around to it.

Labour leader Pat Rabbitte said last month that the State should invest €1,000 for every newborn Irish citizen, who could access the funds when they turn 18. He said it would help young adults fund their education into the 2020s.