Planning for your Child’s University Education

The rising cost of university education can be daunting for many parents. As the years go by, this cost only seems to escalate, leaving parents grappling with financial constraints by the time their offspring are ready for higher education.

Ensuring your child has a solid foundation for their adult life is a priority for many parents. If you’re contemplating financially supporting your child through university, it’s prudent to commence your savings journey sooner rather than later.

Understanding the University Savings Plan

The University Savings Plan is a unit-linked savings scheme that empowers you to make regular investments in a diverse array of investment funds. Once you’ve selected your preferred funds, this choice remains consistent throughout the plan’s duration.

Who Should Opt for This Plan?

• Parents keen on securing their child’s educational future.
• Relatives or godparents wanting to set aside funds for a child’s education.
• Investors looking for a savings commitment of 5 years or more.

Reasons to Choose the University Savings Plan

• Long-Term Benefits: Even modest, regular contributions over an extended period can amass a significant reserve, earmarked for university expenses.
• Inflation Protection: Traditional savings in banks can be diminished by inflation. The growth from investments can counteract inflation over the years.
• Avoiding Debt: The 2019 ‘Zurich Cost of Education Survey’ highlighted that over 40% of Irish parents with university-going children incurred debt to manage university expenses. This savings plan can be a proactive step to sidestep such financial strains.

Key Advantages

• Peace of Mind: Initiating a University Savings Plan can alleviate some of the financial stress associated with funding your child’s university education, ensuring they have a robust start to their careers.
• Gift Tax Benefits: This plan facilitates maximising Gift Tax benefits. You can legally transfer the plan to your child, fully utilising the annual Gift Tax exemption limit of €3,000 per individual or €6,000 for married couples.
• Adaptable Contributions: The plan offers the flexibility to adjust your contributions as per your convenience.
• Diverse Investment Options: A broad spectrum of funds is available for investment.

Determining Your Savings Amount

Considering the average university course spans four years, it’s essential to accumulate enough to support each child’s education. For instance, saving a mere €430 monthly until your child turns 18, with a modest 3% annual return on investment, would result in savings exceeding €100,000.

Our team of advisors is at your disposal to help determine the ideal savings amount, tailored to your objectives and the investment duration. Subsequently, you can transfer the policy to your child to optimise gift tax benefits.

Ready to secure your child’s educational future? Provide your details and queries, and one of our expert financial advisors from FJ Hanly & Associates will promptly get in touch to guide you further.