Back to school benefits from Foresters

Tuesday, August 13, 2013

With A level results released on 15 August and GCSE results announced the following week, thoughts will soon be turning to the next stages of a child's education. For some it will be a new school term, for others university and the first steps in to higher education. The new academic year means new uniforms, new books, and for university students, new accommodation - all of which cost money.

Much has been written about the rise in the cost of higher education. In fact, research from the National Union of Students suggests that the average cost of sending a student to university for the 2012/13 academic year was £22,189*. This breaks down as roughly £10,133 for course costs and £12,056 for living expenses. However, less well publicised has been the steady increase in the cost of putting a child through school. According to the latest Aviva 'school sums' index the cost of sending a child through state school has risen by 11% in the past five years and now stands at £22,596**. This doesn't include a possible additional £1,268 per year in extra-curricular activities such as music lessons.

With this in mind, it is important to start saving early to meet the rising costs of education and ensure your child isn't saddled with an unbearable amount of debt. Foresters Friendly Society has a range of long-term, low cost savings products which can help parents do just that. One example is the Foresters Tax Exempt Savings Plan (TESP) which provides a tax-free way of saving towards mid to long-term goals and can be held in addition to an ISA.  Tax Exempt Savings Plans are only offered by friendly societies and provide savers with an extra £300pa of tax-free savings.

Benefits include:

  • Guaranteed return - a guarantee to get back at least what has been paid into the plan, providing contributions are maintained for the full term of the plan;
  • Tax-free cash lump sum - on maturity, under current HMRC guidelines, the policyholder will receive a cash payout free of Capital Gains and Income Tax;
  • The option to save £25 per month with a choice of how long for a minimum of 10 years up to a maximum of 25 years;
  • Potential for growth - with the addition of annual bonuses and a final bonus, although the addition of bonuses is not guaranteed.

In addition and, in keeping with the traditions of friendly societies, Foresters offers a range of member benefits, some of which are designed to help members with education such as The Foresters Educational Award which is a discretionary grant of up to £220 a year available to members over 16 and studying full-time in further education which can amount to a helpful sum over a 2-3 year course.

Neil Armitage, Marketing Director at Foresters said: "Foresters was set up in 1834 with the aim of making a positive impact on the lives of its members.  In today's world, our benefits, such as the Educational Awards, mean we are doing just that by giving a helping hand to people of all ages who wish to continue their education and succeed in their working lives. Over the last six months alone, we have paid out 95 grants to studying members.  What's more, our long-term savings plans, like the TESP, can be set to mature at a time that meets the individual's needs, helping them to save for future costs such as higher education."

Tax rules may change and will depend on individual circumstances.  Inflation will reduce the spending power of the money saved in the future.