University Costs: How Much Should UK Dads Actually Save?

"Should I save for my kids' university?" is a question that divides UK parents. Some argue that student loans make it unnecessary. Others worry about saddling their children with debt.

The truth is somewhere in between—and depends heavily on understanding what university actually costs, what student finance covers, and where the genuine gaps are.

This guide breaks down the real numbers, explains how student loans work (they're not as scary as headlines suggest), and helps you save strategically for the expenses that student finance doesn't cover.

The Headline Costs

Let's start with the big numbers that make parents panic:

Tuition fees (2025/26):

England: Up to £9,535 per year (most universities charge the maximum)
Wales: £9,250 per year
Scotland (for Scottish/EU students): Free
Scotland (for rest of UK): £9,250 per year
Northern Ireland: £4,750 per year (NI students), £9,250 (rest of UK)

Three-year degree total tuition: ~£28,000-29,000 (England)

Maintenance (living costs):

Student accommodation: £5,000-12,000 per year
Food: £2,000-3,000 per year
Books and supplies: £200-500 per year
Transport: £500-1,500 per year
Social and misc: £1,500-3,000 per year

Annual living costs: £10,000-20,000 depending on location and lifestyle

Three-year degree total: ~£60,000-90,000

These numbers are genuinely eye-watering. But here's what they don't tell you: most families don't pay this upfront.

How Student Loans Actually Work

Tuition Fee Loans

Available to all UK students regardless of household income. The loan pays your fees directly to the university—you never see the money.

Key point: You don't need to save for tuition fees. The loan covers them entirely.

Maintenance Loans (2025/26)

These cover living costs and depend on household income:

Living situation	Maximum loan	Minimum (high income)
Living with parents	£8,877	£3,907
Away from home (outside London)	£10,544	£4,917
Away from home (London)	£13,762	£6,855
Year abroad	£12,076	£5,200 (approx)

Income thresholds:

Household income £25,000 or below: Maximum maintenance loan
Household income above £25,000: Reduced loan, on a sliding scale
Around £62,000-70,000: Minimum loan only

The Maintenance Gap

Here's where parents usually need to step in: the maintenance loan often doesn't cover actual living costs, especially for families with income above £25,000.

Example: Student living in Bristol (outside London)

Item	Cost per month
University accommodation	£650
Food	£200
Phone	£15
Transport	£50
Social/misc	£150
Total	£1,065/month

That's £9,585 for a 9-month academic year. But if household income is £50,000, they might only get ~£7,000 maintenance loan—a gap of £2,500+ per year.

Repaying Student Loans (Plan 5)

Students starting university from 2023-24 onwards are on Plan 5:

Repayment threshold: £25,000 per year (frozen until 2027)
Repayment rate: 9% of income above threshold
Written off after: 40 years
Interest rate: RPI inflation (no real-terms increase currently)

What this means practically:

Graduate salary	Monthly repayment
£25,000	£0
£30,000	£37.50
£35,000	£75
£40,000	£112.50
£50,000	£187.50

Most graduates will never fully repay their loans. It functions more like a graduate tax than traditional debt.

Important perspective: Student loans don't affect credit scores, don't prevent mortgages (though they reduce borrowing capacity slightly), and get wiped after 40 years regardless of balance.

What to Actually Save For

Given how student finance works, strategic saving means focusing on gaps the loans don't cover:

1. The Maintenance Gap (Priority)

Who needs it: Families with household income above ~£30,000 How much: £1,500-4,000 per year depending on income and location Total for 3 years: £5,000-12,000

This is the biggest genuine expense most families face.

2. First-Year Deposits and Setup

Universities typically require accommodation deposits before student finance arrives:

Accommodation deposit: £200-500
Accommodation advance rent: Often first term (£1,500-3,000)
Household items: £200-500
Initial food shop: £50-100

Total first-year setup: £2,000-4,000

This catches many families off guard. You need cash before the loan comes through.

3. Accommodation Between Years

End of first year, accommodation deposit for second year is due—often before remaining loan payments for year one.

Deposit for private rental: £500-1,500 (often 4-6 weeks rent)
Agency fees: £0-300 (now capped but still possible)

4. Summer Living Costs

Maintenance loans cover roughly 39 weeks. Summers are unpaid.

