Education savings

What to consider when appointing beneficiaries of provident funds
June 1, 2016
Protecting your children in the event of your death
June 1, 2016

A3Saving for your child’s education should be no more complicated than any other savings goal. Many education savings products currently being marketed fail in this respect. At FPM we advise all our clients to use a unit trust account and to be disciplined with the required contributions.

Unit trusts offer a simple, cost-effective way of saving money within a personalized investment portfolio with exposure to numerous asset classes and market sectors, both locally and internationally managed by professional asset managers.

When setting up the account FPM will require details of the cash flow needs with the timing being of significant importance. Additional factors to consider would be taking advantage of early payment discounts and extramural expenses. This information will determine the regular contributions required by you over the investment time horizon. The affordability of the calculated contribution is then determined.

The table below illustrates the information required for each child in order to produce a detailed plan.

3A 2016.05.16 Education savings - Diagram 1

Once the analysis is complete the following output is provided with various contribution options being highlighted as follows:

3B 2016.05.16 Education savings - Diagram 2.png

Should you wish to have a custom plan made for your children’s educational needs please do not hesitate to contact our Risk and Wealth Management team at FPM.

A3_Sean FahySean Fahy

Investment Advisor

011 778 9300

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)