How to budget for education costs as an expat

Parents inevitably want to provide their children with the best education, right the way from nursery and primary school through to university.

We all know that education can prove to be costly, especially as an expat living in the UAE.

The cost of schooling from an early age here can be huge, particularly if you are not assisted by a company benefit scheme. In Dubai, fees have reached more than Dh60,000 for some schools, with one IB curriculum school charging nearly Dh100,000.

But these costs are really just the starting point. 

How many parents can safely say their child’s further education is secure? With high school fees to pay for youngsters, saving for university is often not considered until it is too late.

The cost of education is going up all the time and when we consider how long the average child will spend studying, these costs start multiplying.

One of the aspects of financial planning that is often overlooked is that of education planning.  Neglecting this area can result in putting the parents under massive strain and can even affect their savings and retirement funds.

Each year the National Union of Students estimates how much a full-time, higher education undergraduate in England spends in a standard 39-week period.

Estimating ‘average’ costs is difficult as there are many variables such as the type of course, the institution, and the geographical location. However, taking factors into consideration such as the costs of books, rent in student accommodation and tuition fees we can get some idea of the numbers.

To put these figures into perspective, according to the NUS (National Union of Students) the average cost of sending a child to university in London is estimated to be Dh141,000 per year. (2013/2104) The average course length is three years with many students studying for longer and of course we must not forget that this cost is per child.

So when should you start saving? Well, if you start in time the good news is that you have up to 18 years during which to save a university nest egg for your child. The bad news is that many experts believe that nothing less Dh420,000 will be enough to see a child through university.

Let’s look at the numbers: If you were to save Dh150 per month, over an 18-year period, assuming an annual rate of return of 5 per cent, this would only generate about Dh52,500. A far cry from even the cost of one-year at university.

What if you don’t have the money? Many parents encourage grandparents, godparents or friends to contribute to the savings pot. Again the earlier this is put into place the better,

What about loans and funding? Help is often available for students across various countries, such as taking a student loan or a student grant from, but it is important to remember that these need to be paid back (with interest) and often students finish their further education under a mountain of debt before they have even begun work.

Where should I save? With interest rates at an all-time low you should consider some sort of equity based investment. These have historically produced far better returns over longer periods than high-street banks. There is no earning on interest in standard bank accounts.

There are various education plans available for expats that have been designed exactly for this purpose. Having a separate equity based education fund allows you to take advantage of often greater returns while keeping your child’s funding separate from any saving or retirement funds you may already have in place.

The author is a private client advisor with AES International, Global Wealth Management. You can contact her @

[Note 2: The views expressed are the author’s own and do not reflect in any way, the views of Emirates 24|7. Readers are advised to carry out their own due diligence before taking any decision.]


[Image via Shutterstock]


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