If your child doesn't have a summer job or internship, they'll need:

Living costs if staying at university: £800-1,200/month
Or transport home and contribution to household

5. Learning to Drive

Many students learn to drive during university—a significant expense:

Provisional licence: £34
Driving lessons (average 45 hours): £1,200-1,500
Theory test: £23
Practical test: £62
First car: £2,000-5,000
Insurance (young driver): £1,500-3,000/year

Total to get driving: £2,500-3,000 (before car and insurance)

The Guardian reported in 2025 that learning to drive costs have risen over 60% in five years, with lessons averaging £34/hour nationally and up to £50/hour in London.

6. Postgraduate Study

If your child wants to continue to Master's or PhD:

Master's fees: £8,000-15,000 (or much more for MBAs, specialist degrees)
Master's loans: Available, but limited
PhD funding: Usually fully funded if competitive, but not guaranteed

What You Probably Don't Need to Save For

Tuition fees: Fully covered by loans
Basic living costs for lower-income families: Maintenance loan is usually sufficient
Textbooks: Libraries and digital resources mean fewer purchases needed than in the past

Saving Strategies

Junior ISA

Already covered in detail in our Junior ISA guide, but in summary:

£9,000/year allowance
Tax-free growth
Locked until 18 (perfect for university timing)
Belongs to the child (can't be taken back)

Note: Junior ISA savings belong to your child, so they could technically use them for anything at 18. If you want more control, see below.

Regular ISA in Your Name

If you want to retain control over when and how money is used:

Save in your own ISA
Gift to child when needed (or pay expenses directly)
You keep control if plans change
Counts toward your £20,000 annual ISA allowance

Disadvantage: uses your allowance, and growth is in your name (though still tax-free in an ISA).

Premium Bonds

No risk to capital
Chance of tax-free prizes (1-4% equivalent on average)
Easy to cash when needed
£50,000 maximum per person

Not exciting, but safe and accessible.

Lifetime ISA (LISA)

Not ideal for university savings—designed for house purchase or retirement, with penalties for other withdrawals.

How Much to Save

Target for comfortable university support:

Category	Amount	When needed
First-year setup	£3,000-4,000	Before starting
Maintenance gap (3 years)	£6,000-10,000	Throughout
Driving	£2,500-3,000	Anytime
Emergency/flexibility	£2,000-3,000	Buffer
Total	£15,000-20,000

If you start when your child is born: ~£55-75/month would build this over 18 years (assuming modest investment returns).

If your child is already 10: ~£160-210/month for 8 years.

If your child is 16: £600-800/month for 2 years—or accept you'll fund university costs from current income.

Teaching Financial Responsibility

University is often when young people first manage significant money. You can help prepare them:

Before University

Open a student bank account together
Practice budgeting with their current income/allowance
Discuss realistic cost expectations
Talk about student loans—what they are, how repayment works

During University

Consider monthly transfers rather than termly lump sums
Let them manage a budget (with backstop for emergencies)
Encourage part-time work if studies allow
Don't bail them out of every overspend—controlled learning is valuable

Part-Time Work

Most universities recommend no more than 15-20 hours/week of paid work during term-time to avoid academic impact.

Good options:

University jobs (library, student union, events)
Campus jobs in accommodation/catering
Tutoring younger students
Retail/hospitality (flexible shifts)

Summer work can significantly reduce the financial burden on parents.

The Apprenticeship Alternative

Worth mentioning: university isn't the only path. Degree apprenticeships offer:

No tuition fees (employer pays)
A salary while learning (£15,000-25,000+ depending on sector)
A degree at the end
Work experience built in

Major employers including Google, PwC, KPMG, and many tech companies offer competitive degree apprenticeships. For some careers, this is financially superior to traditional university.

The Bottom Line

Don't panic about the £90,000 headline figure. Here's what actually matters:

Tuition fees: Covered by loans—don't save for these
Maintenance gap: The main genuine expense for middle-income families
Setup costs: Need cash before loans arrive
Driving and independence costs: Often overlooked

A realistic savings target is £15,000-20,000 per child, not £90,000. And if you can't save that much? Part-time work, careful budgeting, and your ongoing support from income can cover it.

Student loans aren't the disaster the media sometimes portrays. For most graduates, they're a manageable graduate contribution that doesn't prevent them from building a good life.

The most valuable thing you can give your children around university isn't necessarily a big savings pot—it's financial literacy, realistic expectations, and the confidence to manage money themselves.

Want to start building that savings pot? Read our guide to Junior ISAs for UK dads.