When to start saving for education

The earlier the better! The best time for education planning is around the time your child is born. That way you have lots of years ahead of you to save money in an education fund. If you didn’t start saving for education when your children were born then the next best time is now. Pre-school, primary school, high school and any tertiary education is going to cost money. The trick is not to let the figures scare you.

You’ll probably be able to absorb the school fees in your monthly budget so just focus on saving whatever amount you can on a regular basis. And, if you do run into difficulties you can simply stop your debit order and restart it again when you can (if you invest in a tax free account or unit trust) or make your policy paid up. In both instances you don’t lose your money. Or, if you have a policy you can make it “paid up” which simply means you can stop contributing and leave the policy until the investment term you’ve committed to (for e.g. 10 years) has been reached.

I can’t afford to save for my child’s education…
1 less cup of coffee per week: R100/month.
1 less packet of cigarettes per week: R130/month.
1 less take-away per month: R80/month.

Why save for education?

Because you want your child to succeed

There are hundreds of career options available nowadays, with many more still to come. Just think back a decade or two – data scientists, search engine optimisers and social media lawyers didn’t feature on the “options to study” list and yet today, they are sought after skills!

What’s even better is that training for their preferred career choice is not limited to universities. There are a number of accredited institutions in South Africa that are able to provide the training and qualifications needed in order for your children to start working in a career of their choice.

How much do I need to save for education?

We can’t tell you the exact figures but we can give you a guide.

The cost of education

Education inflation (currently at 9%) is one of the reasons many of us struggle to save enough to cover the cost of school and university fees (and all those extras). Add to that the cost of uniforms, sports gear, music lessons and for some, extra maths and science lessons and you're looking at a rather daunting sum.

Make your money work for you! You want to be able to invest your money where you can get inflation-beating returns. That means investing it in a savings vehicle that provides capital growth (that’s growth for your money) over the medium- to long-term. The more time you have to invest your money the more time it has to grow.

While we can’t predict what your education fund is going to deliver in the future we can look back and tell you what the results could have been. Sindi’s parents started saving R250 every month in the Old Mutual Investors’ Fund shortly after she was born 18 years ago. They now have R229 000 to pay for Sindi’s BCom degree at the University of Cape Town*.

(Source: R250/month in the Old Mutual Investors’ Fund Class R; 30.09.1999 – 30.09.2017)

Sindi’s parents started saving R250/month in the Old Mutual Investors’ Fund 18 years ago. They now have R229 000 to pay for Sindi’s BCom degree at the University of Cape Town.

Expected cost of one year of education in South Africa

Take a look at the table below to get an idea of the costs you are likely to pay for primary, high school and university education in the future.

Education Costs Table

Education Calculator

Try our online education savings calculator to see how much you need to save.

Why Old Mutual?

Old Mutual is over 170 years old which means we’re able to offer you expertise gathered over the years to structure an education plan that’s right for you.

We offer you solid, steady returns to help you meet your retirement goals.

Our fund managers (they're the ones that invest your money) invest their own money in the funds they manage. Now that’s commitment for you.

Saving for education options

Saving for you your child’s education is a medium- to long-term commitment. There are various education funds you can choose from. Some education savings plans are available directly online and others via financial advisers. The table below gives a brief comparison of the products.

OPTION 1 OPTION 2 OPTION 3 OPTION 4
UNIT
TRUSTS
TAX FREE
PLAN
2-IN-ONE
SAVING 4 EDUCATION
SMARTMAX
EDUCATION PLAN
Minimums R500/month R200/month R215/month R350/month
Can I access my investment?
Can I stop my investment if I need to? For limited time For limited time
Can I invest online?
Can I invest via an adviser?
BUY ONLINE BUY ONLINE CALL AN ADVISER CALL AN ADVISER
READ MORE READ MORE READ MORE READ MORE

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Other financial needs you may want to consider:

Saving and Investing
For the future or something special
Learn more
Education
Saving for your children's education
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Retirement
Securing your future financially
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Life Cover and Insurance
Life insurance that offers peace of mind
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Funeral Cover
Covering unforeseen funeral costs
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Loans
Personal loans, debt consolidation
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Banking
Low-cost banking accounts
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Disability
Personalised disability & severe illness cover
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Short Term Insurance
Affordable car, home & valuables insurance
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