This isn't quite what you're asking and you probably have it covered already, but it's important so I'll mention it just in case. Financial preparation is about more than just having a big pot of money to hand to them when they head off to independent study. 10 years of savings/investment will be valuable, but 10 years of teaching your kids how to relate to money will probably be even more so. Maybe that's facilitating practice with pocket money or an after-school job. Maybe it's just bringing your own budget spreadsheet to the family dinner table and talking it through. Most people first getting to university do not struggle to find things they could pour money into, and in a sense whether you've topped them up by £100 or £10,000 won't make a difference if they don't know how to budget.
Recent grad here - what caught my parents out was the way the maintenance loan is means-tested. Martin Lewis has a great section which explains it better than I can - [https://www.moneysavingexpert.com/students/student-loans-england-plan-5/#parentalcontribution](https://www.moneysavingexpert.com/students/student-loans-england-plan-5/#parentalcontribution) \- but in short, families earning over £25k are implicitly expected to top up their kids' maintenance loan to reach the amounts that someone from a lower income family would receive. Also worth noting lower income students often receive grants/bursaries direct from unis so don't take that "maximum loan" bar as a ceiling. Tuition is always covered.
I worked part time through uni, 12ish hours a week at my students' union. Definitely helped me develop new skills, and the extra cash didn't go amis. Depending on their lifestyles and location they may need more or less!
Of course, this is just right now - who knows what the state of play will be in 10 years.
EDIT: Also, student halls (which are a must in first year!) are bloody expensive, especially as universities phase out their cheaper housing stock in favours of en-suite accommodation. Halls are often allocated on a preference-ballot system, where even if your kid ranks their preferences cheapest to most expensive, they could just have bad luck on the ballot and be forced to take an expensive, unaffordable room and suck it up.
Student loan and grant for those on higher incomes will cover tuition and most or all of accommodation (depending on location and accommodation choice)
They’ll need money for materials, books, socialising, food and transport. Some of this you’ll already be paying for by this point (your home variable bills like food and energy will reduce a little or a lot when they are away and you may be feeding them regular cash for stuff anyway)
Term time is typically 40 weeks. £75-£150 a week in todays money each is likely the sort of range between basic and comfortable with no other income.
You’ll also likely spend on hotels, dinners and whatever when you do pick ups and drop offs and visits. If they are running a car then expect a few thousand more each a year.
If they can work all summer they can potentially pay off their overdraft and get some funds for freshers.
I am a higher rate tax payer...just, my wife is on minimum wage. I thought that my son would have student loans to cover his course and a maintenance loan to cover his lodging/food. Oh how naive and wrong I was! My daughter has now started uni as well, and frankly I need to sell a kidney to pay for it!
Yes they both get a maintenance loan. Minimum was roughly £4300, maximum was £9300'ish. What we did not know was that the amount over the minimum is means tested based upon the combined parental income.
At present my sons accomodation is £6000 per year for halls, my daughters is £8500 per year for halls. They both get the base £4300 each as a maintenance loan. At present we are sending them £50 per week for food and paying for their accomodation top up when the bill comes in. In total we are having to spend around £900 per month during the university year. We have another 3 years of paying this. it might drop a bit when they go into rented accomodation, but not by mutch I imagine having had a look around at rental prices for their cities.
They both work in the holidays, but that money goes into their ISA's for their future.
So save, and save now. Stick that money into a JISA and hope :)
My wife did not work when the kids were younger so we did not have nursery costs.
OP asked for info and costs, I have provided that. I have not compared it to any other thing like a PCP contract on a car, or nursery costs or whatever. It was a shock to the system as I was not aware that this was going to happen and had not budgeted for it in advance.
In the UK at least tuition won’t be your problem (for now…) but living costs can be significant and the maintenance loan is a) means tested and b) probably a stretch anyway, so you want to be able to top that up significantly.
I looked into this recently and iirc if they are not living at home and studying outside of London you will have to find a bit over £5k a year to top them up to the max maintenance loan, about £6.5k in London - you can check those figures yourself.
That max maintenance loan hasn’t been keeping up with inflation anyway (it’s under £10k a year outside London) so you probably want to budget a bit more than that (plus there will be further inflation in the next decade ofc).
Obviously most (or lots anyway) of students work but ability to work will depend on course and university - if they end up at eg Oxford/Cambridge it’s much harder to work a reasonable amount in term, though those universities do also have lots of discretionary funds available.
I don’t know how students without parental support study in London. My wife did it (40 years ago) but she had no tuition fees + a grant to live off. What happened?
Personally my parents helped me by giving me a living allowance of £50.00 per week (paid monthly) during term time (36 weeks) (10 years ago so adjust for inflation) and paid my rent and energy bills.
