Over a third of UK parents are postponing retirement to fund their children’s university education.
According to a new study from wealth manager Rathbones, parents expect to work an average of five years longer than initially planned to afford increasingly higher education costs.
However, more than a quarter estimate they will need to extend their careers by up to 10 years to afford the financial burden.
Parents spend £7,200 a year on average to support their children at university, but one in seven find themselves forking out a staggering £10,000 to £15,000 annually.
Meanwhile, nearly 10 per cent provide more than £15,000 a year.
Despite students having the option of applying for a tuition and maintenance loan, roughly a fifth of parents pay all their child’s costs, including both academic and living expenses.
This has been credited to rising fees, with full-time undergraduate tuition costs increasing to £9,535 this academic year, from £9,250.
Similarly, almost 30 per cent of students fund accommodation and living costs, as their maintenance loan does not stretch to cover the full costs of living away from home.
Post graduation reliance
While some young adults expect to stop needing financial assistance after graduation, over half of the parents surveyed expect to continue supporting their children due to a lack of confidence in their children’s financial independence.
Graduates are facing an increasingly tougher job market, with the number of entry level jobs declining by 33 per cent.
They also face loan repayments, upon earning £25,000, with government data estimating the average 2024 graduate left university with debts of £53,000.
Faye Church, senior financial planning director at Rathbones said, “It’s not just three or four years of university costs that parents need to plan for anymore but what happens after graduation.”
“Sadly, this issue shows no signs of abating as the path from university to financial stability appears more and more uncertain.”
Debt woes
The increasing financial strain is having a bruising impact on parents, with three quarters admitting funding their children has negatively impacted their finances, with some finding themselves in debt.
Nearly two-thirds cashed in their savings to cover the costs, while 29 per cent sold investments.
Others reduced pension contributions, borrowed on credit cards and remortgaged their homes.
Church said, “The bank of mum and dad is now supporting adult children for longer , which is having significant financial consequences, both in the immediate and in the long term.”