Parents need to plan ahead to combat increased student debt

It says that with the introduction of top-up fees, students will stay in debt for longer, so the sooner parents start saving towards the future cost of a child’s higher education, the better.

Commenting on recent estimates that students currently graduate with nearly £13,000 of debts, Jason Hollands, a director at F&C Asset Management, said: “With the introduction of student top-up fees, the figures are set to escalate further so it is vital that parents begin planning well ahead.”

Students can take out a student loan of over £3,000 every year, but debts are likely to rise further with top-up fees, meaning that graduates will have to repay annual fees of over £3,000 plus any student loan.

Mr Hollands said that while the recently introduced Child Trust Fund may go some way to help with future debts, he urged parents to top it up to the £1,200 limit.

He said that even a modest amount invested early on can bring long term benefits for when students get into debt.