Counting the cost of education

The FINANCIAL — Most parents see paying for education as the best financial support they can offer their children, according to new research from HSBC.

The FINANCIAL — Most parents see paying for education as the best financial support they can offer their children, according to new research from HSBC. On average, 58 per cent of parents believe that paying for a child’s education is the best investment you can make for your children. The figure is much higher in countries such as Brazil (79 per cent), China (77 per cent), Indonesia and Turkey (each 75 per cent).

An independent research study commissioned by HSBC Retail Banking and Wealth Management (RBWM) questioned more than 4,500 parents in 15 countries around the world.

The Value of Education Springboard for success report reveals that 89 per cent of parents want their children to go to university and 62 per cent want them to study to postgraduate level.  They believe education is crucial in helping to compete for jobs and boost earning potential, according to  HSBC.

But many find it difficult to plan and finance their child’s education. Of parents who fund education, 82 per cent do so from their current income. More than half of parents wish they had started to plan and save earlier for their child’s education.

Parents can also feel overwhelmed by the pressure to make the right choices – 38 per cent say the decision-making process is “daunting”. In Taiwan, the figure is 69 per cent, and in Hong Kong 60 per cent.

The report reveals differences between attitudes in some countries. While the majority of parents in some emerging economies see paying for their child’s education as the best investment, the figure in the UK is just 35 per cent, in France 36 per cent, and in Australia 37 per cent.

It is clear though that across all 15 countries parents view education as a top priority for their children, according to HSBC.

On average, parents say they would ideally allocate 42 per cent of the funds they set aside for their children to education, against 11 per cent to long-term investments and 10 per cent to a deposit for a house.

“Though parents’ ideas about education vary around the world, they believe that a good education can improve children’s opportunities and prospects,” Simon Williams, Global Head of Wealth Management, HSBC, said.