Article date: 7 August 2008
Fear of financial ruin means cash-strapped parents now dread rather than dream of their child going to university, according to a new study.
Spiralling living costs have seen a fifth (20%) of parents forced to spend savings previously put aside for their children's education - instead risking their own financial futures by turning to their pensions, credit cards or overdrafts to help finance student kids.
One in four (27%) told Norwich Union researchers they feared the impact of their children's higher education years on their own lifestyles, while a third (32%) dread the prospect of both they and their kids being saddled with debt.
The "Graduation Guilt" report reveals financial fears dictate today's higher education choices:
- Almost half (46%) of parents admit they will encourage their kids to stay at home
- One in four (23%) will urge kids towards part-time study so they can work too
- And a fifth of teenagers (19%) plan to defer places so they can work for a year.
But parents are still prepared to make substantial sacrifices and intend to slash holidays (38%), and household expenses (35%) to ensure they can help financially. Others will go even further taking a second job (16%) or re-mortgaging their homes (13%).
Cheryl Cox from Norwich Union comments: "Another generation of UK teens will enter higher education this autumn and, whilst parents may well be filled with pride, this looks set to be overshadowed by fear and panic over how they are going to shoulder the financial burden.
"We all want to do the best for our children but, by making the ultimate sacrifice and using their pension funds to cover the costs, a fifth may face a bleak financial future."
One in four (26%) parents will be able to contribute less then £100 a month towards their kids' student years. For others, "Graduation Guilt" means starker choices - knowing they can only afford to help one of their kids (11%) through higher education or will not be able to contribute at all (30%).
And helping finance the student years will rule out for some parents the chance to help fund other landmark events in their children's lives, like a deposit on their first home (46%) or a wedding day (31%).
Unsurprisingly, over three quarters (78%) of parents are now calling on the government to abolish tuition fees to make higher education more affordable.
Financial fears are taking their toll too on potential students, with one in ten (13%) saying the cost of higher education means they will go straight into work rather than continue studying. Others plan to defer for a year (19%), while over a third (37%) are already panicking about fitting in a part-time job with their studies.
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Notes to editors:
Norwich Union commissioned research with Tickbox.net amongst 1012 UK parents and 265 15-20 year olds between 17 July 08 - 25 July 08.
About Norwich Union
Norwich Union is one of the UK's biggest life insurers. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media