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Education: a gift for life that takes a little planning

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As South Africans settle into 2022 with hopes for a year not overshadowed by lockdowns and other Covid-19-related disruptions, households are watching their budgets very closely. This is because beyond coping with the cost of living, parents need to make provision for school and university fees.

While expensive for most people, an investment in education is one of the surest ways parents can safeguard their children against future unemployment, says Old Mutual’s Strategic Retail Marketing Manager, Karabo Ramookho.

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South Africa’s latest unemployment figures indicate that youth unemployment has reached a staggering 66,5%. The value of education becomes clear when one considers that the graduate unemployment rate in South Africa is 12,5%, the rate for those who have a post-matric qualification but not a degree is 23,2% and matric leavers is 35,5%.

“Education is the gift that keeps on giving,” says Ramookho. “South Africa has an unsustainably high unemployment rate, and the latest figures show that statistically, those with an education are more likely to be employed.

The provision of good education is a long-term investment not only in the children’s lives, but also in the country at large. Ramookho says that investing in quality education requires discipline and long-term planning, all which is possible when you partner with an accredited financial adviser from a reputable financial institution.

According to Old Mutual’s research, a child starting Grade R this year will cost R875 000 on average to be put through the public primary and high school system, while parents would need to account for R1,89-million on average to put the child through private schooling.

“Public primary school fees are currently about R22 600 a year, while private primary schools cost about R66 200 on average per year. Sending your child to a government high school will cost around R33 400 per year. At today’s prices, a private high school is likely to cost you R97 200 per year.

old mutual education a gift for life that takes a little planning

“With the right planning, advice and focus, it really is possible to make provision for a child’s education. The sooner you start, the better, and affordability is key. It’s best to start with what you have now, than to not start at all”

She says by following three simple tips, parents can go a long way towards making provision for their children’s education.

1. Start saving as soon as possible

“The best time to start saving is when a child is born, whereas the second-best time to start is today,” says Ramookho. Besides, she says, if you start when a child is born, you will have at least six years for your investment to earn growth before they start school.

2. Find the number and stick to it

Ramookho says that it’s important to start understanding the cost of education, and to look at schools that you’d like your children to attend. She says you need to calculate a few important things, such as:

  • the cost of a full year’s schooling,
  • how many years the child will need to be educated,
  • whether you have time to save before they start,
  • and whether you’ll be contributing financially during their studies.

Old Mutual has an Education Calculator tool that makes it easy for parents to find the figure they need to be saving.

“Don’t forget to factor in things such as school clothes, books, stationery and extra lessons,” she says.

“There are a range of solutions available in South Africa. Old Mutual has qualified financial advisers to help you select the right education solution for your situation”, says Ramookho. She adds that our advisers also help families with budgeting to make their financial resources go even further.

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3. Speak to an adviser

“Seek out a qualified financial adviser from a reputable company who can help you choose the right solution for your family’s circumstances” says Ramookho. She adds that an adviser can help families with budgeting to help them make their financial resources go even further.

Expected cost of one year of education2022203020352038
Public Primary School22 60036 10048 30057 500
Public High School33 40053 30071 30084 900
Private Primary School66 200105 600141 300168 300
Private High School97 300155 000207 500247 100
University51 70082 400110 200131 300
*Costs are in Rands and based on education inflation of 6% per year. The amounts are rounded to the nearest hundred. The primary school costs are for Grade 1 to 7 and exclude pre-primary. University costs are for one year of an undergraduate degree.* Source: Old Mutual Research


For more information about saving for your child’s education, visit https://www.oldmutual.co.za/personal/solutions/education-plans/

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