A parent’s guide to funding university

It’s no secret that studying at university costs money, and student finance only goes so far. If you have children, what can you do in advance to help fund their university years? We explore some options.

The cost of university is worth considering well before your children start working towards getting there. Most students take out loans to cover their undergraduate tuition. Depending on where you are in the UK, here’s how the cost varies:

• England and Wales: £9,250 per year
• Northern Ireland: £4,750 for Northern Irish students or £9,250 for those from other parts of the UK
• Scotland: free for most Scottish students or £9,250 for those from other parts of the UK

How much you need to repay and when you start paying the loans back depends on which plan (Opens in new window) you're on.

How much can you claim in student loans?

Tuition fees covered by a loan are paid to the university directly. Maintenance loans are for some of the student's living costs and are means-tested. This means that if your household earns more than £50,788 a year, your child won’t be eligible for the maximum student loan (Opens in new window) The amount decreases gradually as household income increases. Factor this into your sums when planning for your child’s university expenses.

Beyond tuition fees, there are living expenses to consider too. Rent and accommodation costs can eat into student loans, leaving little for other essentials like food, transport and course materials. This is where you might want to step in and help your children financially.

Tips to save and invest for your child’s education

Here are some ideas to get you thinking about building a university fund:

• Start early. Begin saving as soon as possible. Even small contributions into a high-interest savings account can add up over time. Consider opening a dedicated savings account for your child’s education and work out how much you (and your child if they’re working part-time) could save regularly
• Junior ISAs (Opens in new window) These accounts allow you to save up to £9,000 annually for your child; you can have a cash ISA or a stocks and shares ISA. Any interest, income or returns on the account will be tax-free, and they can access it when they turn 18. Remember this is your child's account, so you won't be able to withdraw money from it yourself as a parent
• Consider some careful investing to aim to improve your returns. In addition to JISAs, you can invest in many kinds of investments from stocks and bonds to mutual funds – whatever you decide, consider getting some advice first from a financial adviser. Any growth on ISAs is protected from tax, and diversifying your investments can also help to spread risk when you’re investing. Remember, as with all investing, your capital is at risk and the value of your investment can go down as well as up
• Tax rules depend on individual status and may change
• Scholarships and bursaries (Opens in new window) Your child may want to apply for financial aid like a scholarship or grant, which many universities offer based on academic achievements or specific criteria. Check each university’s website for available funding options

Stay invested in your child’s journey

Saving for university is an investment in your child’s future, which you can start sooner rather than later by making the most of your money right now.

By involving your child in the discussions about their education (and how the family will pay for it) you could also help expand their financial literacy, which could prove to be a valuable skill in the future.

Introducing Nutmeg

Introducing Nutmeg, the digital wealth manager that's part of the Chase family. You can open a stocks and shares Junior ISA (Opens in new window) or other types of investment account with Nutmeg (Opens in new window) and keep an eye on your investments through the Chase app – so you can see everything in one place.

Recommended reading

• How to manage your money as a student
• Budgeting your student finances
• School leavers and uni students: how to land your dream job

Nutmeg is authorised and regulated by the Financial Conduct Authority in relation to certain investment services and restricted advice only. Chase is a trading name of J.P. Morgan Europe Limited. Nutmeg and J.P. Morgan Europe Limited are J.P. Morgan companies. Products provided by Nutmeg are not guaranteed by Chase. Before applying, you should consider if a Nutmeg account and its features are suitable for you and your investment needs.

Disclaimer: The Hub is intended as a knowledge portal to provide information on a range of topics, including financial products. Articles may reference products and services that Chase UK does not currently offer. This article is for information only and does not constitute financial advice. To open a Nutmeg JISA, the child must be under the age of 16 and funds cannot be withdrawn until the child turns 18.