With the new school term rapidly approaching, parents who choose to send their children to private education could well be set to find pressure on their finances increasing due to the rising cost of tuition fees, a new study has suggested.
In figures released by JPMorgan Asset Management (JPMAM), the majority of mothers and fathers surveyed are making a number of financial sacrifices in an attempt to finance their offspring's education. Just over half (52 per cent) of respondents were said to have foregone taking a holiday to help fund this expense. Meanwhile, some 58 per cent of parents claim that they are spending at least ten per cent of their salary on school costs. However, for some 29 per cent such expenses account for at least a fifth of their household income, which could see them particularly struggle with other areas of their finances such as credit cards and personal loans.
Findings from the financial services firm also indicated that 31 per cent of parents have either had to cut back or give up their hobbies, with 30 per cent claiming that they have to rein in spending on their car. Meanwhile, just over three-quarters (76 per cent) of respondents claim that they do not receive any sort of financial assistance, such as a bursary, grant or scholarship, to help with the cost of fees.
Commenting on the study, James Saunders Watson, head of sales and marketing for investment trusts at JPMAM, claiming that by organising their finances and making regular savings parents could help reduce pressure on their monthly outgoings. He stated: "Our message is simple - saving regularly for your child's private education will help to alleviate the strains on your finances at certain times of the year. Life can be made easier and sacrifices can be avoided."
Overall, the chance to provide their offspring with a better standard of learning was the main reason why parents opt for private education accounting for 81 per cent of decisions. Meanwhile, just over half (54 per cent) are reported to make such a choice as a result of nearby poor-quality state schools, with 53 per cent claiming that they send their children to such institutions simply because they can afford to do so.
"While many parents may think sending their child to private school is the preserve of the privileged, our research shows that more than half of parents took this decision because they felt it was the only viable option for their child due to a lack of sufficient state schools in their neighbourhood. In doing this they are committing a large chunk of their finances to schooling and are meeting these with dramatic lifestyle changes, many of which are impacting on how they spend their free time," Mr Saunders Watson purported.
For those struggling to manage their finances in the wake of such rising expenses, taking out a cheap loan could be an advisable method of supplementing a certain standard of living. However, a survey conducted by the Motley Fool revealed that consumers have improbable expectations over how long it will take them to repay their debts. Although the average consumer believes that they will have completed paying off credit run up on personal loans and other types of borrowing within three years, the company reported that it will actually take them seven years and seven months. Overall, the typical borrower was said to have 11,000 pounds in non-mortgage debts.
Meanwhile, two-fifths of Britons in their 40s are revealed to owe over 20,000 pounds, as older consumers were shown to have greater problems handling their money. The financial services provider also indicated that a tenth of respondents aged 58 and above owe so much money that they are not in a position to make repayments.
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