New parents need to save almost £230 a month to send a child to university

15th October 2015


Parents looking to send their child to university need to get saving as new research shows that they should be looking to invest up to £228.17 per month to cover the cost for a three-year course in 18 years’ time.

The analysis from, the online investment platform, estimated that the amount needed in 2033 would be £74,307, assuming current fees of £9,000 and £8,000 annual living expenses adjusted for 2% annual inflation.

The numbers shown in the table below, also highlight the importance saving early – reaching the £57,441.79 needed in five years’ time would require up to £735.82 per month.

By comparison, the average easy access ISA rate at present is just 1.11% while the best easy access savings account pays 1.65% a year.

Using these rates, parents would have to save £310.96 and £295.82 a month respectively to reach the £74,307.08 target by 2033.

Stuart Dyer,’s chief investment officer, said: “Investors with a longer time horizon can typically take more risk, however even with an 18-year time horizon parents may not feel comfortable with a high-risk approach to investing for their children’s education. That’s no reason to discount investments altogether though, as they typically offer the potential for better returns than cash – even when a medium or lower risk approach is selected.”

Saving monthly helps to diversify risk over time – it also allows investors to take advantage of downturns in the market by providing the opportunity to buy investments at cheaper valuations over the long term, known as pound-cost averaging.

“Our analysis also shows how allowing as much time as possible for investments to grow is key: shortening the time to invest can have a major impact on just how much needs to be saved each month,” added Dyer.

University fee targets and related contributions:

  18 years (2033) Nine years (2024) Five years (2020)
  Target Monthly contributions Target Monthly contributions Target Monthly contributions
Upper estimate £74,307.08 £228.17 62,176.84 440.02 57,441.79 735.82
Lower estimate £43,710.05 £134.22 36,574.61 258.84 33,789.29 432.83


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