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Paying for uni: invest £175 a month for a £56,000 savings pot

Joanna Faith
Written By:
Joanna Faith

If your children are young, packing them off to university may feel a lifetime away. But if you start saving early, you could build up a pot of more than £56,000 – enough to cover today’s university costs.


Research from Fidelity showed that investing £175 a month into a stocks and shares Junior ISA from the moment a child is born could hypothetically generate a pot worth more than £56,000 by the time they are 18.

In a similar scenario, a monthly saving of £100 could generate returns of £32,000 – more than three-years’ worth of tuition fees, while saving £50 a month could generate returns of £16,000.

The calculations assume a steady 5 per cent annual growth rate.

Emma-Lou Montgomery, associate director for personal investing at Fidelity International, said: “Planning your child’s financial future may not be the most of your immediate priorities when you’ve just become a parent, however it could be one of the most beneficial things you do. Whether they end up going to university, starting a business or travelling the world, knowing that they have a nest egg with which to achieve their dreams will give you peace of mind.”

The findings come a week before thousands of students receive their A-Level results, with record numbers awaiting confirmation of a university place, according to UCAS.

For many, it will be the first time they’ve had to manage their finances on their own.

Here are Emma-Lou’s top money tips for students:

  • Know your budget: For returning students, it’s a good idea to write down how much rent, bills, and food costs are so you can avoid overspending. If you’re just starting out, then take some time before you leave home to work out a weekly/monthly budget that will work best for you. Whatever savings can be kept aside as part of an emergency fund will also prepare you for any unexpected surprises or welcomed opportunities.
  • Reap the full benefits of being a student: Starting university, especially when some of your courses could still be online, will mean that investing in good technology may be crucial to accessing certain lectures. Make sure that you shop around for deals and use any student discounts available. Before making any expensive purchases, make sure you know exactly what is needed. When it comes to books for your course borrowing from a library where you can or buying second hand will save make it significantly cheaper. In addition, booking an appointment with your bank to see what options there are for student bank accounts could also help you to understand your finances.
  • Part-time jobs: The jobs market has felt the repercussions of the pandemic, so preparing now will ensure you’re in the best position to start applying. Make an appointment with the careers department at university to look at your options and see whether you can join any societies or a job around university or the holidays to give you the experience that you need. Working part-time on campus or at home could also give you some extra independence and boost your income.
  • Educate yourself: Money management is a crucial part of everyday life. Given the disruption caused by the pandemic and impact to younger people’s earning opportunities, it’s vital you spend time getting to grips with how to make your savings work for you. Fidelity International’s research found 47 per cent of those in their 20s are worried about their financial situation since the start of the pandemic. Understanding different types of bank accounts, savings and investments will put you on the right path for the future.