How to save for your child’s university costs
University can be expensive, but planning ahead could make the cost more manageable. Explore how much you may need to save for university and how regular investing can help you build a fund for your child’s education.
A university degree can be a valuable investment in your child's future, but it can also come with a significant price tag.
The good news is that saving towards those costs doesn't have to be overwhelming. Starting early and contributing regularly can help make university more affordable when the time comes.
So, how much might you need to save for university? In this article, we break down the main costs and explore some practical considerations when saving for your child’s future education.
How much does a university education cost?
The cost of university extends well beyond tuition fees. A typical three-year undergraduate degree could involve:
- £29,370 in tuition fees (£9,790 a year from the 2026-27 academic year1)
- around £1,140 a month in living costs, according to the latest National Student Money Survey2
Over a three-year course, living costs alone could amount to around £40,000, although the exact figure will depend on where a student lives and their lifestyle.
To help meet these costs, many students rely on tuition fee and maintenance loans. Those who borrow the maximum amount available could graduate with more than £60,000 of student loan debt if they study outside London, or more than £70,000 if they study in London3.
How can you save for university?
Not every graduate will repay their student loan in full4, but many parents are uncomfortable with the idea of their children starting adult life with significant debt. As a result, many families choose to start saving early.
A Junior ISA can be an attractive option because it allows up to £9,000 a year to be invested tax-efficiently5.
Benefits of a Junior ISA
- family and friends can contribute
- investments grow free from income tax and capital gains tax
- designed for long-term savings goals
Things to consider
- only a parent or legal guardian can open the account
- the money legally belongs to the child
- once the child turns 18, the account passes into their control and they can decide how to use the money as they wish
The fact that the money belongs to the child puts some parents off. An alternative option is to invest through your own ISA, although other family members can’t contribute directly.
How much could you build up in a Junior ISA?
Few families will be able to contribute £9,000 a year, particularly if they have more than one child. But even relatively modest contributions can build up over time.
Our chart below uses a more realistic example. It assumes an initial investment of £1,000 and monthly contributions of £100, which increase by 2% a year to keep pace with inflation6. Assuming investment growth of 5% a year after fees, the value of the Junior ISA is worth just over £18,500 after 10 years.
Notes: This hypothetical scenario is for illustrative purposes only and doesn’t represent a particular investment or its expected returns. It assumes annual returns of 5% after fees.
Source: Vanguard
If you’re really organised, you could start saving from birth. Using the same assumptions as above, but over 18 years, the pot could grow just shy of £43,000.
Notes: This hypothetical scenario is for illustrative purposes only and doesn’t represent a particular investment or its expected returns. It assumes annual returns of 5% after fees.
Source: Vanguard
Either savings pot could help ease the financial burden of university, whether that's covering tuition fees or, in the case of the larger pot, helping to meet both tuition and living costs over the course of a degree.
If there are any savings remaining after graduation, they could be earmarked for future goals such as a house deposit.
So, should I save for university costs?
There isn't a right or wrong answer. Student loans mean many people can attend university without paying the costs upfront, and not every graduate will repay their loan in full.
But having savings available can provide valuable flexibility. It could help your child focus on their studies rather than taking on extra work, support further education after graduation or simply give them more options as they start adult life.
And if university doesn't end up being the right path, the money could help fund other goals, from professional qualifications to a first home.
1 The maximum tuition fee for a standard full-time undergraduate course is £9,790 for the 2026-27 academic year. This is due to rise to £10,050 for the 2027-28 academic year. For more information, visit the Department for Education website.
2 Student living costs in the UK 2026. Save the Student. 1 October 2025.
3 Visit the government’s website for information on student finance for undergraduates.
4 Not every student will repay the full loan amount. For the 2026-27 academic year, most graduates will only begin making repayments once their annual income goes above £25,000. Any remaining loan balance will be written off 30 or 40 years after the April you were first due to pay or when you are 65, depending on what plan you are on. Visit the government’s website for more information on repaying your student loan.
5 Information correct as of 2026-27 tax year.
6 Inflation is the rise in prices for goods and services over time, meaning your money buys less than it used to.
Investment risk information
The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Any projections should be regarded as hypothetical in nature and do not reflect or guarantee future results.
The eligibility to invest in either ISA or Junior ISA depends on individual circumstances and all tax rules may change in future.
Important information
This is a marketing communication.
Vanguard only gives information on products and services and does not give investment advice based on individual circumstances. If you have any questions related to your investment decision or the suitability or appropriateness for you of the product(s) described, please contact your financial adviser.
This is designed for use by, and is directed only at, persons resident in the UK.
The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information does not constitute legal, tax, or investment advice. You must not, therefore, rely on it when making any investment decisions.
Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.
© 2026 Vanguard Asset Management Limited. All rights reserved.
5805441