Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

TODAY is results day for A levels and Scottish Highers. Thousands of teenagers find out whether they have, or haven’t, got the grades to get them into the university course they’ve set their hearts on.

Today is also the day that the reality of getting a coveted place at uni starts to get real. And by that I mean financially real. Because this particular ‘rite of passage’ costs some serious money.

That first car or a gap year are both infinitely more achievable with less cash than the sort of money that a place at university costs. Even a deposit on a first home is probably more attainable. With annual tuition fees costing up to £9,250 a year and living costs outside of London reaching up to £28,000 for a three-year course, those collecting their exam results today stand to fork out total costs of about £56,000 for the privilege of being a student for the next three years.1

Students should also think carefully about how borrowing now to pay this sort of amount could eat into their take-home pay long after they have moved on to the next stage of their life. In particular, they must consider how inflationary changes could affect how long they will potentially be making repayments for.

Parents wanting to step in and help cushion the expense also need to get real and acknowledge the fact that accumulating more than £56,000 requires careful forward planning in itself.

While there might not be any time left to do anything to boost those grades or magic £50,000-plus out of nowhere, today is a timely reminder that if you have hopes and dreams of little Johnny or Jemima setting out for further education in the next decade or two, it’s time to do the groundwork today. Because given time and a regular investment, it could be possible to cover the costs and enable them to graduate debt-free.

According to analysis by Fidelity International, if you invest £175 into a Junior ISA every month as soon as your child is born, you could hypothetically generate enough to cover today’s university costs by the time they turn 18. This assumes a steady 5% growth rate (not guaranteed), no platform service fees on Fidelity Personal Investing Junior ISA products, minus a typical annual management fund charge of 0.75% per annum.2

Even if you only invest £100 a month you could potentially generate £32,000 - that’s more than three-years’ worth of today’s tuition fees - while saving £50 a month could generate returns of £16,000.

Planning your child’s financial future may not seem like the main priority when you’ve just become a parent, but it could be one of the best things you do. Whether they end up going to university, starting a business or travelling the world, knowing that they have a nest egg will give them financial freedom and you some peace of mind.


1 - Based on annual Tuition Fee Loan for new full-time students in the 2021 to 2022 academic year of up to £9,250 (£27,750 for three years) plus annual Maintenance Loan for a student living away from home, outside of London of up to £9,488 (£28,464)., Student Finance:

2 - Fidelity International, 4 August 2021

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment on ISAs depends on individual circumstances and all tax rules may change in the future. Withdrawals from a Junior ISA will not be possible until the child reaches age 18. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.

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