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Setting up for success: Why education may continue to pay

25 October 2017HighlightsEquities
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Setting up for success: Why education may continue to pay

  • 2013 research indicates that graduates earn £250,000 more than non-graduates in a lifetime
  • Factoring education costs into your investment plans may give your children greater future opportunities

A study by the Department for Business, Innovation and Skills in 2013 indicated that graduates could earn a lifetime average of £250,0001 more than their non-graduate contemporaries, and today education can be still seen as imperative for setting your child up for the best possible future.

Indeed, with artificial intelligence, augmented reality and other means of automation increasingly becoming the norm, FutureScape: Worldwide Robotics 2017 Predictions suggest that developed nations are to rely on education more than ever before to remain competitive2 – as well as to nurture the next generation of innovators.

That also means that coding, programming and other science-based disciplines could be needed more in the future than ever before. While the UK Government say that medicine and dentistry3 are seen as the most valuable degrees to hold in 2017, subjects such as engineering, mathematical sciences and computer sciences are also among the top 10 most valued degrees. Any surge in demand for these courses could increase their value too.

Students are seeking opportunities abroad

The benefits of a degree could stretch far beyond earning power, however. Further education may provide undergraduates with a broader view of the world – particularly if students choose to study abroad.

Upping sticks to study abroad is becoming more common too – in the past four years (from 2013 to 2017), students applying to US colleges from the UK has increased by 31%. 11,600 British students are already studying across the pond according to educational organisation Fulbright Commission, and this figure will only increase in the coming years.

In addition, making international contacts while studying may create ample opportunity for future business opportunities.

In a recent webinar, Citi spoke to experts on the future of education, where the importance of nurturing contacts at university was discussed– especially where science, technology and mathematics subjects are concerned.

When asked about the desired skills of the future, Ayesha Khanna, co-founder and CEO of ADDO AI, said that contacts are important to remain competitive. "Technology is a way to tinker and to innovate. That is the future of education – using technology as a language for creativity, and then using collaboration as a way to come up with new ideas."

The rising cost of education

In spite of Theresa May's proposed freeze on tuition fees, a study by the Institute for Fiscal Studies suggests that today's students are expected to graduate with average debts of £50,8004. If reforms go ahead, they'll start to repay this once they earn more than £25,000 – though the current threshold stands at £21,000.

However, US college fees are even more expensive – after factoring tuition and board, Harvard typically costs £46,000 per year5, for example.

With the possibility of costs continuing to rise, factoring your offspring's education into your investment planning could help to stand them in the best stead for the future, and this is something Citigold can help with.

"In consultation with our client's tax advisors, we have recently helped our clients with school fees planning", says Citi Relationship Manager, Christopher Paris.

"It gives my clients great comfort knowing they have the most suitable tax efficient structure in place when passing down their wealth."

To help manage your wealth on your terms, Citigold can offer help and advice tailored to your life ambitions.


1 http://www.bbc.co.uk/news/uk-politics-40965479

2 https://www.theguardian.com/technology/2017/jan/11/robots-jobs-employees-artificial-intelligence

3 https://www.thetimes.co.uk/article/which-degrees-produce-the-highest-and-lowest-salaries-9bcbnvwt0

4 http://www.bbc.co.uk/news/education-40493658

5 http://www.telegraph.co.uk/women/life/british-students-heading-america-elite-education/

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