Uni plans need a degree of caution
Bank of Mum & Dad may not be best funding option The student loan system can be tricky to navigate.
Last year, the Government announced the launch of a new scheme called Plan 5, which is quite different from the previous system.
With Plan 5, students will start repaying their loan when they earn over £25,000 per year.
This threshold will be frozen until 2027, when it is planned to increase with inflation.
Another change is that the interest rate charged on student loans will be linked to the Retail Prices Index, so it will rise and fall in line with inflation.
And the new system will give students 40 years to repay their loan, instead of the current 30 years.
Parents often want to help fund their children’s university education – but at a cost of £9,250 per year before you’ve even paid for a single textbook, Pot Noodle or any accommodation, the cost is far from trivial.
I have a rule with financial planning that you should organise your present finances first – banking, debt repayment and insurances – and then you should consider your future finances and retirement plans.
Only when both of these are done should you consider others: it’s the “now, then, them” principle.
In economics there is the concept of “opportunity cost”, which considers all the things you miss out on when you dedicate your resources to something.
In my view, the opportunity cost of clearing someone’s student loan is almost always going to exceed the benefit.
Even if your current finances and retirement plans are on track and you are fortunate enough to have surplus money available, you would be better off setting some money aside to help
Parents often want to help fund kids’ uni education – but the cost is far from trivial
your children with future expenditure, such as a house purchase, than paying for their tuition fees.
If you decide to go ahead though, this could mean you have less capacity to help towards their deposit for a first home, meaning a bigger mortgage on terms far less favourable than a student loan – and possibly more time living at home with you or in rented accommodation while trying to save for a deposit.
Another opportunity cost might be a new car when your child starts work, meaning they opt for a finance deal also on terms far less favourable than the student loan.
A more topical (although, admittedly, less prevalent) opportunity cost might be helping to fund childcare for any grandchildren.
Because this averages more than £1,000 per month per child, the eyewatering expense is likely to dwarf almost anyone’s monthly student loan repayment.
If you are keen to support your children, helping with their accommodation and living costs may be a better option and, ultimately, helping them with a house purchase, using a Lifetime ISA, is more appropriate.
The deadline to apply for student finance for the 2024-25 academic year is May 17 for new students and June 21 for returning students.
terracotta pots, none of which had succumbed to frost damage over winter which indicates what a mild but wet time we are having.
But they’d all been busy last year packed with shrubs, bedding and topiary. It was time for a clean out so I emptied them and using the power washer again, I cleaned them inside and out and spread the old compost through the beds as a mulch.
When they were empty and gleaming I put some landscape fabric in the base (this allows water to drain through but compost can’t be washed out), added a couple of inches of pebble and filled them up with a mix of garden centre bought peat free compost and my own concoction from our compost heap.
Next, it was off to the garden centre to see what looked bright and cheerful. I bought tulips that were just coming into flower in pots, Mexican fleabane, aquilegias, astilbes, and bellis. While those are hardy, I also couldn’t resist the vivid blue flowers of Pericallis ‘Senetti’, bright red geraniums and the cheerful pink and white Argyranthemum daisies.
I know I’m early and taking a risk but I have horticultural fleece ready to wrap around them if I hear it’s going to be a cold night and this could be the case right up until the middle of May. I also have vintage glass cloches that I could use to protect them.
There’s one last job I haven’t got around to yet. When you use very big pots, water can be trapped inside because of the weight of the pot, compost and plant. So I’m going to raise every pot on little terracotta legs to allow for better drainage and better air circulation.
You may want to watch all of last weekend’s work in a little video on my Instagram account @diarmuidgavin. Over half a million have so far so it seems I’m not the only one who’s eager to get out and garden.
I’m raising every pot on terracotta legs to allow for better drainage