Bank of Ireland research finds 99% of parents want their children to go to third level education
55% have yet to start saving for third level education
Almost 50% of third level students don’t receive pocket money
(Issued Monday, 14th July, 2014) Research carried out by Bank of Ireland Life and online parent resource Schooldays.ie has found that 99% of parents want their children to progress to third level education but 55% of parents have yet to start saving for it. Parents are funding third level education in different ways with 43% using savings, 23% availing of education grants, 19% using day to day money and 15% taking out a loan to send their child to university. Of those that have started to save, 42% are only saving between €20 and €50 per month.
The research looked at the cost of education to parents over the course of primary, secondary and third level education with over 1,400 parents from across the country taking part in the online survey. The number of parents who have experienced financial challenges in putting their children through school has dropped 7% from last year’s research, with 58% in 2014 experiencing financial challenges compared to 65% in 2013.
The research also highlighted that almost 50% of third level students don’t receive pocket money from their parents each week, 22% receive up to €40 ,15% receive over €40 with the remainder of students receiving up to €20.
Key findings from the research includes:-
Of those saving for third level education 56% of respondents do not factor in the impact inflation has on their savings. A further 30% consider ease of access to be a factor when considering saving options while 24% cited security as a top priority for them.
In relation to primary school findings, childcare remains one of the biggest costs to parents in this age group with 64% paying a child minder or crèche to look after their children while they work.
Commenting, Bernard Walsh, Head of Investments at Bank of Ireland Life, said: “Parents always want the best for their children and one way to ensure that they are equipped to deal with life’s challenges is through providing them with the best education possible. There are costs associated with education at all levels but particularly for third level students. We all know that we will need money to pay for college fees and expenses and maybe accommodation as well. The first step on this journey should be taken now and we would urge parents to get advice on how best to save for your children’s education. The recipe for success is simple – start saving what you can afford early, top up this amount when you can, and ensure that you can get adequate growth to achieve your goal.
“In Bank of Ireland Life, we have this conversation with parents, and prospective parents, every day. We work with parents to put a plan in place to look after the cost of their children’s education. Options range from deposits to funds that offer an opportunity to achieve substantial capital growth. Bank of Ireland Life has developed a product called Target Saver which has a number of features that may prove attractive to those that are saving for this purpose. Its milestone feature takes a more growth oriented investment approach in the early years and de-risks the investment as your money accumulates. Its target feature means that your money automatically switches to a cash fund when your target education fund has been achieved. There are many ways to save, but the biggest challenge is to identify what you can afford to put aside and what plan is right for you. Spending time getting good advice on this crucial subject is time well spent”.
After school activities continue to be a large spend for parents with 52% of parents spending over €300 a year on extra-curricular activities per child. However, 68% of parents stated they had to make adjustments to their own social and family budgets to continue to fund these activities with most parents cutting back on holidays and family outings. Some parents have also cut back on the amount of activities their children partake in. The cost of grinds remains a significant cost for parents of secondary school students as they are spending an average of €730 per student for secondary school grinds per year.
Other key findings from the research include:
- 70% of respondents believe they need to save between €100 and €500 per month for education costs
- 89% of respondents have not sought professional advice when it comes to thinking about saving and investing their money to cover education costs
- 86% of parents are currently paying for education using their salary or children’s allowance.
- For primary students living in a city 37% of parents spend between €50-€200 per year on transport costs with 30% spending between €200 and €450 per year
- Travel costs are higher for primary students in a rural area with 40% of parents spending between €450 and €700 per year
Bernard Walsh continued “Education costs are something that every parent needs to plan for. However, 89% of people stated they did not seek professional advice when they were looking to save or invest their money for education costs. At Bank of Ireland Life we have dedicated advisors on hand to help parents decide on the best saving and investment options for them.
“70% of parents stated they feel they need to save between €100 and €500 per month to cover education costs, and 99% of parents hope their child will progress to third level education.
“Finding the right option to help meet the cost of education will help take the stress out of the situation. We are here to help and advise parents on the best options to suit their needs. With this research we want to highlight the importance of starting the saving and investment process as early as possible to meet future education costs”.
Commenting on the survey results, Annemarie Wade, Managing Director of Schooldays.ie, said “While it’s clear from the yearly surveys that parents have made cut-backs in their spending in recent years, the surveys also show that parents continue to try and fund additional extra-curricular activities and learning supports for their children by reducing their expenditure on broader family activities.
Wade also suggests that “Parents save money by shopping wisely and looking for the best back-to-school deals and also buying second-hand where they can”.
For further information on Bank of Ireland Life or to find out more about the saving and investment options available visit www.bankofireland.com/investments