Dubai: Parents in the UAE need save more and start saving early if they have to achieve the educational aspirations of their children, according to a recent HSBC study.
With the increasing cost of higher education around the world, research from HSBC reveals that a vast majority (67 per cent) of parents in the country are not adequately prepared to fund the high aspirations they have for their children’s education.
“Even though we see that four out of five parents (82 per cent) believe their children’s education is the best investment they can make, less than a third (31 per cent) are able to allocate their funds towards this goal and over half (56 per cent) find this a daunting process. This highlights that there is clearly a lack of understanding about how they can go about developing a dedicated financial plan to meet the long-term,” said Andy Ripley, Head of Retail Banking and Wealth Management, UAE, HSBC.
The HSBC study analyses the cost of international university education in 16 countries across the world, by examining the average cost of living and university fees, as well as the countries perceived to offer the highest quality of education according to parents in the UAE.
It shows that of the top five countries rated the highest in terms of the quality of education; three are among the most expensive; highlighting the need for parents to have a long-term plan in place if they have high ambitions for their children.
Given the UAE’s high expatriate population, it is not surprising that nearly two-thirds of parents (65 per cent) here are considering sending their children for university education abroad, and have varying views on which country provides the best quality of education.
The UK and the US are jointly rated the highest with 60 per cent of people ranking both countries for having the best universities, followed by Canada (37 per cent).
HSBC’s research shows that the annual cost of sending a child to study abroad, including university fees and the cost of living, is $36,564 in the US and $35,045 in the UK, which are among the top two most expensive destinations in the world.
Even in the UAE, which is rated third best globally by UAE parents in terms of its educational quality, the total cost of an international university education is $30,472, making it the sixth most costly surveyed.
Despite the high costs, nearly 9 out of 10 parents (86 per cent) desiring their children to study to a postgraduate level — the vast majority are alarmingly unprepared to support these aspirations. Two-thirds (67 per cent) wish they had begun saving earlier, while virtually all (99 per cent) fund their children’s education fully or partially through their current income.
“Parents must understand the significance of saving early; it makes a world of a difference. With only 1 per cent of parents in the UAE being able to rely on specific education plans, it is evident that there is a lot of potential to address this problem by implementing an astute investment plan,” said Ripley.
The most popular university degrees for people in the UAE, according to another report from HSBC, are business and engineering, which are typically more expensive than non-vocational degrees.
