With the topic of tuition fees always comes advice on how parents can prepare for the costs in advance. Many companies have released guides to funding tuition fees, mostly stating that investing in equity based investments over time should produce better returns.
One company is promoting savings of £115 per month into investment trusts for four years. At this point they believe that £3,000 could be withdrawn to cover the fees for year 1. Payments would then continue, as would withdrawals.
Our View
Whilst planning ahead for any type of fees is commendable, parents must understand the risks of investing in equity-based investments, and especially investment trusts. If payments are made on a regular basis, then you should see your investment accumulate. However, the level of risk you take could seriously affect the regular ups and downs of your investment.
For example, if you invest in a fairly volatile fund, the value could move significantly up and down on a daily basis. This will not benefit you if you need to withdraw £3,000 to pay for fees.
Our view is that whilst equity investments do tend to provide better long-term returns, investors should always spread their investments through many sectors such as cash and even some National Savings products. This means that you will not have to rely so heavily on the performance of stock market linked investments.
Fees Calculation Service The Techies at have already written a special calculator to work out how much you need to save to make sure you have enough for these fees.
Give us a call on 01543 677444 or contact us to get a calculation done for you.