Parents saving more to meet cost of tuition fees

Posted on February 11th, 2011 | Categories - News

University tuition fee increases may be responsible for a slight boost in savings towards the end of last year.

More cash is being set aside by parents who want to be able to pay for their children’s education.

Parents are saving more to finance their children’s university degrees following the tuition fee hike, according to an ING Direct survey.

The study found that a quarter of the 1,300 adults polled have either started a university fund or increased the amount of money they put away each month to meet the cost of further study. This has resulted in a 3.6% increase in the level of accessible savings over the last three months of 2010.

People aged between 16 and 34 were found to be the most likely to increase their savings.

The research also highlighted that a third of people said they intend to reduce their debt levels and almost a half of participants admitting that the VAT rise would affect their future spending plans.

ING Direct chief executive Richard Doe said: “While we’ve seen savings levels decline for much of the year, the final quarter has brought with it an unexpected bounce, clearly driven by parents saving in response to the proposed hike in tuition fees”.

He added: “We’ll have to wait and see if this leads to any sort of savings renaissance, as while Britons are clearly determined to restore their cash reserves in 2011, there will be a number of obstacles which will make saving difficult”.

However, despite the slight increase in savings towards the end of 2010, there was still an overall decline – savings fell by 11% to £221 over the course of the year leaving the average Briton with £1,834.