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College costs a lot of money, so start planning now
Almost eight in 10 parents in Ireland say they want their children to go to college; they are less certain about how to pay for it, according to new researchoffers today mark the start of an exciting chapter.
For their parents it’s the beginning of an expensive phase of family life. Keeping on top of bills, the mortgage and aAlmost eight in 10 parents in Ireland say they want their children to go to college. They are less certain about how to pay for it, according to new research fromThere is government assistance towards tuition and maintenance for some, but, for others, funding college is a nettle they need to grasp.
Just one in four parents believe the way they currently save will be sufficient to see their child through college, according to the research. To save effectively for something, you need to be clear-eyed about how much it’s going to cost. Parents quizzed in the Zurich research quantify the hit. Is my daughter stuck with the old €335,000 tax-free gift limit?
In the nationwide survey of 929 parents of children in education, participants in the Zurich Cost of Education 2026 survey reported paying college fees of €3,832 a year. On top of that, they said they paid financial support to their college-going child of €2,457 a year, as well as transport costs of €557. For the 55 per cent of students living at home, their parents report a total bill of €6,846 a year.
That would come to €27,384 per child over a four-year degree – if costs over the period remained static. Going by the research, college offers published today could see 45 per cent of students moving to another town or city to study. These families face the biggest hit. Over a four-year degree, this would bring the overall cost of supporting your live-out child to €57,804.
On-campus accommodation will be more, depending where you study. Prices range from €3,316 to share a twin room at theFor students in private rented accommodation, parents report an average cost of accommodation of €8,939 a year. This brings the estimated total annual cost of college for these students to €15,785 a year, or €63,140 over four years.
“Our latest research shows that costs are rising across college fees, accommodation and everyday living expenses, placing sustained pressure on parents and students,” says Jonathan Daly, of Zurich Life Assurance. Indeed, parents report costs for a student living at home have risen by €701 this year compared with 2025. The average cost of rented accommodation has risen by €1,680, they say.
Jack will pay €600 a month for his own room in private rented accommodation this year, sharing the house with eight others. Electricity, heating oil and broadband are extra. Jack worked full time this summer, while living at home. His earnings will cover his clothes, socialising and transport costs.
Like seven in 10 students in the Zurich research, he works part-time while studying. He comes home on weekends to stock up on food.
“He takes a cooked meal with him for Monday, he takes mince, chicken breasts and batch cooks for Tuesday and Wednesday, cooks again on Thursday and comes home on Friday. ” Accommodation, fees and food are the leading drivers of financial strain, according to the Zurich survey. More than half of parents believe their child is under financial strain in college.
“We spoke to a financial adviser and put money into a regular savings plan and it has been a godsend,” says Seán. “All the children’s allowance went into that since a long time back. We started when my wife was working full time and we could afford to do it. There was never any money left over in our bank accounts every month, we were just covering bills; anything we could save went into that.
There was no money going anywhere else,” he says. He estimates they have paid in about €60,000 themselves, spending about €30,000 so far on accommodation and the student contribution fees for his children, with €45,000 to €50,000 now remaining.
“We didn’t touch those savings and that’s what is paying for college. Otherwise we wouldn’t have the €3,000 to pay their annual student contribution charges. If the children’s allowance had been left in our own account, it would have been swallowed up in spending. ” This is investing and returns aren’t certain.
Unlike saving into a deposit account, you could lose some of your contributions. But given enough time the markets can outperform a deposit account. You may or may not be able to dip into the pot without a penalty, this can be an upside and a downside for savers. To make gains, you should be comfortable putting the money away for at least five years, and be able to take some level of risk with it, advisers say.
The Government charges a 1 per cent levy on your contributions to these savings products. Ask the broker if they will cover this fee. You should know too that you will pay 38 per cent tax to the Government on any gains when you exit the investment. Fees for the same investment product can vary widely by broker and can eat into your returns, so shop around and get the fees in writing.
If you are putting in €100 a month, or a lump sum, ask how much of that money is actually going into the savings account. The ideal is to get all of that invested, that’s called the ‘allocation rate’. Management charges can be about 1 per cent annually for a lump-sum investment. For monthly contributions where you pay €100 a month, for example, it would be about 1.25 per cent.
Charges can be as much as 1.5 per cent or 2 per cent, however, so be sure to ask the broker. That may sound small, but extrapolated over time as the fund grows it can amount to a big difference. There’s no one-size-fits-all approach to saving for college, says Cian Callaghan, director of private clients at Metis Ireland.
Building up a separate kids’ college pot can seem to make sense, but it’s probably one of the most common mistakes made by some families, he says.
“It’s what we call ‘mental accounting’ – treating money for different things differently,” says Callaghan.into a separate pot – people can take a very different view of the risk they might be willing to take with that because it’s ‘the kids’ money’,” says Callaghan. “But there is only one pot of money and that’s your family’s wealth, and it’s about how best to use it,” he says.
“So I try to get people to focus more on becoming good savers and good investors and having an overall financial plan, rather than setting aside a separate pot for college. ” Every family is different, but one approach is to prioritise making the maximum monthly pension contribution first. This can be an extremely tax-efficient way to save and grow your money. Someone in their 30s earning €115,000, for example, can contribute 20 per cent of their salary to pension.
If they make the maximum monthly contribution of €1,917 to their pension, they will benefit from generous 40 per cent tax relief – so that pension contribution will cost them just €1,150 a month, as they will get €767 back in tax relief.
“It allows you to take a long-term view of your money, it allows you to put it into a pension, it allows you to invest it in global equities, which is what’s going to get you the return that you need in the long term. ” “That way, you will have trained yourself not to spend all of your disposable income and that’s a very simple way to have disposable income for when the kids go to college,” he says.
“If you are comfortably able to save and invest €2,000 a month now, for example, you could just turn off that tap for the period when the kids go to college, rather than withdrawing the money for college out of an investment or savings. ”“Adding more pots and more investment accounts with separate goals just adds more complexity.
Focus on becoming good savers and investors on a monthly basis, focus on the habit itself at the outset, rather than the end goal,” says Callaghan. This won’t work for everyone. If your income is more precarious for example, then having a regular savings investment account for education would be understandable, he says.
“If you want to just get your money working for you, it’s definitely not wrong and it’s better than just putting it into a credit-union or post-office account where inflation can erode the value of your money, but understand the charges. What you invest in becomes really important too,” says Callaghan. If it’s 15 years before your kids start college, you should be as heavily invested in equities as you can over that time frame, he says.
“There has never been a 15-year period in history where global equities have had a negative return. But a lot of these products push you towards something that is more middle of the road and that really limits your potential for beating inflation. ”Browned off with fees on insurance-based savings products, and low returns from banks, some people are using platforms such as DeGiro or Interactive Brokers to invest directly, he says.
“You are picking the funds yourself, but I would be careful recommending this to someone. I’d recommend that you pay for independent advice,” he says. The Government’s proposed personal investment account, modelled on the UK and Sweden, should make investing more accessible to families.
First accounts may launch next year. If you are opting for an insurance-based investment product, avoid those with early exit penalties, he says.
“Get your money into the market today, but if something does come down the line that is much more attractive, you want to be able to get your money out. ”‘We’ve noticed water damage and cracks in a home we want to buy. Should we walk away?
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