Parents in the UAE expect their children’s future education to cost up to Dh600,000, according to a survey by market research company YouGov, commissioned by education savings plan Zurich International Life. This highlights a critical financial gap that could affect the educational opportunities available to many children, experts said.
The data reveals that parents expect higher education costs to range anywhere between Dh250,000 and Dh600,000.
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“While the substantial costs associated with higher education underscore the urgent need for effective savings strategies, starting early and choosing the right education savings plan can be a game-changer in helping parents save today for their children’s happily ever after,” said David Denton-Cardew, head of propositions at Zurich in the Middle East.
Many parents are financially unprepared for these expenses as the survey revealed that 29 per cent have yet to begin saving for their children’s university education.
Father of two Adil Eshack is one person who has begun investing for his daughters’ future education.
“My dream is to send them to the US for their graduate studies,” he said. “To plan effectively, I began researching the current costs of a quality four-year graduate programme. The expenses extend beyond tuition and include housing, food, and general living costs. Based on my research, I estimate that these costs would amount to approximately $60,000 to $65,000 per year. This estimate, of course, will need to be adjusted for inflation depending on when they begin their studies.”
Relying on traditional saving methods
Traditional saving methods still prevail in the region, with 77 per cent of the 1,000 residents surveyed opting for bank deposits, while 48 per cent invest in shares.
Adil said he had chosen to invest carefully for education. “As a salaried professional, I’ve chosen to follow the systematic investment plan (SIP) route to gradually build this corpus,” he said. “My SIP contributions are diversified across equity index funds, debt funds, and term deposits.”
According to the survey, most parents believe allocating between 6 and 20 per cent of their monthly salary is sufficient for education savings.
One person who has not set aside such a specific education fund is Emirati father of four Ali Al Mulla.
“As an Emirati, I expect my children to go to government universities just like I did,” he said. “So, having a specific education fund for them is not a priority for me. However, I do have investments so that should my children opt to go to private institutes or abroad to study, I can provide for them. I estimate that their future education should not cost more than Dh300,000 for a four-year degree.”
The survey, however, emphasises that more effective and affordable savings plans are needed in the market to help parents give their children the best chance at getting a good higher education.