At this time of year, undergraduates across the UK are starting or returning to university. It’s an exciting time for young people and their families.
However, the prospect of managing higher education costs may bring considerable stress and uncertainty.
Indeed, rising tuition fees and escalating student debt have frequently made the headlines in recent years.
According to the Higher Education Policy Institute (HEPI), a student needs £61,000 to fund a three-year degree to maintain a “minimum socially acceptable standard of living” – and that’s excluding tuition fees of up to £9,535 a year in England and Wales (2025/26). This figure rises to £77,000, excluding fees, in London.
Keep reading to find out how you could help your child manage the expense of a university education while also fostering the financial independence they need for a successful future.
Start planning how to fund higher education as early as possible
With the high cost of attending university, the earlier you start saving towards this goal, the better. This could mean setting money aside as soon as – or even before – your child is born.
The MoneyHelper savings calculator shows that if you invested just £300 a month over 15 years, you could build up a pot of around £73,000, assuming a gross annual interest rate of 4%. At current prices, this could cover a significant portion of your child’s university costs for a three-year degree.
However, it’s important to factor in potential inflation rises over time, as these could diminish the real-terms value of your savings.
One way to maximise your savings is to open a Junior ISA (JISA). You can put up to £9,000 a year (2025/26) in a JISA, and it’s sheltered from tax – this does not affect your individual annual ISA allowance.
Your child can have both a Junior Cash ISA and a Junior Stocks and Shares ISA. However, the annual £9,000 limit applies to the total contributions across both accounts.
A key benefit of Stocks and Shares JISAs, particularly for long-term savings goals, is the potential for higher returns. Nevertheless, you must weigh this up against the risk of capital loss, because the value of investments can go down as well as up.
JISAs are also a valuable tool for fostering financial independence, as they automatically convert into an adult ISA when your child turns 18. At this time, your parental access ends, and your child takes full responsibility for managing the funds.
Ensure that you and your child understand the costs involved
Having a clear understanding of the costs associated with a university education could help you and your child create a realistic financial plan for the short, medium, and long term.
A few expenses to consider are:
- Tuition fees – The government increased the maximum tuition fee for undergraduate students starting or continuing courses at approved (fee cap) providers in the 2025/26 academic year. Fees rose from £9,250 to £9,535 a year, which represents a 3.1% increase.
- Living costs – According to the Student Money Survey 2024, the average student spent £1,104 a month at university, an increase of 2.4% on the previous year.
- Learning materials – Your child may need to buy books and equipment to support their studies. The cost will vary depending on the course and the institution.
- Course-specific costs – These might include field trips and study abroad programmes.
- Travel – Your child is likely to visit home during some, if not all, of their academic breaks. The total cost will depend on the distance and frequency of travel.
- Administrative fees – Some universities may charge application and registration (or “enrolment”) fees. These are typically small, but worth considering.
The actual cost of your child’s education will depend on factors such as their chosen course, the location of their university, and their lifestyle.
Researching university expenses together could ensure that your child appreciates the responsibility and commitment they’re taking on.
It could also be a golden opportunity to boost their financial literacy and confidence managing their money. For example, budgeting is an important life skill to teach your child once you both understand the cost of their education.
Explore financing options
Encourage your child to research and apply for bursaries, grants, scholarships, and student loans. Giving them this responsibility and holding them accountable for fulfilling it could be a powerful way to build their financial independence.
If they are successful in securing external funding, this could also ease your financial burden. As such, there’s less chance that you’ll need to compromise your lifestyle or long-term plans.
Bursaries, grants, and scholarships
Bursaries and grants are typically offered to students who might not otherwise be able to afford a university education, for example, due to low family income or disability. They may be offered by universities, employers, or charitable organisations.
Scholarships are awarded for achievement or excellence in academics, sports, or music.
There are often rules about what these funds can be used for. Some may help with living costs, while others might cover a portion of the tuition fees due.
Generally, you don’t have to repay bursaries, grants, or scholarships.
Student loans
The Student Loans Company (SLC) offers means-tested loans to help students with their university living costs.
The SLC will adjust the amount your child can borrow based on your household income and their living situation while at university.
For example, figures from Save the Student show that if your household earnings exceed £62,377 and your child lives away from home (outside London), they will only be eligible for the minimum loan of £4,915 (2025/26).
Your child will usually need to pay back their student loan once they start earning above the threshold amount for their repayment plan.
Get in touch
If you’d like assistance incorporating your child’s university expenses into your broader financial plan, we can help.
Our team can work with you as a family to ensure that your child shares responsibility for funding their higher education and learns valuable skills that foster financial independence.
To learn more about how we can help, please email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Approved by Best Practice IFA Group Ltd on 13/10/25