45% of parents have made no provision to fund their children’s education

Almost 25% who save do so with children’s allowance
Bank to launch online tool to calculate school expenses

Over two thirds of parents believe that they will have to borrow to fund their children’s education, yet 45% of them have made no provision according to research published today 20 August 2012, by Bank of Ireland Life, in association with online parent resource, Schooldays.ie.

Highlights from the research include:

Over two thirds of parents believe that they will have to borrow to fund their children’s third level education.
Almost 50% of respondents were not aware of the actual cost of third level education. However over 50% believed it would cost approx €6,873 per year.
56% of families who experienced financial difficulty sought financial assistance from family while only 23% sought financial assistance from the government.
Pocket money for secondary school kids ranged from €2 to €60 per week. Secondary school students that work earn on average €19.42 per week.
Pocket money for third level students ranged from €10 to €120 per week. Third level students that work earn on average €43.50 per week.

Commenting on the research results, Damian Smith, Head of Investments, Bank of Ireland Life said: “75% of parents believe that the best time to start saving for their children’s education is when their child is between 0-4 years old. However of those parents, 52% started when their child was between 5-11 years old and almost a quarter of them are doing so with the children’s allowance.

“Parents recognise that they will need to fund their children’s education and that starting to save as early as possible is the best way to achieve this. Starting to save at an early stage has a number of benefits, the most important being that it can make it more affordable. Secondly they will have a fund built up when the time comes, which will reduce the need to borrow.

“We understand that parents with young families are busy, but it is important that they take the time to consider how their children’s education will be funded. We will be launching an online calculator shortly to help them understand how much they should be saving. However we would highly recommend that they talk to a financial adviser to ensure they select the option best suited to their needs. A worrying finding of the survey indicates that only 5% of parents talked to a financial adviser before they started to save,” concluded Damian Smith.

Almost two thirds of parents were earning less over the last three years, during which time approximately one family in five of those surveyed suffered a job loss. Despite this, almost 70% of families have made no change to the amount of pocket money they give their children in the last year while just over 12% increased the allowance per child.

The findings also highlight that Irish parents still want the best for their children. Apart from a stabilisation in pocket money allowances, nearly half of the parents have maintained the same spend for extra curricular activities and 38% of them have invested more in this type of activities than in the previous year before. 63% of the parents of primary school children spend between €100 and €500 on extra curricular activities per child each year. Almost one third of parents are spending over €500 per child on extra curricular activities per year. When looking for savings in household finances, over 46% of the families do so through a reduced spend on childcare arrangements.

Other key findings from the research include:

36% of parents would be prepared to pay for private secondary school education to improve exam results.
Over 38% cited that they would buy their children’s school books online with over three quarters of them doing so because they believe it will save them money and time.
65% of parents think that children should wear their school uniform on their communion/confirmation day.
73% of parents think that school uniforms are too expensive, with 91% advocating the idea of introducing a school crest badge which could be affixed to a standard uniform that could be bought in a supermarket. Despite the cost, 55% of families opt for new school uniforms.
51% of parents buy the uniform a size larger so it lasts for more than one school year.
86% of parents feel pressurised to contribute to the costs of running the school through sponsored events.
83% believe that for primary school, our public schooling system provides as good an education as that available through a private school. 61% believe the same is true for secondary school.

Commenting on the survey results, Annemarie Wade of Schooldays.ie said: ”Parents are continuing to seek ways of saving money on back-to-school costs particularly with regard to school books and uniforms. Parents are availing of the free advertising facility on Schooldays.ie to buy and sell thousands of secondhand school books and many are using our forums to source or sell secondhand school uniforms.“

The research figures compiled by Bank of Ireland Life in association with Schooldays.ie also gives a breakdown of typical costs of educating your child through secondary school and third level education.

Secondary school (public): €2,260 (annual cost)
Secondary school (private): €7,005: (annual cost)
Third level (with rented accommodation): €10,918 (annual cost)
Third level (if living at home): €6,017(annual cost)