Children as young as 11 are beginning to save towards their higher education costs because they have seen what happened to their older brothers and sisters, according to research* from The Children's Mutual, a leading Child Trust Fund provider.

Almost half of new undergraduates plan to work part-time to help fund their studies, and turning to Mum and Dad is not really an option any more: 78% of parents say they think that the credit crunch will make it harder for them to fund their children through university.

"It is becoming increasingly apparent that we need a sea change in the way that many parents and their children fund university,” said David White, Chief Executive of The Children's Mutual. “For those approaching higher education in the next few years the Government has a clear student finance package in place but, for parents of younger children, one way to stave off the financial nightmares of the current university generation could be to start saving now."

Many young people now show a better awareness of the need for financial planning than their parents, according to the research. Almost a third of 11-18 year-olds are putting money aside for higher education, while a third of parents realise they are not saving enough for their children's futures.
 
"It is great to see that today's teenagers are aware of the costs involved with going to university and are taking steps independently to try and avoid the high levels of debt that are now common amongst graduates,” Mr White said. “But the average cost of three years at university now sits at £40,400 - a huge amount of money for any teenager to find."

Four times as many teenagers are now heading to university than 30 years ago, but many young people and their families are only just starting to realise the financial implications of their higher education aspirations.  The average graduate leaves university with a £17,500 debt and, according to the report, "little hope of paying it off".

Unlike their younger siblings who are saving for the future, many over-18s hadn't thought it necessary to save for university, and think that student debt is "normal". This is despite the consensus among these young adults being that "having such large debts from student loans made it easier to fall into further debt".

"We would encourage parents and the wider family to consider saving as early as possible to help fund their children's university aspirations.  Since the Child Trust Fund was introduced, many more families than ever before have started saving over the long term and that is a very good thing for the future of this country," Mr White said.

Perhaps surprisingly, the research found that young men are more likely than young women to be saving for university (32% against 28%).

*The Coming of Wage Report, compiled by the Social Issues Research Centre.

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