Saving for Children's Education: A Planning Guide for International Families

For internationally mobile families with children, education is often the largest single financial commitment after housing — and unlike housing, it is typically non-discretionary once you have established a child in a school and committed to a particular path.

The numbers are significant. International school fees for a child from age 5 to 18 — over 13 years — can run from £150,000 to £400,000+ in total, depending on location and school. Add university costs in the UK, US, or another English-speaking destination, and the aggregate education cost per child can easily reach £250,000-£600,000 or more. For a family with two or three children, this is a seven-figure commitment spanning two decades.

Starting to plan early — ideally before a child is born, or in the first few years of life — makes this manageable through disciplined saving and the power of compound growth.

The Scale of the Challenge

International school fees (as of 2026): These vary significantly by location and school, but typical ranges as an annual guide:

• Dubai: AED 35,000-100,000+ (approximately £7,500-£21,500+) per year, with elite schools at the higher end
• Singapore: SGD 20,000-50,000+ (approximately £12,000-£30,000+) per year
• Thailand (Bangkok): THB 350,000-700,000+ (approximately £7,500-£15,000+) per year
• Cyprus: €8,000-€18,000+ per year at English-language schools
• UK private schools: £15,000-£50,000+ per year (day schools lower; boarding schools higher)

These fees typically increase annually — at rates that have generally exceeded general CPI inflation. Planning should assume fee growth of 3-5% per annum, not the general inflation rate.

UK university costs (2026): For domestic students (UK resident), tuition fees are currently capped at £9,790 per year for the 2026/27 academic year (up from £9,535 in 2025/26 and the long-frozen £9,250 before that; fees are now set to rise annually with inflation). Living costs add another £12,000-£18,000 per year, depending on location (London is materially higher). For international students — which applies if your child is not UK resident at the time of application — fees are typically £20,000-£50,000 per year for undergraduate courses, more for medicine, law, and postgraduate programmes.

US university costs: Top US universities (Ivy League and equivalents) charge $60,000-$80,000 in tuition alone, with total costs (room, board, books, travel) reaching $80,000-$100,000 per year. Four years at a top US university is therefore a $320,000-$400,000 commitment — at current costs, before allowing for future fee increases.

The Power of Starting Early

The most important variable in education savings is time. The mathematics of compound growth reward early starters dramatically.

An illustrative example (using 7% annual real return as an illustration — actual returns will vary and this is not guaranteed):

• Saving £10,000 per year from birth to age 18: total saving of £180,000, but the investment value with growth exceeds £320,000+.
• Starting at age 10 with the same £10,000 per year: total saving of £80,000 over 8 years, investment value approximately £105,000 — less than one-third of the outcome from starting at birth with the same annual contribution.

The implication is clear: starting early, even with modest monthly contributions, is far more powerful than making larger contributions later. The time the money has to grow matters more than the annual savings rate for most families.

Savings Vehicles for International Families

Junior ISA (JISA): For UK-resident children, the JISA allows up to £9,000 per year (2026/27 allowance; frozen at this level until at least 2030/31) in a tax-free savings account that the child can access at age 18. Investment growth and income are free from tax. A JISA is simple and effective for families with UK-resident children. However, it is not available to children who are not UK resident — most expat families' children therefore cannot use a JISA unless they are UK-based.

Offshore regular savings plans / education savings plans: These are the primary vehicle for internationally mobile families. Investment managers offer regular savings plans (minimum contributions from £200-£500/month typically) held in offshore wrappers in jurisdictions like the Isle of Man, Channel Islands, or Ireland. The money grows in a tax-deferred environment, can be invested in a range of funds, and is accessible at any time (though early withdrawal penalties and charges apply in the initial years of some plans — understand the terms carefully before committing). International education savings plans often have flexibility on maturity timing, currency of investment, and fund choice.

Offshore investment bond: A lump-sum version. If grandparents or other family members want to make a substantial gift towards a child's education, an offshore investment bond is a flexible and tax-efficient wrapper. The 5% annual withdrawal allowance can be used to fund school fees from the bond over time.

Bare trust for a child: Any adult can invest money in trust for a child, and the investment returns are attributed to the child for income tax purposes. If the trust is from a parent and the income exceeds £100/year, it is taxed on the parent instead (the "parental settlement" rule). Gifts from grandparents or other relatives do not trigger this rule, making bare trusts from grandparents particularly tax-efficient.

Child SIPP: It is possible to open a pension for a child (contributions up to £3,600 per year gross; the actual contribution is £2,880 and the government adds tax relief to make it £3,600). This is a long-term wealth building measure rather than an education fund, as the money cannot be accessed until age 57+. However, for grandparents seeking to give meaningfully over many years, a child SIPP can be a powerful legacy tool running alongside education savings.

Currency Considerations

If your child's education will be priced in a currency other than your income currency, you face exchange rate risk over a long planning horizon. A UK-based family saving in GBP for a US university education will have their purchasing power affected by GBP/USD exchange rates — and over 10-15 years, exchange rates can move significantly.

Practical approaches:

• Invest part of education savings in the currency of the anticipated education (USD savings for US university; EUR for EU university).
• Diversify across currencies rather than concentrating all savings in one currency.
• Use a currency-flexible investment vehicle (many international savings plans allow the base currency to be changed over time).

Managing the Investment Risk Appropriate to the Horizon

The investment approach for education savings should reflect the time until the money is needed:

More than 10 years away: A growth-oriented portfolio (predominantly equities, potentially with some alternatives) is appropriate. Time to recover from short-term market falls. Aim for real return well above inflation to build a meaningful fund.

5-10 years away: Begin shifting towards a more balanced portfolio, reducing equity exposure and increasing defensive allocations. Volatility becomes more material as the draw-down date approaches.

Fewer than 5 years away: Capital preservation becomes the priority. Significant equity exposure at this stage risks a market fall coinciding with the need to fund fees. More in cash, short-duration bonds, and lower-volatility funds.

Many international savings plans offer "lifestyling" — automatic de-risking of the portfolio as the target date approaches. Review whether this matches your actual target date and risk tolerance.

Involving the Children

Financial education for children is one of the most valuable gifts a family can give. Discussing the cost of education — in age-appropriate terms — helps children understand the investment being made in their future. Some families involve older children in decisions about university choices partly by making the relative costs transparent.

Involving children and grandchildren in simple investment concepts — how compound interest works, what it means to save regularly — creates financial literacy that compounds in value over a lifetime.

How Global Investments Can Help

Education planning is a long-term commitment that intersects with tax planning, investment strategy, currency management, and estate planning. Global Investments works with internationally mobile families to build education savings plans that are realistic, tax-efficient, and properly invested for the time horizon involved. We can help you identify the right savings vehicle for your location, select appropriate investment funds, and integrate education planning into your broader financial strategy. Speak to one of our advisers to start planning.

This article is for general information only and does not constitute financial advice. Investment returns are not guaranteed and can fall as well as rise. Fee figures are illustrative and change over time. Always seek professional advice tailored to your circumstances before making investment decisions.