It always pisses me off that so many young adults should graduate university to begin the Rest of their Life with tens (sometimes hundreds) of thousands of pounds of debt. It’s unfair – and unnecessary – that kids should be burdened with such a financial weight when trying to find their feet in the world.
Yes, there is the student loan system in the UK – where the repayments are treated more like a tax, and are mandated by strict government rules on interest rates and income thresholds. But not all countries have such a generous loan system. Take the US, for example, where private loans have to be paid back every month, regardless of income, and are rarely forgiven. (Not to mention that the cost of university in the US is much higher than the UK)
So no, relying on loans is not the answer – at least not if you don’t want your children to immediately start life with crippling debt. The responsibility relies primarily on you, the parent, to pay the bill (and maybe a little on your kids – as we shall discuss later). Shocked yet? I hope so. Let me show you how any family not on the poverty line should be able to easily afford to pay for their kids’ university education.
Introducing the JISA
You’ve heard of an ISA. Well, the Junior ISA is the ISA’s younger cousin. It allows you to put up to £9,000 per year away, tax free, for your children. The money is only accessible once they turn 18 – at which point it automatically transfers into a regular ISA. This is your vessel to save for your children’s higher education. Let’s do some quick maths:
£100 per month (£50 from each parent) invested into a low-cost global index fund at 9% annual return would be worth £53,838.80 after 18 years, enough to pay for three years’ university fees and living expenses. You see? It’s quite easy.
If you wanted to get serious, you could max out the JISA at nine grand per year. £4,500 from each parent, £375 per month. If you did that, your child would have a massive £403,791.02 when they turn 18. Enough to buy a house outright.
A little bit of intentionality, applied consistently, goes a long way for your children. If the median full-time salary is now £39,000, everyone can afford to put away at least £50 each month to pay for their children’s education. Many people spend more than this on booze each month. To be honest, the median income earner should be able to put away at least £100 per month for their kids; with two parents doing this, you’ve got ~£108,000 when their turn 18. Enough for university, a house deposit and seed money for their retirement.
Investing for a house and their retirement
Alternatively, maybe your child doesn’t want to go to university. No problem! In fact, this is even better for you – you can let compounding work for longer in their favour, by holding back the money until they need to buy a house.
While investing just £100 per month into a JISA will get your kids to ~£54k after 18 years, if you hold off allowing them to access it until age 25, and you continue contributing £100 monthly between ages 18-25 (you can continue doing this tax-free, up to £3,000 per year), they’ll have a tasty £112,745.95. The compound interest growth on this investment looks like:
Anyone with half a brain cell can do this. It doesn’t require intelligence or ‘magic investments’ that only the super-rich have access to. Index fund investing is cheap and open to all. The skills required are financial discipline, patience and the ability to think long-term. If you’re reading this blog, you probably already have at least some of these skills.
The intermediate approach: getting them to part-fund
Since it’s important for children and young adults to properly understand money, including where it comes from and how it’s made, you could agree to part-fund their education, with the expectation that they get a job to pay for the rest. Or they could pay you back when they start working, or any number of other combinations. The point is that FU money gives you options. You, and your kids, no longer have to rely on the soul-crushing entity of debt.
Whatever you do, know that when your kids graduate, they will do so with zero debt, and a much better understanding and appreciation of money. This will give them a massive advantange over other young adults of their age. The combination of financial education and keeping out of debt is the best thing you can do for them.
Your children need financial help as young adults
One of the great paradoxes of life is that two parents may work their assess off over a 40-year career (although if you follow the Slow Down and Save approach, you’ll hopefully be retired long before that), accumulate significant wealth, only to die, pay massive inheritance tax and then will the rest on to their children, at a time in their life when they’re already financially secure.
This is why, rather than passing wealth on in your will, it would be far more beneficial to give it to your kids when they actually need it; to help pay for things like university or a house. In this sense, you should think of investing for your children as just passing on your wealth early.
So, as you can see, it’s remarkable easy to set your children up for a financially successful future. Invest early and be consistent, even with small amounts, and you’ll find that they have all the financial help they need as a young adult. With this head start, they can begin on their own journey to financial freedom even sooner than you.
If you liked this post, here are some others you may also enjoy:
- How to Make the Most of Your Workplace Pension
- How to make the most of your ISA
- The Best Way to Spend Tesco Clubcard Points (February 2026)
- Why you need to become an Athlete of Life
- Retire Early by Not Being a Moron with Your Money
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