It was reported last week that since universities were given permission to raise their tuition fees to a staggering £9000 a year, that more grandparents are stepping in to assist their grandchildren to pay for higher education. Amongst 55-64 year olds, 10% of grandparents say they intend to help out where possible, while this figure rises to 15% amongst over-65s.
While it was expected that fewer people would apply for university this year, figures saw an increase from 618,247 in 2012 to 637,456 in 2013, which may suggest that grandparents are already helping to pay the exorbitant fees now facing students. A study by Key Retirement Solutions found that so far 3% of grandparents have given their grandchildren money to pay for education, with this figure set to rise to 13% in the next ten years.
There appears to be a powerful motivation for grandparents to assist their grandchildren, but with the fall in annuity rates and relatively low levels of saving amongst people over 55, they may find themselves struggling to do so. Anyone who wishes to offer pecuniary support to a young member of their family must really think long and hard about whether they can afford to do so. With careful thought and planning however, it shouldn’t be a problem.
You may want to put money into a savings account, or set up a trust with the specification that the money is used to fund their education. For more details you can visit the Prestige Tax and Trust Services site where our team will be happy to advise you on the best course of action. You can also follow us on Twitter for regular updates.
- Bank of Gran and Grandad Opens for University (keyrs.co.uk)
- More grandparents help fund students (yorkshirepost.co.uk)
- Millions of grandparents to fund grandchildren’s university education (telegraph.co.uk)