Investment Offshore Guide
oThis guide could be of interest to anyone, whether or not resident in the UK, although it will most likely be of more use to those who are resident or domiciled abroad.
Family
There are many reasons we might want to save for the future. Some have a greater propensity to save than others!
The Considerations of an Expatriate
If you are an expatriate there a number of points worth considering when determining the right path for the educational needs of your child:
- Are you in an environment where the local education standards differ greatly from the standards that you would like to achieve for your child?
- What choices are available to you?
- Are you living in an environment that is not 100% safe or stable for your child?
- Could this adversely affect their educational development? If so what action can you take to protect your child’s educational needs?
- Culturally, morally or religiously does the environment in which you live match your family’s beliefs and ideals? If not, what can be done to safeguard your child’s social welfare?
- Are the educational, extracurricular and social facilities offered locally wide enough to encompass your child’s personal needs, talents and desires?
- Is the language in your country of residence going to prove a barrier or a retardant to your child’s learning?
- Do the standards of qualifications achievable in your country of residence compare favourably to the standards back home?
- Do the standards of teacher qualifications in your country of residence compare favourably to the standards back home?
- Is there a potential for the repetition of any educational or social disruption to your child if your job or that of your partner means that you will regularly have to travel or relocate?
- How can you overcome any worry or anguish involved in potentially sending a child away from their family?
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Remember:
. YOU ARE IN A BETTER POSITION, FINANCIALLY, THAN MOST OF THE PEOPLE BACK HOME TO DO SOMETHING ABOUT THESE ISSUES.
The considerations at home
- The country in which you live, the town in which you live, even the area of the town in which you live can all dictate the standard of education that your child will be entitled to.
The considerations that you need to have in mind should encompass the following points:
- Are you happy to be at the mercy of the local education system?
- Is your government doing enough to fund and develop and improve state schools?
- Do the best local schools guarantee places to the best pupils?
- Does your child stand a chance of getting the education they deserve?
- Are you happy to leave your child’s education to chance and play the lottery of the state school?
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If only those children who leave education with the best qualifications stand a chance of getting the best jobs, will your local, state funded school provide your child with the best chance to achieve the best qualifications, or their best potential?
Class sizes, teachers’ abilities, facilities, availability of extra curricular activities for social and personal development are all factors affecting your child.
Recognition, appreciation and ability to help those with special needs at one end of the scale, and specially gifted children at the other end of the spectrum.
How do you ultimately decide – PRIVATE OR STATE EDUCATION?
There are 3 clear points that you need to cover in your own mind:
- You need to make sure that you understand how important it is to you that your child has a good education.
- Then you need to understand what that means to you in terms of selecting the right school and the right schooling method.
- Finally you need to accept that it is down to you to take the responsibility of providing your child with the educational opportunities to set them up for life.
If private education is your decision, what next?
Having decided that due to your own personal circumstances a private school education is the best option for your child, you now need to find the best school.
The number of private schools available at home and abroad is vast. To make your choices, and ultimately your decision easier, focus on the basic considerations of what type of school will best meet the needs of you and your child. You can use the internet, library and personal recommendation as starting points to narrow your search. Then contact a short list of about 10 schools for their brochures and detailed information.
Make sure you gather information on the average academic achievements of the school’s pupils at each key stage of development and testing. Examine the school’s facilities, security arrangements, pupil welfare programmes – everything that is of importance to you and your child. If you are thinking of sending your child overseas or back home to be educated will the school assist with the logistics of travel, what weekend activities are available for them, are there other pupils who will be in the same situation as your child, how easy will it be to communicate with your child?
When you have further reduced your short list, visit the schools that you are interested in with your child, and visit during term time. Get a feel for the atmosphere and talk to pupils and staff. Make sure you, and ideally your child, are comfortable with the school. Watch for their reaction as you tour around.
THE COSTS OF EDUCATION.
Fees charged in different countries and across the different institutions can of course vary massively.
