The flyer covers the following information you can share with your clients:

Tax effective savings options for child’s education

The rising costs of education means that funding a child’s education is becoming the second largest expense outside of paying the mortgage on the family home.  In 2012 it was estimated to cost a middle income family $812 000 to raise 2 children from birth until they leave home (AMPNATSEM report on the cost of kids). This was up from $537 000 only 5 years earlier.

Funding school fees

Estimate how much you’ll need based on the age of your kids are, understanding if you want to send them to private or government schools.  Also the amount will differ if you’re saving for their primary, secondary or tertiary education – or all three. Primary schooling will cost less than secondary and tertiary schooling.

Start early

The best time to start saving is when your child is born or even earlier. Set a budget and determine how much you are able to put aside each week. You might also want to consider Increasing  the amount each year to account for inflation.

There are a few ways you can achieve your savings goal. It could be as simple as setting up a direct debit from your account and deducting a weekly amount into education savings. You could also make lump-sum contributions, such as your annual tax refund.

Many parents and grandparents face the challenge to find an investment that is tax effective whilst also meeting their savings needs.  An investment bond is an effective product worth considering.

Visit www.centuria.com.au to explore an online calculator to assist parents and grandparents understand the outcomes they can achieve from the savings plans they put in place for their children.

Download the flyer here.

The post Is there a tax effective option for saving for my child’s education? appeared first on AdviserVoice.

Parents need to plan for education costs.

Despite government plans to direct further funding to education, parents’ concerns about the increasing cost of their children’s education are not over, warns Matt Walsh, head of Lifeplan.

“The cost of education has been steadily increasing for some time now and there is no reason to expect this to change in the future,” Mr Walsh said.

“Increasing State and Territory acceptance of the Gonski model for school funding might suggest to parents that the cost of their children’s education will fall, but in my view this is unlikely to be the case.

“There are two major aspects to education costs to consider which indicate the burden of these costs will continue for parents.

“Firstly, there is the increasing cost of education as a whole, which is outstripping rises in the consumer price index (CPI) by a rate of more than two to one*.

“For the 12 months ending June 2013, education costs rose by 5.7 per cent whereas the CPI rose 2.3 per cent.

“This is a major trend that has been consistent for over a decade. The Gonski model is not designed to ameliorate this.

“Secondly, the main objective of the Gonski model is to improve the standard of education – particularly in disadvantaged schools – rather than evenly fund increases to all parts of the education system.

“Overall, despite the optimism being created by the Government putting more into education, parents with children at school shouldn’t expect to see much difference to their costs, and shouldn’t be complacent. This will be particularly acute for parents seeking private schooling for their children.

“Parents should still consider starting to save in advance for their children’s education, even if it’s just a small amount each week, as this can add up to quite a lot over time,” Mr Walsh said.

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