The Wealth Design Group Autumn 2017 Budget Guide

University funding
The £9,250 a year maximum tuition fee for new 2017/18 students in England and Wales is, for now, a
fact of student life. All maintenance assistance is now also by way of loans.
If you have children likely to go to university, it makes sense to consider your funding options. For
example, JISAs are a potentially valuable tool to build up a fund by age 18. For those who prefer a
greater degree of control over the student’s access to the investment at age 18 (while retaining tax
efficiency) collective investments held subject to an appropriate trust can look attractive, as could an
offshore investment bond.
Despite these tax-efficient “pre-funding” opportunities, under the current rules many experts consider
that it makes sense to take the student fee loans while at university rather than pay fees from capital.
That is because repayment only begins once earnings reach £21,000 (£25,000 from 2018, according
to a statement made by the Prime Minister last month) and any debt is written off after 30 years from
the April after graduation. There is also the possibility of reform and some loan write-offs in the future,
regardless of the government’s hue.
University debt will add to the difficulties young people face in getting onto the now rapidly rising
property ladder. Another reason, maybe, why parents and grandparents might like to consider taxeffective
“pre-funding”.
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