New School Term Begins And Parents Not Saving
Monday 2 May 2005
NEW SCHOOL TERM BEGINS AND PARENTS NOT SAVING
Three out of four parents want their children to have as good or better an education than they had - but only half are saving for it.
Results from a new survey show while parents have high aspirations for their kids - 92% want them to pursue tertiary study and 73% want them to have as good or better an education than they did - only 54% regularly save for their children's education.
The survey, commissioned by Manchester Unity Friendly Society in conjunction with today's launch of its education savings product, also shows a quarter of parents have no idea how much tertiary study costs.
With students facing a combined debt of more than $7 billion and fees rising by as much as 10% a year, Manchester Unity's chief executive Peter Schumacher says the results are worrying.
"Although parents have big dreams for their children, most haven't got the money to pay for them. These results confirm what we've suspected for a long time - that many New Zealand parents are not saving for their children's most important years," Mr Schumacher says.
Secondary education costs are also growing. A recent newspaper survey found annual state school 'donations' were as high as $740 per child, while at one Auckland integrated school, parents were paying as much as $1496 each child. With school uniforms, stationary, travel, school trips and extra-curricular activities, parents are struggling with ever-increasing costs.
Of those people said to be saving for their children's future, results show less than one in five parents are using a specific education savings plan. The most popular form of savings is a multi-use bank account and this is a concern, Mr Schumacher says.
"The benefits of a dedicated education plan are that the money can't be touched for other purposes. For example while education savings ranked as a top priority for parents, so did saving for holidays - so risk of dipping into funds for other uses is high," he says.
The survey, conducted by Versus Research, also showed Aucklanders are the best savers in the country (68% said they were saving for their child's education) while Hawke's Bay parents were ranked at the bottom of the list with less than half (46%) of parents saving.
"Both secondary and tertiary fees are getting higher and debt is increasing. Parents need to take action and support those future leaders of tomorrow by starting to save today," Mr Schumacher says.
Manchester Unity's Education Support Plan, launched today, has two policies - a secondary and a tertiary - which, for very low contributions, generate interest and provide returns when the child reaches secondary or tertiary level education.
For everything you need to know about education planning and saving visit the new www.easyeducation.co.nz website or phone Manchester Unity on 0800 101 842.
Other key statistics from the Manchester Unity survey:
* Of those parents who said they saved, holiday and travel ranked alongside education at 22%. Saving for a mortgage or house was the next highest at 12%.
* Most people (81%) think the Government should be responsible for at least covering basic secondary education costs (35% "strongly agreed" and 46% "agreed").
* In general, most parents thought tertiary students shouldn't have to pay for their education (71% disagreed or strongly disagreed that it was "a good thing for all tertiary students to pay for their education).
* While people were divided as to whether education standards were higher now than "in their day", Wellington parents seemed to feel standards were lower - less people (only 3%) strongly agreed that educational standards had improved compared to 'their day' than in Auckland, Waikato and Otago/Southland and 51% disagreed or strongly disagreed that standards were higher now.
* Auckland parents are more likely to send their children to a private/boarding school - up to a third are considering this form of secondary schooling. Otago/Southland has the highest percentage of parents planning to send their kids to a state school.
* More than a quarter of parents surveyed did not know how much it would cost per year to send each child to university/polytech. Regional comparisons showed in the Waikato, 35% of parents said they did not know how much it would cost, compared to just 17% in Wellington. Estimates of cost were also higher in the capital - 6% of Wellington parents believed it would cost between $31,000-$40,000 per year while a further 17% believed it would be between $21,000-$30,000.
* Of those people who said they had started saving for their child's education, 60% said they started when their children were one year old or less.
* Most respondents (59%) who were saving said they were using a bank and savings account. * More than one in three respondents said they would definitely or maybe join a specialist education fund to fund their child's secondary education. Just under half (46%) said they definitely or maybe would join a specialist education fund to fund their child's tertiary education.
* The sample size was 612 across six regions of New Zealand. The margin of error was +/-4% overall. Between the regions, the margin of error ranges between 9.5%-9.8%.
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