By the Regional Sales Director, Friends Provident International
As a general rule, expats are a pretty resilient, hard-to-shock lot.
That’s because we had to be as we adjusted to life in the far-flung, exotic parts of the globe in which we find ourselves. But there is one group who spend a fair amount of time in a state of surprise and occasional bewilderment, at least for a period: those who have just had their first child.
Many of the reasons for the shocked looks on their faces are well known: the sleepless nights; the dawning awareness of unimagined responsibility, stretching out for decades before them; or simply just the mounting costs of baby clothes that are outgrown after only a few weeks.
In my experience, a major source of expat parents’ anxiety is the growing realization of what it’s going to cost to educate their recently-arrived bundles of joy, possibly beginning as early as age one or two with the surprise cost of nursery school fees!
The issue of our children’s education is, in fact, something all expat parents should think about, not just those with new-born babies. It brings with it many questions, such as whether a family should remain in the foreign outpost in which they currently find themselves, or plan on moving elsewhere – out of consideration for the type of school that would be best suited for their child; the cost of schooling, particularly if private ‘international’ schools are likely to be necessary if they stay put; and even where our children might attend university one day.
International students
One of my biggest surprises, which I am sure is the same for many UK expats is the fact that if you remain abroad, you could have to pay significantly more to send your child to a UK university than you would if you were still back home, even if you’re a UK citizen and your child is too.
The reason for this is that your children will be regarded by UK officials as ‘international’ students, by virtue of where you currently happen to live. This could mean that, instead of tuition fees of GBP 9,000 a year for a UK resident student, your fees per child could rise to as much as GBP 23,000 as an international student. On top of this, there are other costs for international students such as rent, general living expenses and travelling ‘home’ to be considered.
The bottom line is that UK expats with children are likely to face higher education costs than if they were living at home. Planning for these costs may therefore be essential. We know doing so is not easy, but setting money aside as early as possible, in a savings or investment plan, is a good way of helping to ensure education costs are easier to cope with further down the line.
In looking at education costs, it may be worth considering some of the following steps:
- Your employer may have a scheme to help expat staff pay for private schools for their pre-university age children – nursery through to secondary school (up to age 18). While it is rare to be offered assistance with university fees, help with school fees is quite common, particularly in countries in which the local schools don’t follow the UK or US curricula, and teaching is carried out in a language other than English.
- Where your child attends secondary school will matter when it comes to applying to universities, as different countries have different curricula. A growing number of international schools understand this and now offer the option of the International Baccalaureate. US universities look for SAT (Scholastic Aptitude Test) or ACT (American College Testing) exam results, while UK institutions want to see A-Levels.The time to consider which qualifications your child needs is not the year before they’re due to go off to university, but earlier.
- If your plan is to return to the UK in time for your children to attend university as UK-resident students, think about how you can arrange to be UK resident – so that they will also be – a full three years before they would be starting university.
- Be aware that your child may not necessarily want to attend university in the UK by the time he or she is 18. I have heard that certain universities in the US and Australia, for example, have become highly popular among international students, in spite of their generally higher tuition fees for international students.
- The key is to start saving for your children’s education as early as possible, I make regular contributions to an investment plan and have found this manageable due to surplus monthly income. The sooner you start, the more time there will be for investment growth to compound, which could make it easier to meet future education costs.
- Don’t forget to factor currency fluctuations into savings calculations. If you are being paid in one currency but school or university fees are in another, it may be worth saving/investing in this currency to avoid exposing your savings to currency movements. (For example, if your savings had been in euros and your child’s plan was to attend Harvard University in the US, you would have seen the annual tuition fees rise significantly in the recent past, as the euro has plunged to its lowest level since 2005 relative to the US dollar).
This article is for information only. It does not constitute as investment advice or an offer to provide any product or service by Friends Provident International and other companies within the Friends Life Group. Please seek professional advice, taking into account your personal circumstances, before making investment decisions. We can accept no liability for loss of any kind incurred as a result of reliance on the information or opinions provided in this document.
All information contained within this blog correct at the time of publication, 14 April 2015. Source: Reposted with permission from Friends Provident International
Brought To You By International Financial Services
