Parents could well be heaping financial pressure upon
themselves in an attempt to fund their child's private
education, new figures show.
In research carried out by JPMorgan Asset Management
(JPMAM), some 18 per cent of parents have been revealed to
have sacrificed making contributions to either their own,
or their partner's, pension scheme so as to help finance
the cost of sending their offspring to private school.
Meanwhile, just over a third (36 per cent) claim that they
have had to use money specifically being saved for other
purposes to meet the financial commitments of such a form
of education. Findings from the firm also showed that 25
per cent of parents are happy to take money from their
saving and investment accounts rather than create a
specific fund for their children's schooling - only eight
per cent of respondents were indicated as setting up a
scheme for this particular purpose.
Commenting on the figures, James Saunders Watson, head of
sales and marketing for investment trusts at JPMAM,
reported that by consistently making such sacrifices
parents could be damaging their ability to service other
demands on their finances such as making personal loan and
credit card repayments.
He said: "It is concerning to see that so many parents (18
per cent) feel the need to make sacrifices or reductions to
either their own, or their partner's pensions, in order to
fund their child's private education. What's also worrying
is that the costs of private education can eat into standby
savings which some parents may have put aside for a rainy
day to use on other financial commitments such as saving
for a family holiday or funds for unexpected costs or
emergencies."
And with 29 per cent of parents claiming that private
education costs account for nearly a fifth of their annual
income, it was suggested that such expenses can be a
"significant financial sacrifice" for many mums and dads.
Consequently, a number of consumers were shown to be using
"cash windfalls" to fund their child's tuition, as 16 per
cent look to use their bonus and eight per cent use
inheritance money - both sources of income which are not
guaranteed. Mr Saunders Watson added that the recent
"volatility" seen in the global economic market should act
as an indicator that consumers should look to save or
invest money regularly instead of contributing "lump sums
on an ad-hoc basis".
Those concerned they will be unable to manage the costs of
sending their child to private school may wish to take out
a debt consolidation loan. By merging previous debts
accrued from various loans, credit cards and other forms of
borrowing, consumers may be able to free up more money each
month which in turn could be put toward tuition fees or
saving into a pension scheme. Earlier this year, Adrian
Kidd from Mint Financial Services claimed that opting for a
debt consolidation loan could be a wise option for those
wishing to pay off money on a number of plastic cards.
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