Most parents want the best start in life for their child. Of all the benefits you can provide, none has a more lasting value than a good education at a school or university where your son or daughter will be happy and successful. And in today’s increasingly competitive world, where higher education is seen as the key to success, it is natural that we should want our children to make the most of their learning opportunities.
However, school and university fees have steadily risen over the years and the cost of good education can now be a major expense. Therefore, planning in advance to make sure you have adequate funds to meet these costs makes economic sense, especially if you have more than one child. Making the right financial arrangements today will mean that the decision whether to go on to higher education can be decided on ability, not financial standing.
Similarly, your future net disposable income could be significantly diminished by a heavy school fee commitment and you may have to compromise your own financial goals or lifestyle. However, planning in advance can mean financial freedom for yourself whilst at the same time providing an excellent start in life for your child.
Not everyone has the disposable income to start planning immediately so you can elect to choose a low start option. This allows you to get a plan in place and the option of increasing the amount later when your circumstances allow. It is worth obtaining a detailed quotation so you can see if you are above or below the right level of saving. Most expatriates will save more when they are overseas and then reduce the amount should they return to a taxable environment or one offering less salary.
There are also ways of reducing your tax exposure which is covered in our Trust section. The Education plan can be established in Trust to reduce tax exposure with the College/School requesting the fees directly from the Trustees and not you as the individual. Similarly, a Trust can ensure that the asset is used for the benefit of the children in the event of your demise and not frittered away from the benefit of the intended beneficiaries.
The sooner you realise the inevitability of school and higher education fees, the sooner you can start planning for them financially!
Contact one of our fully qualified advisers today for personal advice on the options available to you.