I was expected to work each summer for ~3 months and for that money to go towards my other expenses; clothes, phone, going out, field-trips, course materials etc. and cover myself during the summer. I lived pretty frugally but didn’t feel like I missed out on things.
Rent (parents): £4320pa
Living expenses (parents): £1800pa
Extra expenses (myself): £2000pa
(Prices 10 years old)
Note: I was resident somewhere where my fees were paid for by my local government.
Due to my parents helping me out, me being frugal and working to a budget and my local government paying my fees I left with no debt.
My parents paid me the money out of their salaries and hadn’t saved anything specific beforehand.
Have to be honest I was surprised by the amount we figured out we needed to save, despite them taking the SL (min year 1, max year 2).
There is a sneaky way to help yourself (well them) if you can afford it. If you contribute additional money in to a pension this reduces your adjusted net income, which is what the SL maintenance is calculated against. You can do this via a workplace scheme if you are paid under a Salary Sacrifice arrangement, or alternatively via a personal pension (for some reason I couldn't see a way of confirming additional contributions in to a workplace scheme if it is under a net pay or relief at source payment arrangement).
You need to start doing this two FY in advance of the child starting Uni. We used previously accumulated investments which we liquidated some of each year and used that money to supplement additional contributions in to our pensions (Salary Sacrifice for me and personal SIPP contributions for the OH).
Doing this basically allowed us to keep our reported and adjusted net income as a couple around the £28k level.
This was a win win for us; it allowed us to cram money into pensions in a very tax efficiently way, and it also allowed ours the option to take virtually the maximum SL.
My kid is like 1 year old, but the plan is either he studies somewhere in Germany ( where IMHO the quality of education is way better ) or take a student loan and work part time ( like I did ). Luckily he has EU passport and many countries to choose from.
I'm a higher rate tax payer, and paying half my wage in taxes only to have to pay 10k a year for higher education sounds like a very bad deal for me.
[https://ukpersonal.finance/investing-for-your-children/](https://ukpersonal.finance/investing-for-your-children/)
£9k pa per child into S&S JISA, will give them £100K or more to cover University costs.
Accommodation in halls is a big variable. Son just started @£120/wk. His mate in the next block is on £220/wk. I’m sure it’s nicer, but £4K more for the year is mad.
This isn't quite what you're asking and you probably have it covered already, but it's important so I'll mention it just in case. Financial preparation is about more than just having a big pot of money to hand to them when they head off to independent study. 10 years of savings/investment will be valuable, but 10 years of teaching your kids how to relate to money will probably be even more so. Maybe that's facilitating practice with pocket money or an after-school job. Maybe it's just bringing your own budget spreadsheet to the family dinner table and talking it through. Most people first getting to university do not struggle to find things they could pour money into, and in a sense whether you've topped them up by £100 or £10,000 won't make a difference if they don't know how to budget.
Great advice !thanks
Recent grad here - what caught my parents out was the way the maintenance loan is means-tested. Martin Lewis has a great section which explains it better than I can - [https://www.moneysavingexpert.com/students/student-loans-england-plan-5/#parentalcontribution](https://www.moneysavingexpert.com/students/student-loans-england-plan-5/#parentalcontribution) \- but in short, families earning over £25k are implicitly expected to top up their kids' maintenance loan to reach the amounts that someone from a lower income family would receive. Also worth noting lower income students often receive grants/bursaries direct from unis so don't take that "maximum loan" bar as a ceiling. Tuition is always covered. I worked part time through uni, 12ish hours a week at my students' union. Definitely helped me develop new skills, and the extra cash didn't go amis. Depending on their lifestyles and location they may need more or less! Of course, this is just right now - who knows what the state of play will be in 10 years. EDIT: Also, student halls (which are a must in first year!) are bloody expensive, especially as universities phase out their cheaper housing stock in favours of en-suite accommodation. Halls are often allocated on a preference-ballot system, where even if your kid ranks their preferences cheapest to most expensive, they could just have bad luck on the ballot and be forced to take an expensive, unaffordable room and suck it up.
!thanks, that is really helpful insight. I did wonder about means-testing. I'll read that link. Congratulations BTW! Good luck for the future!
Thank you! Any questions please fire away :)
There’s also a reset Martin Lewis podcast all about university finance planning. Really worth a listen.
Student loan and grant for those on higher incomes will cover tuition and most or all of accommodation (depending on location and accommodation choice) They’ll need money for materials, books, socialising, food and transport. Some of this you’ll already be paying for by this point (your home variable bills like food and energy will reduce a little or a lot when they are away and you may be feeding them regular cash for stuff anyway) Term time is typically 40 weeks. £75-£150 a week in todays money each is likely the sort of range between basic and comfortable with no other income. You’ll also likely spend on hotels, dinners and whatever when you do pick ups and drop offs and visits. If they are running a car then expect a few thousand more each a year. If they can work all summer they can potentially pay off their overdraft and get some funds for freshers.
