Parents in the UAE anticipate having to spend between AED250,000 ($68,100) to AED600,000 to finance the higher education of their children, according to the findings of a survey by commissioned by Zurich International Life (Zurich), a part of Zurich Insurance Group.
The survey, carried out by market research company YouGov, also shows that despite the significant costs, many parents are unprepared financially as the survey revealed that 29% have yet to begin saving for their children’s university education.
With 63% of respondents anticipating such high costs, the study calls attention to a significant financial responsibility that many families face.
Reliance on traditional saving methods
Traditional saving methods still dominate in the region, with 77% of the 1,000 residents surveyed opting for bank deposits, while 48% invest in shares. However, only a small fraction (14%) of respondents are utilising education-specific savings plans, which are designed to enhance growth and provide targeted benefits for educational expenses.
While conventional deposits offer safety, their typically lower returns may not be sufficient to keep pace with the increasing costs of higher education.
According to the survey, most parents believe that allocating 6% to 20% of their monthly salary is sufficient for education savings. The survey however emphasises that more effective and affordable savings plans are needed.
Value adding strategy
An overwhelming 87% of respondents express strong interest in education savings plans that also offer life insurance coverage. These dual-purpose plans help in accumulating funds for education and provide a safety net that ensures financial security for the family, should the worst happen.