The material on this website is for information only
and is not intended as any recommendation or endorsement of any products or companies mentioned. We are not licensed by the FSA to give financial advice, and none of the material on this website constitutes or is intended to constitute financial ...
AOL Money UKHomebuyers mortgage approvals rose in October following dropAOL Money UKJoanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: "Today's figures confirm that we are in the middle of a significant and prolonged rise in borrowing by households, with consumer credit now growing ...UK consumer credit rose strongly in October, while mortgage approvals edged ...This is MoneyU.K. Mortgage Approvals Rise as Housing Demand StrengthensBloombergBank of England's Funding for Lending Scheme extendedFinancial 67 news articles »
Hargreaves LansdownWhat's your pension plan B?Hargreaves LansdownGiven the uncertainty and potential for further rule changes, it is now more important than ever to ensure that you make adequate personal pension provision. Our free guide gives 10 simple ideas to improve your personal pension. ... The flip side is ...and more »
The GuardianPlan UK suffers computer and data theftThe GuardianPlan UK said no debit or credit card details were taken, and the information obtained by the thieves “cannot be used directly to access supporters' bank accounts”. It added that the security measures in place meant that obtaining the personal ... to know if your funds are expensive 'closet trackers' by the firm earlier this year found just over one in three UK funds simply mimic the FTSE All Share index, without declaring themselves as trackers. But the fund management industry is facing criticims from a more powerful .... Another ...and more » cashback from your bank's credit card and current account customers can now earn cashback on purchases at many major retailers. ... When an offer is redeemed the money is credited to the customer's account within five days. ... Email
Have you met...
Latest Members:


Sloane Beck




Kathryn Moore



Saving for your children's education.

Five top financial tips for parents

Start saving early to send your children to school and university. As more people face reduced pay packets or even redundancy, saving and planning for your children’s education has become even more important.

In addition to reduced incomes, families have also seen the average school fee increase by more than 10% a year over the past few years. Little help is available to parents as specific ‘school fees funding products’ can no longer keep up with this increase and have been withdrawn, and despite many private schools being registered as Charitable Trusts, school fees are not eligible for tax relief.

As well as school fees, parents also need to be prepared for university costs to increase.

Now that university is considered to be a normal part of higher education, Geoff Everett, tax director at Smith & Williamson, is concerned that fees may increase at a similar rate as school fees.

He says: “If this happens, in 10 years’ time we could see fees reach £7,200 a year. Living expenses and books cost roughly the same amount as fees, so if we use a scenario where the fees rise by 10% and the living expenses rise by 3%, the combined annual cost for a single student in 10 years’ time could be over £11,000 a year.”

So what can parents do to prepare for these costs?

Geoff advises: “Start early. If your child is still relatively young, for example in junior education, there is still enough time to invest on a regular or lump sum basis.

“How you invest will depend on your particular circumstances but as far as possible parents should aim to minimise their combined tax bills by making full use of their tax allowances and the lower tax bands.  Tax-free opportunities such as ISAs should be considered for anyone aged 16 and above and don’t forget everyone, whatever age, has an annual tax-free capital gains allowance, currently of £10,100 (for 2009/10).  

“If you put income-producing assets such as shares or cash deposits into your child’s name, as a parent you will generally be taxed on the income. However, if the asset comes from others, for example grandparents, the child can receive income up to £6,475 per year tax-free, so this can be a very tax efficient arrangement. It may also result in inheritance tax savings for grandparents.

In addition there is a valuable IHT relief for regular gifts within normal expenditure. This means that if grandparents pay school fees on behalf of their grandchildren, or make regular gifts to the children in anticipation of school fees or other expenses, those payments would escape future IHT liability provided the grandparents are left with sufficient income to live on.

It’s also worth noting that capital gains are treated as the child’s even if you provide the assets, so a parent could gift or buy assets, which aim to generate capital gains rather than income, to a child and the child could sell them, making a capital gain each year of up to £10,100. The key is to plan ahead!”

Smith & Williamson’s top financial tips to help parents funding school fees or university costs:
•          Save early
•          Consider ISAs and other tax-free accounts
•          Take advantage of capital gains allowances, currently £10,100 per person per year, irrespective of age
•          A child can earn tax-free income from assets gifted by non-parents
•          Discuss with grandparents the possibility of them helping to pay school fees

Advertise with us  |  Privacy  |  Terms & Copyright                                                                                     Website maintained by USP Networks