Back to school ... ... and back, and back
The head of an Australian education savings scheme that’s gone on sale in New Zealand says lifelong education savings plans are needed.
There’s a consensus on the need to save for retirement, says John Velegrinis from ASG, but rapid technological change means the average person will have to pay for courses and training to stay relevant and employed.
‘‘In the next ten to 20 years, some 40 per cent of jobs will disappear or dramatically change,’’ Velegrinis says.
‘‘The need to retrain and upskill has never been more relevant.’’
This raises the thorny question of how to pay for it.
In time, Velegrinis says, saving for future education will be seen in the same way as saving for retirement.
Velegrinis hopes some people will decide to start pre-funding their future education upgrades themselves through its Pathway Education Fund, which it launched quietly last month.
One of the big political divides in the election is on tertiary education policy, but it is Gareth Morgan’s The Opportunities Party (TOP) which is most explicit on the need for change to foster ‘‘lifelong learning’’.
The education sector must change to enable people to ‘‘stay capable of earning at a level they desire and in occupations they enjoy’’, says Morgan’s party.
TOP’s priority is to ensure massive taxpayer funding isn’t impeding the tertiary sector’s ability to adapt from its ‘‘start of adult life’’ model, to a ‘‘whole of adult life’’ provision.
Morgan believes Singapore may provide the way forward, providing vouchers people can spend over their working lives at approved educational institutions like universities and polytechnics.
This could support the development of what Velegrinis calls an education ‘‘passport’’ where, instead of start-of-adult-life degrees from a single university of polytechnic, learners pick and choose courses from many, building the qualifications they need, and topping them up when required.
In time, some predict that tertiary education will become a truly global enterprise.
Whatever the future holds, learners foot a lot of the cost of retraining and topping up their educations themselves.
ASG’s fund lets people save a minimum of $50 a month, with cash invested in a mix of cash, bonds, shares and property. ASG, which is a not-for-profit memberowned friendly society, charges annual fees of 1.67 per cent of the savers’ balance, and an administration fee of $60, though the scheme has tax advantages for investors (subject to an Inland Revenue review, the product disclosure statement says).
Investors need to beware, though. The money is saved for education. Withdrawals for other reasons result in only the return of capital invested, not investment returns.
Families have many ways to save (bank accounts, funds, rapidly paying off mortgages, etc), and all investments carry risk, so savers must weigh up the pros and cons of each option available to them.
One man facing that prospect is 46-year-old Neil Lal. He’s Australian. He works for ASG as an ‘‘education consultant’’ going into families’ homes to help them set up education savings plans.
‘‘The importance of education has grown so much in the last 20 years,’’ Lal says. ‘‘Gone are the days of our forefathers working at one place for all their working lives.’’
Lal did not go to university before entering the workforce, and starting a family (three children aged seven, 11 and 13). He now harbours a burning ambition to further his career through further study, namely gaining a diploma in mortgage lending, which he hopes will be a stepping stone to a business degree.
‘‘There’s no job security. You need to keep upgrading yourself, which means keeping going back to improve your education,’’ Lal says.
Lal was the first to sign up with ASG’s Australian Pathway scheme when it launched there in 2015, two years before the New Zealand version was unveiled.
There are human benefits to continued learning, quite apart from increased job prospects.
Velegrinis says: ‘‘As individuals we never stop learning and to quote Henry Ford, ‘anyone who stops learning is old, whether at 20 or 80. Anyone who keeps learning stays young’.’’