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Soaring costs
of education are eating up £7.3bn of parents’ annual
saving for their own retirement, shows new research from MetLife
Europe Limited (MetLife).
Around 23 per cent of adults say that the costs of funding education,
whether it is extra tuition, helping children with university fees
or even paying for private education, is having a negative impact
on their ability to save into a pension.
The average amount being diverted from pensions into paying for
education is reported at being around £57 a month, but some
people are cutting back on pension saving by as much as £300
a month. Around 10.6 million adults say paying for the children’s
education and their own is affecting how much they can invest in
their pension.
Data from the Office of National Statistics shows that education
costs – including private tuition, university fees and independent
school fees – rose from 13.2 per cent last year compared with
the headline Consumer Price Index rate of 2.1 per cent.
University fees account for around £3,000 a year, and figures
from the Independent Schools Council show the average cost of private
education is £9,000 a year, with 564,750 pupils in England
attending independent schools.
Ed Gardner, CEO at MetLife UK, said: “Paying for education
is a vital investment in the future of our children but it is worrying
when that investment is being made at the expense of future retirement
income.
“In the current economic climate everyone’s finances
are under strain and it is understandable if people cut back. However
saving into a pension is a vital part of financial planning and
savers need access to a wider range of flexible retirement solutions
offering increased certainty,” he added.
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Pensions Age June 2008
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