Just 31 per cent of parents in the UAE allocate their savings for their children’s education despite having high aspirations for future degrees, a HSBC survey has found.
Around two-thirds of the parents in the country wished that they had begun saving earlier for their children’s education while around 82 per cent said that it was the best investment to make.
UAE parents were also among the most ambitious in the world with 86 per cent of them hoping that their child would study up to postgraduate level. Such aspirations can be attributed to tangible benefits such as high-income potential and increased access to opportunities further on, the survey said.
The majority of parents polled in the country want to send their children to study in the UK, US and Canada but are not financially prepared to do so, research has revealed.
Around 99 per cent of respondents funded their children’s education fully or partially through their current income while 32 per cent used their current savings. Only two per cent used investments while one per cent opted for education plans.
These figures were also way below the global average where 44 per cent said that they could rely on their savings while 24 per cent invested to fund their children’s education, HSBC said.
“We see that parents are not aware of how they can financially prepare for their child’s future, with the survey revealing that more than half find making decisions on this issue a daunting prospect,” said Gifford Nakajima, regional head of Wealth Development, MENA, HSBC Bank Middle East.
“While there is an evident tendency to fund these costs through current incomes, parents have to realise that they need to move beyond relying on these short-term approaches to funding their child’s education, and they will need to have a concrete saving plan in place in order to sustainably support their long-term aspirations.
“This is also critical as it will allow them to take steps towards preparing for other financial priorities, such as saving for retirement.”
UAE expats have traditionally been found to save less for long-term aims such as retirement and education plans. According to a study by Friends Provident International, the majority of UAE expats preferred to spend an unexpected windfall on property or gold than towards saving it in a retirement scheme.