Parents step in to ease student debt burden

Parents step in to ease student debt burden

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• Parents step in to ease student debt burden

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• With UK student debt under scrutiny, over one in ten parents (13%) are paying for or saving towards their children's university fees to help them avoid taking on large student debt
• This comes as 13% say supporting children financially has caused them to pay less into their pension, with 16% saying they expect to retire later than planned
• Assuming 5% investment growth, parents might need to save around £130 a month from 0-18 to cover the full cost of fees
• Standard Life shares tips for parents looking to save for their children's future - without sacrificing their own retirement

Against a backdrop of rising costs and renewed scrutiny of student debt, families are increasingly stepping in to fund university, according to new research from the retirement specialist Standard Life. As financial pressures mount and future costs feel harder to predict, for many families, supporting children through university is becoming a long term financial balancing act.

More than one in ten parents (13%) say they are either paying for or actively saving towards their children's university fees, so their children do not need to take on significant student loan debt. Parents with children under the age of 18 are especially likely to be planning ahead, with nearly one in five (18%) already saving towards future university costs, compared with 11% of parents whose children are over 18.

These findings come amid renewed discussion around the long-term burden posed by 'Plan 2' student loans and their impact on people's finances long after they have left university, with the government recently confirming a 6% cap on interest rates.

The cost of covering university fees

For parents looking to fully cover their children's university fees, the sums involved are significant but potentially achievable over time. With tuition fees in England set at £9,790 per year for the 2026-27 academic year, a typical three-year degree costs around £29,000 in today's terms. However, if tuition fees rise by 2% a year, a child born today could face a tuition fee bill of almost £43,000 for a three-year degree by the time they reach university. This assumes fees continue to increase while they are studying, with annual tuition fees rising from around £14,000 in the first year of university to more than £14,500 by the third year.

Spreading this cost over 18 years can make the challenge more manageable, particularly when investing regularly. However, the amount parents need to save each month depends heavily on investment growth, which is not guaranteed.

Monthly savings needed to cover potential £43,000 future tuition fees

^{Assumes saving from birth to age 18 (216 monthly contributions), annual tuition fee inflation of 2%, a target tuition fee fund of approximately £43,000 and an annual investment charge of 0.5%. Investment growth rates shown are before charges. Investments are assumed to be held in a tax-efficient account. Without this, tax on investment growth could increase the amount parents need to save.}

Supporting children is impacting parents' long-term finances

Student loan support forms part of a broader trend in how parents are supporting their children through major financial milestones, often while balancing pressures on their own finances. Two thirds (66%) say they are helping with costs that go beyond day-to-day expenses, while nearly three quarters (73%) say doing so has had an impact on their own finances.

For some parents, this support is already shaping their long-term financial plans. Over one in ten (13%) say supporting their children has caused them to save less into their pension, while one in six (16%) expect to retire later than planned, and a similar proportion believe their retirement lifestyle will be more modest than expected (16%).

Mike Ambery, Retirement Savings Director at Standard Life says: "With the rising cost of higher education and growing awareness of the long-term impact of student debt, it's understandable that many parents want to step in where they can. Supporting children through education is one of many moments that can shift financial priorities, and it's completely normal for saving patterns to change during these periods.

"However, moments like this highlight why long term planning matters as much as short term support. While many parents are focused on helping the next generation, it's important they don't lose sight of their own long-term goals. Retirement can last decades, and even small pension contributions can make a meaningful difference over time.

"For parents supporting children through university, planning ahead, reviewing finances regularly and setting realistic expectations around what support can be provided can all help reduce financial pressure later on. Continuing to contribute what you can afford towards your pension while gradually building savings for future education costs can help families strike the right balance between supporting children today and protecting their own future."

Mike Ambery shares top tips for parents looking to save towards their children's future without sacrificing their own retirement

1. Take a step back and review where your money is going: "For parents helping children through university, costs can quickly add up beyond tuition fees alone, particularly when accommodation, travel and day-to-day living expenses are factored in. Reviewing your income, outgoings and longer-term savings goals can help you understand what level of support is realistic and sustainable for your family.
2. Start saving early, even if it's small amounts: "For parents saving for younger children, putting smaller amounts aside regularly over time can help reduce the pressure of larger university costs later on. Starting early may also allow families to spread the cost more gradually, rather than relying on larger lump sums closer to the time children begin higher education.
3. Consider different ways of saving for future milestones: "Options such as Junior ISAs (JISAs) can provide a tax-efficient way for parents and grandparents to gradually build savings towards future education costs. Building savings steadily over time may help create greater financial flexibility when children reach university age. Have open conversations about university finances: "Talking openly with children about tuition fees, student loans, accommodation and living costs before university begins can help families plan more realistically and avoid unnecessary financial strain later on. Setting clear expectations around what support can realistically be provided may also help children build confidence managing money independently.
4. Continue prioritising your own long-term financial future: "While supporting children through university may feel like an immediate priority, retirement can last decades. Continuing to contribute what you can afford towards your pension, even during periods of higher family spending, can help parents maintain momentum towards their own long-term goals and reduce the risk of financial pressure later in life."

ENDS

Notes to editors

¹ Research conducted by Opinium between 15 January and 21 January 2026 among 4,000 UK adults. Results are weighted to be nationally representative of the UK adult population.

About Standard Life

Standard Life is a retirement specialist focused entirely on retirement saving and income. We are proud to manage around c£317bn in assets on behalf of our 12 million customers, and we champion the belief that everyone's journey to and through retirement can be better.

With our focus entirely on retirement savings and income we want to be the business that people trust to guide their retirement journey, helping our customers achieve better outcomes and greater financial security in later life.

As a FTSE 100-listed group we are using our size, expertise and influence to shape the world our customers will retire into, and are committed to helping three million more customers by 2035, take action towards a better retirement.

Standard Life is a responsible investor with a clear commitment to supporting a more sustainable future. The Group has achieved its net zero goal across its emissions for 2025 and is working towards net zero investment portfolios by 2050 or sooner.

Standard Life is recognised as a leading employer, with long-standing accreditation as a Living Wage Employer, Living Pension Employer and Carer Positive Exemplary Employer and in 2025 became one of Britain's Most Admired Companies in 2025.