A recent survey has unveiled that parents in the UAE anticipate between Dhs 250,000 and Dhs 600,000 in funding their children’s higher education.
Despite these significant costs, many parents are unprepared financially as the survey revealed that 29% have yet to begin saving for their children’s university education.
The survey by market research company YouGov, commissioned by Zurich International Life (Zurich), part of Zurich Insurance Group, highlights a critical financial gap that could affect the educational opportunities available to many children.
With 63% of respondents anticipating such high costs, the study calls attention to a significant financial responsibility that many families aim to fulfil.
Traditional saving methods
Traditional saving methods still dominate in the region, with 77% of the 1,000 residents surveyed opting for bank deposits, while 48% invest in shares.
However, only a small fraction (14%) of respondents are utilising education-specific savings plans, which are designed to enhance growth and provide targeted benefits for educational expenses.
While conventional deposits offer safety, their typically lower returns may not be sufficient to keep pace with the increasing costs of higher education. Education-focused savings plans, which often include investments in growth-oriented funds, remain a more strategic approach.
These plans are designed to accumulate savings while also outpacing inflation, ensuring that the value of savings does not diminish over time.
“While the substantial costs associated with higher education underscore the urgent need for effective savings strategies, starting early and choosing the right education savings plan can be a game-changer in helping parents save today for their children’s happily ever after,” said David Denton-Cardew, Head of Propositions, Zurich in the Middle East.
According to the survey, most parents believe allocating 6% to 20% of their monthly salary is sufficient for education savings.
The survey however emphasises that more effective and affordable savings plans are needed. Empowering parents to give their children the best chance at their dreams with a tailored education savings plan remains a sustainable strategy.
Value adding strategy
An overwhelming 87% of respondents expressed strong interest in education savings plans that also offer life insurance cover. These dual-purpose plans help in accumulating funds for education and provide a safety net that ensures financial security for the family, should the worst happen.
As education costs soar, starting early, and exploring various savings options, including dual-purpose plans, can offer a balance of growth and security.
“Having a well-structured education savings plan does more than just save money; it helps grow your money through appropriate investment strategies and ensures the protection of that investment. This strategy has some notable benefits including flexible payment options and the ability to tailor the plan to meet individual financial goals. The substantial costs associated with higher education underline the urgent need for effective savings strategies,” noted David.
Parents could consider plans that offer tailored solutions, long-term growth and the added peace of mind of life insurance cover to satisfy this goal. By adopting a strategic approach to savings, parents can have better chances to achieve their children’s educational goals.
tanvir@dubainewsweek.com
