Parents scrimp on school, university fees to offset rising living costs

Many households are being forced to dip into savings reserved for private school fees or future higher education expenses due to rising day-to-day living costs, recent reports have suggested.

Half of all parents who responded said they were using school fee savings to help meet everyday expenses, with the average expenditure on private education more than £500 per month. A quarter of those polled said they had reduced the amount spent on private schooling, while five per cent (over 100,000 parents) had stopped payments entirely. Others may make a switch from boarding school to day schooling, or look at state alternatives to private education.

Elsewhere, a study by HSBC has revealed that just over half of parents had not yet begun setting aside money for future costs such as higher education, with 1 in 10 respondents saying they were not planning on contributing to their child's university expenses at all. With the increase in tuition fees to a maximum of £9,000 from next year, estimates predict a total cost of as much as £48,000 for students starting in September 2012.

Of those parents who planned to put money towards tuition fees, a portion had considered renting out a room in their house to supplement their savings, while others suggested taking on a second job or working overtime. Another way of sourcing extra cash could include encouraging children to live at home during university, thereby avoiding accommodation expenses.

Liam Suter of online children's savings resource CompareJuniorISA.com said: "This alarming trend towards dipping into children's savings to make ends meet will only end in disaster in the context of rising tuition fees. Families with no other option are being forced to make a choice between making day to day finances work and their children's futures. We at CompareJuniorISA are passionate about the need to save for your child's future. Though times are hard for all of us, we encourage parents to save a little every month for their Child's future in the new Junior ISAs. A small amount now will make a huge difference down the road."

Notes for editors

www.CompareJuniorISA.com is a soon-to-be-launched free online resource for parents, providing information on children's savings and all aspects of family finance. The site includes performance comparison tables and parent reviews which can help you make an informed decision about where to put your child's money.

www.CompareJuniorISA.com