If you're planning to support your children when they reach college or university, it might be wise to start saving now. While the average cost of sending a child to primary and secondary school might seem high, the Zurich Cost of Education Survey 2021* finds the costs involved for college students are a lot greater.
The estimated cost of sending one child to college for one year is €12,109 which adds up to €48,436 for the full duration of a child’s third level course.
When it comes to third level, unsurprisingly accommodation represents a substantial average annual cost. It is estimated that the cost of student accommodation for one year is €8,375 and €5,931 for rented accommodation.
While accommodation is the biggest financial drain for college students, other costs such as transport and living expenses can quickly add up. In addition, the majority of parents provide financial support to their children in third level, and over the course of a year, the average spend on parent financial support €1,809.
When it comes to financing their children through college, nearly half of parents use savings to pay for their children's college education.
In third level, parents find covering the cost of this level of education a financial burden. One measure families can take to relieve the financial pressure is to start saving as early as possible.
A useful tool is the Zurich Cost of College Education Calculator which helps parents to work out the annual and lifetime costs of sending children to third level.
Saving for a child’s future
Because the cost of education is high and increases over the years, it make sense to plan ahead, budget and save.
With a Regular Savings plan you can gradually build up the funds necessary to support your children's education.
The table below illustrates just how much regular savings can grow with a Zurich LifeSave Savings Plus plan. For example, if you saved the Government child benefit of €140 per month for five years (as of July 2021) from when your child was born, by the time they started school you could have built up savings of €8,587 in time to fund this crucial stage in their education.
||Savings fund after five years starting primary school
||Savings fund after 12 years starting primary school
|Regular contributions of €140 per month*
|Lump sum of €10,000 and regular contributions of €140 per month*
|A gross investment return of 3.0% per annum is assumed for the 5 year savings fund and 3.4% per annum for the 12 year savings fund. We have assumed that on death, encashment, partial encashment or assignment of the policy or on each 8th policy anniversary, tax is deduced on the gains made at the current rate of taxation, being 41%. A government insurance levy (currently 1% as at June 2021 and may change in the future) applies to this policy. The contribution amounts above are inclusive of this levy. No surrender penalties apply. An annual management charge of 1.25% and an allocation rate of 101% apply. The information contained herein is based on Zurich Life's understanding of current Revenue practice as of July 2021 and may change in the future.
*Source: Zurich Cost of Education Survey 2021