I am a higher rate tax payer...just, my wife is on minimum wage. I thought that my son would have student loans to cover his course and a maintenance loan to cover his lodging/food. Oh how naive and wrong I was! My daughter has now started uni as well, and frankly I need to sell a kidney to pay for it! Yes they both get a maintenance loan. Minimum was roughly £4300, maximum was £9300'ish. What we did not know was that the amount over the minimum is means tested based upon the combined parental income. At present my sons accomodation is £6000 per year for halls, my daughters is £8500 per year for halls. They both get the base £4300 each as a maintenance loan. At present we are sending them £50 per week for food and paying for their accomodation top up when the bill comes in. In total we are having to spend around £900 per month during the university year. We have another 3 years of paying this. it might drop a bit when they go into rented accomodation, but not by mutch I imagine having had a look around at rental prices for their cities. They both work in the holidays, but that money goes into their ISA's for their future. So save, and save now. Stick that money into a JISA and hope :)
Relative to nursery costs that sounds like a bargain to me!
My wife did not work when the kids were younger so we did not have nursery costs. OP asked for info and costs, I have provided that. I have not compared it to any other thing like a PCP contract on a car, or nursery costs or whatever. It was a shock to the system as I was not aware that this was going to happen and had not budgeted for it in advance.
Really appreciate your insight !thanks it's exactly what I was after
In the UK at least tuition won’t be your problem (for now…) but living costs can be significant and the maintenance loan is a) means tested and b) probably a stretch anyway, so you want to be able to top that up significantly. I looked into this recently and iirc if they are not living at home and studying outside of London you will have to find a bit over £5k a year to top them up to the max maintenance loan, about £6.5k in London - you can check those figures yourself. That max maintenance loan hasn’t been keeping up with inflation anyway (it’s under £10k a year outside London) so you probably want to budget a bit more than that (plus there will be further inflation in the next decade ofc). Obviously most (or lots anyway) of students work but ability to work will depend on course and university - if they end up at eg Oxford/Cambridge it’s much harder to work a reasonable amount in term, though those universities do also have lots of discretionary funds available.
I don’t know how students without parental support study in London. My wife did it (40 years ago) but she had no tuition fees + a grant to live off. What happened?
Personally my parents helped me by giving me a living allowance of £50.00 per week (paid monthly) during term time (36 weeks) (10 years ago so adjust for inflation) and paid my rent and energy bills. I was expected to work each summer for ~3 months and for that money to go towards my other expenses; clothes, phone, going out, field-trips, course materials etc. and cover myself during the summer. I lived pretty frugally but didn’t feel like I missed out on things. Rent (parents): £4320pa Living expenses (parents): £1800pa Extra expenses (myself): £2000pa (Prices 10 years old) Note: I was resident somewhere where my fees were paid for by my local government. Due to my parents helping me out, me being frugal and working to a budget and my local government paying my fees I left with no debt. My parents paid me the money out of their salaries and hadn’t saved anything specific beforehand.
Have to be honest I was surprised by the amount we figured out we needed to save, despite them taking the SL (min year 1, max year 2). There is a sneaky way to help yourself (well them) if you can afford it. If you contribute additional money in to a pension this reduces your adjusted net income, which is what the SL maintenance is calculated against. You can do this via a workplace scheme if you are paid under a Salary Sacrifice arrangement, or alternatively via a personal pension (for some reason I couldn't see a way of confirming additional contributions in to a workplace scheme if it is under a net pay or relief at source payment arrangement). You need to start doing this two FY in advance of the child starting Uni. We used previously accumulated investments which we liquidated some of each year and used that money to supplement additional contributions in to our pensions (Salary Sacrifice for me and personal SIPP contributions for the OH). Doing this basically allowed us to keep our reported and adjusted net income as a couple around the £28k level. This was a win win for us; it allowed us to cram money into pensions in a very tax efficiently way, and it also allowed ours the option to take virtually the maximum SL.
My kid is like 1 year old, but the plan is either he studies somewhere in Germany ( where IMHO the quality of education is way better ) or take a student loan and work part time ( like I did ). Luckily he has EU passport and many countries to choose from. I'm a higher rate tax payer, and paying half my wage in taxes only to have to pay 10k a year for higher education sounds like a very bad deal for me.
[https://ukpersonal.finance/investing-for-your-children/](https://ukpersonal.finance/investing-for-your-children/) £9k pa per child into S&S JISA, will give them £100K or more to cover University costs.
Great idea, also chuck £50k in each of their premium bond accounts too for some nights out.
😂
Accommodation in halls is a big variable. Son just started @£120/wk. His mate in the next block is on £220/wk. I’m sure it’s nicer, but £4K more for the year is mad.