THE cost of an international education is not cheap. Top of the table in terms of popularity is the United States with current rates for Form One (age 11) at an average rate of HK$165,000 per annum. Second and third positions are held by Britain and Australia at rates of $155,000 per annum and $130,000 per annum respectively.
What can parents do to ease the burden? Either invest on a regular basis or invest a capital sum. Here are some of the more popular schemes.
Insurance company regular savings, provided they are set up on a with-profits basis, have numerous benefits.
Firstly, the savings plan carries guarantees. These guarantees accumulate and provide parents with the peace of mind that if stock markets are volatile at the time the fees fall due, their child's nest egg is protected.
A second benefit is that in the event of the death of a parent in the early years, there is a guaranteed level of life insurance cover payable. Another benefit is that parents are not tied to any particular school. Indeed, the money does not even have to be used for education.
The major pitfall is that life insurance contracts are longer-term saving plans and people who want to get out earlier than planned do so at a hefty price.
Educational trusts are normally designed for capital sums, although regular investments can be made. Their application is not that beneficial outside Britain, where they enjoy tax concessions.
