If you're planning to support your children when they reach university, it might be wise to start saving now. The Zurich Cost of Education Survey 2020* reveals the staggering costs for college students living at home and in rented or student accommodation.
While the average cost of sending a child to primary and secondary school might seem high, the expenses associated with third level education are in a completely different ballpark. All 'free-fees' third level institutions charge a the maximum rate for 2019-2020 is €3,000 per year. Unfortunately, this student contribution is just one of the costs likely to be incurred. Add to this the increase in travel expenses and the rising cost of rent for students living away from home, and you can see how quickly the cost of putting your child through third level education can add up.
The found that when it comes to third level, unsurprisingly accommodation represents a substantial average annual cost.
In 2020, 60% of college students are living at home. The number of students living in rented accommodation has decreased this year to 16% and the number of college goers living in student accommodation has also remained the same.
The average spend for student accommodation was €3,945 but the cost of rental during the academic year isn't cheap either, averaging more than €3,698. Parents also said their children’s college fees were between €2,000 and €4,000.
Another noticeable shift is in the mode of transport that third level students are using. Students have switched their main modes of transport to college from cars and cycling to using public transport and walking. It’s not surprising that students are trying to cut transport costs given that the average spend on transport to college has increased again this year from €315 to €358.
The cost of third level education
|Parents financial support
|With student accommodation||€8,467|
|With rented accommodation||€8,220|
|Living at home||€4,522|
|With student accommodation||€33,868|
|With rented accommodation||€32,880
|Living at home||€18,088|
Building up funds
A great education is the best possible start in life and for most parents ensuring they can provide for their children's education, from primary school right through to third level, is crucial. Our Cost of Education research clearly shows that college education doesn't come cheap and by the time a teenager reaches third level, parents are really feeling the pressure of funding their children through university or college.
While accommodation is the biggest financial drain for college students, other costs such as transport and living expenses can quickly add up. In addition, 71% 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 €1,260.
There are ways to reduce the financial burden such as limiting the use of public transport, and indeed if a third level student has a part time job, that will certainly help.
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 help avoid putting their households under severe financial pressure, or pushing them into debt, is to ensure early planning around their children's education, adopting measures such as early life savings schemes.
*Source: Zurich Cost of Education Survey 2020
Something to think about...
It's clear to see that the cost of education is high and increases over the years. So, wouldn't it make sense to plan ahead and build up your savings year-on-year?
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 August 2020) from when your child was born, by the time they started school you could have built up savings of €8,613 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*||€8,613||€22,092|
|Lump sum of €10,000 and regular contributions of €140 per month*||€19,160||€34,126|
|A gross investment return of 3.2% per annum is assumed for the 5 year savings fund and 3.9% 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 2019 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 August 2020 and may change in the future.|
Cost of Education Calculators
Our Cost of Secondary School Calculator is a tool that helps you work out how much you need to save to cover the costs of putting children through secondary school.
Use our Cost of College Education Calculator to work out the estimated costs of sending your children to college and to see how much you might need to save each month to meet these college costs.
When it comes to planning your future, saving is a great place to start. Whatever your goals are, saving with Zurich is a smart move. Whether using Google Assistant or Amazon Alexa, the Zurich Ireland voice services action offers you multiple savings calculators to help plan and save for the future.