General Considerations
As an example for you to base preliminary financial considerations on:
In the United Kingdom average private school fees in 2004 were just over £3,000 a term for education, that’s at least £9,000 a year. In the United Kingdom average boarding fees in 2004 were just under £6,000 a term in addition to education, that’s at least £18,000 a year.
The demand for private schooling in the United Kingdom in 2004 is up for the 9th year in a row.
Carefully examine the registration, entrance and school fees together with boarding fees and extras when you research your preferred schools. If you have more than one child then obviously multiply costs applicably. Also take into consideration inflation if you are planning ahead for the education of a young child – and inflation in educational spheres is currently running at about seven and a half percent per year.
Consider inflation again when adding up the number of years your child will need schooling for and you can quickly and easily come to a large and frightening sum of around £100,000 per child for average school fees alone.
Affordability
The benefits of providing your child with the very best start in life must outweigh the costs – both emotionally and financially. On an emotional level you want to make sure that your child is given every opportunity to fulfil their potential and that their school life will be both enjoyable and productive – that makes you a great parent.
On a financial level there are many options available to you when it comes to the planning, saving for, financing of and enabling your child’s education.
As an expatriate there are advisers who can help you find and arrange savings and investment plans to provide the money you will need to pay for your child's education – make use of your offshore advantages – you’d be MAD not to!
Plan now. If you want to start saving or want to put away a lump sum to cover the investment in your child’s future, today couldn’t be a better day to start.
In this instance it really is a case of not putting off until tomorrow what you can do today – can you afford to neglect your child’s future?
This obligation does not end in high school; this obligation carries on throughout higher education as it is only through the provision of a complete, comprehensive and well rounded education that we can expect our children to grow into the free, independent and forward thinking adults that we hope they will become.
Further Education
- The fees applicable for university will depend upon:
- The class of institution your student child chooses.
- Their chosen subjects of study, and eventual career.
- The country in which they want to study and whether or not they are going to be classed as an overseas student.
- The city in which they want to study etc., etc.
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As a guide on which you can base your considerations please note that the total cost of a university education has doubled over the past five years and the average university course is now 4 years.
If you are an expatriate and your child will be studying overseas here are some example costs:
UK :
- The education fees for an average science degree are £8,200 per year
- The education fees for an average arts degree are £6,303 per year
- The average living expenses for the academic year (September to June) are £6,600, add to this a flight, holiday and a little money for clothes and fun and it can easily amount to £17,000 plus per year.
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USA :
- The education fees for an average degree from a private low cost university are US$12,000 per year
- The average living expenses for the academic year are US$10,000
- Of course when it comes to living expenses they are different for each individual depending on their lifestyle and the city in which they study.
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THE GENERAL POINT IS THAT THESE FEES WILL ONLY RISE AS STATE FUNDING COLLAPSES.
The cost increase is likely to be further compounded as the state actively encourages our children in to further education and university places come at a premium due to supply and demand. In the UK nowadays, 1 in 3 children enter higher education compared to 1 in 20 in the 1960s and it is fair to assume that this number will not reduce. Added to these facts, you have to take into account inflation of course - and the cost of education is currently growing way beyond the rate of inflation at around seven and a half percent per annum in the West. Though, if you simply base your future figures on inflation alone this could double the money required to finance your child's higher education.
PLANNING TO REMOVE THE FINANCIAL BARRIERS/ CONSTRAINTS.
In a comprehensive survey by the University of Glasgow it was found that for most students the university tuition fees are not the main problem when it comes to deterring high calibre students from achieving their educational goals. More students and their families were put off the thought of higher education by the potential debts
that would be incurred from the ever rising accommodation and utility costs, travel expenses, books, equipment and lifestyle costs. It seems that debt rather than beer is uppermost in the modern student’s mind. As the average graduate, leaving in 2002 left university with a debt of £10,000 you can see why! Leaving university under a mountain of debt that will engulf finances for many years is not an attractive prospect, and as a result students are opting for cheaper, shorter courses closer to home. Quite simply, they are not being afforded choice, freedom or the ability to fulfil their potential.
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