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Parents need to start saving for children's future early

19th August 2010 Print

The monthly cost of being a student has risen 28 per cent since 2004, according to analysis by Family Investments, a leading children's saving provider. Full time students now face total living costs of £718 up from £561 in 2004.

If the cost of living continues to rise at current rates, those students starting a degree this year may see monthly costs hit £818 by the time they graduate in 2013, a monthly increase of £100.

Based on these figures, the average student currently requires £8,616 to meet their annual living costs although this could rise to £9,816 by 2013.

Rent is the biggest single expense with the average student currently spending £193 a month on accommodation although this could rise to £250 a month by 2013 if prices continue to rise.

While most costs have seen single figure increases, food prices have risen almost 13 per each year cent from 2004. Since then, the average monthly expenditure on food has risen from £44 to £78.

Students will be relieved to hear that some costs including recreation and transport have actually fallen across this period. In 2004 spending on recreation was running at £51 a month and this has dropped slightly to £49 today, while transport costs have fallen from £85 a month to £72.

Kate Moore, Head of Savings and Investments at Family Investments said: "For those young people receiving their A Level results this week the decision as to whether to attend university may be less clear cut than in previous years. Prospective students face an increased cost of living, the potential for large sums of debt and a flat job market with a surplus of graduates.

"Higher education is an expensive business and these figures highlight the need to plan finances in advance. Those families who have put small sums away each month over several years will be better placed to meet these costs. While it was disappointing to hear the government's recent decision to scrap Child Trust Fund vouchers, we are encouraging the government to keep the tax efficient structure of the product. A CTF is the only savings product that allows parents and families to save specifically for when their children reach this stage of life and begin to consider higher education and leaving the family home."