Parents and grandparents are increasingly contributing to university costs to reduce the burden of student debt, but financial experts caution against compromising their own long-term financial security. Recent research from Standard Life indicates that more than one in ten parents and grandparents are currently paying for or saving towards tuition fees to help younger family members pursue higher education.
The rising costs of university education are placing significant financial pressure on families. In England, tuition fees are set to increase to £9,790 per year for the 2026/27 academic year, resulting in a three-year degree costing over £29,000 at current prices. If fees continue to rise at an estimated rate of 2% annually, the total cost for a child born today could approach £43,000 by the time they attend university. Additional expenses, including accommodation, travel, and day-to-day living, further heighten the overall financial commitment.
According to Mike Ambery, retirement savings director at Standard Life, the challenge for many families lies in balancing these rising educational costs with their own retirement plans. Approximately one in six parents anticipate having to retire later or live more modestly in retirement due to financial support provided for their children’s education.
Ambery emphasizes the importance of maintaining a focus on personal financial goals while assisting with university costs. He advises families to regularly review their income, expenditures, and long-term savings plans to establish a sustainable level of support. Starting savings early—even in small amounts—can help spread the financial burden over time and avoid reliance on large lump sums when university enrollment approaches.
Ambery also recommends exploring tax-efficient savings options, such as Junior ISAs, to maximize the benefits of early contributions. Beyond financial planning, he encourages open communication between parents and children about the realistic level of support that can be provided. He underscores the necessity for parents and grandparents to continue contributing to their pensions to mitigate financial pressures in later life.
As higher education expenses continue to rise, the findings highlight the complex financial decisions facing families and the need for a balanced approach to supporting students without jeopardizing personal financial security.