South Africa:Two-thirds of parents underestimate education costs

Parents consistently rank education among their highest priorities, second only to housing. Even when finances are under pressure, many are willing to sacrifice lifestyle spending rather than compromise their children's education, according to Ms Lytania Johnson, CEO of First National Bank (FNB), the oldest bank in South Africa.

In a message in the inaugural 2026 “FNB Education Insights” report, she adds that the challenge, however, is not commitment: it is planning.

Nearly two-thirds of parents underestimate the true cost of education, while many only plan one or two schooling phases ahead, despite expecting to support their children through tertiary education.

Costs extend well beyond school fees to include uniform, transport, technology, extracurricular activities and other expenses that increase over time. Despite some parents having some form of financial plan in place to cover these future costs, many still rely on their current income to meet them in the here and now.

But what families need is not just financial products; they need guidance that helps them understand the true cost of education, plan for future milestones and make informed decisions as their circumstances evolve.

Many families, for instance, are well prepared for the financial impact of death – through life cover or a pension payout – but far less prepared for the everyday disruptions just as likely to derail an education plan, such as serious illness or a sudden loss of income.

Ms Johnson said, “Helping families anticipate these risks and making informed choices ensures their children’s education plans remain on track to fulfill their long-term goals, no matter what lies ahead."

In exploring the question, “How are South African parents paying for their children’s education costs?”, the study finds that four distinct household profiles emerge from the data, each with its own cost pressures. They are:

The findings also show:

-For those who want to feel prepared

• 50% of parents with a plan are motivated by a desire to feel more prepared.

• More likely to pay fees from a dedicated education savings or investment product.

• Claim a plan for a broader range of contingencies, and greater reliance on a wider mix of savings and investment products.

-For those who are prepared

• While 87% of parents claim they have a plan for their children’s education, only 24% are truly prepared, with education costs meeting or falling below their expectations and unexpected costs occurring no more than once a year.

• Less likely to be triggered by cost-visibility factors; rely on advice from advisors rather than friends.

• Show less reliance on bonuses – in the plan, in current payments and in contingency plans.

-Structured plans

• 60% of structured planners are highly confident about covering their child’s education costs through to tertiary versus 38% with only a general plan.

• One in three parents with a structured plan are happy with their planning and wouldn’t change anything versus one in four with a general plan.

Protection as part of education planning

FNB Insurance CEO Mr Himal Parbhoo said, “While many parents believe they have contingency plans in place, our research shows these plans often rely on general household savings or resources that must compete with other priorities during times of financial stress."

He added, “Income disruption remains one of the greatest risks to education continuity. Families who rely solely on monthly income to fund education may quickly find their plans under pressure if unexpected events occur.

“This is why protection should be considered a core part of education planning rather than an optional extra.”