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School & University Fees Planning - UKProduct Type: Market Research ReportPublished by: Mintel International Group Ltd. Published: March 2004 Product Code: R560-1057 Description In this report Mintel addresses the topical issue of school and university fees planning for the first time. The number of people attending fee-paying schools is gradually on the rise and private school fees have been increasing rapidly over the last decade. Following the introduction of university tuition fees in 1998, the ongoing expense of putting a child through university has heightened the need for structured financial planning in saving for the future educational costs of a child/children.Table of Contents Introduction and Abbreviations The cost of private schooling and Higher Education continues to rise Scope of the report Global information and research Consumer research ACORN Abbreviations Executive Summary Key Market Dynamics Provider dynamics: Consumer dynamics: Executive Summary There are nearly 650,000 pupils being privately educated More people are entering Higher Education Tuition fees have become a major political issue Individuals pay in the region of £4.46 billion in educational fees Figure 1: Illustration of estimated expenditure on educational fees, by UK individuals, 2003/04 Savings specifically for school/university fees total £2.14 billion Figure 2: Illustration of estimated expenditure by individuals on educational expenses, by product area, 2004 A wide variety of products are used for this purpose Specialist advisers populate this sector Potential market for educational fees planning is significant Some 30% of parents are saving for their children's education The need to save for future educational costs is acknowledged by consumers Demographic, Economic and Social Background Population changes will impact medium-term demand for educational services Figure 3: Population growth, by age group, 2001-25 Increasing wealth will facilitate individual spending on education Figure 4: Illustration of PDI and consumer expenditure per capita, at constant 1998 prices, 1998-2007 More investment in education is required Spending on Higher Education in the UK lags behind other European countries Figure 5: Public expenditure on tertiary education as a percentage of GDP, 1999 Market Factors - School Fees Around one in 15 pupils are educated privately Figure 6: Illustration of total pupils at independent schools and proportion of the school population in the UK, 1970/71-2001/02 ISC data indicate numbers have increased by 25% since the 1980s Figure 7: Total pupil numbers in ISC member schools, 1982-2003 School fee inflation outstrips rise in retail prices Figure 8: Inflation rate and increase in average termly fees in ISC member day schools, 1990-2003 School fees for day schools can exceed £10,000 per year Figure 9: Sample school fees, by type of school, September 2003 Market Factors - Higher Education There are more than 2 million students in Higher Education Figure 10: Illustration of the total number of students in further and Higher Education, 1970/71-2001/02 Participation in HE is therefore on the rise Figure 11: Illustration of the age participation index for Great Britain, 1985/86-2001/02 Tuition fees were introduced in 1998 The debate on top-up fees is a controversial one Self-provision in education may become a reality Substantial income is generated from tuition fees Figure 12: Illustration of UK Higher Education institution income, 2001/02 Expenses and tuition fees make HE a costly proposition Figure 13: Estimated total costs involved in taking a university degree, by location, 2003/04 Awards, grants and loans ease the burden for some Market Size Educational fees cost private individuals in the region of £4.5 billion each year Figure 14: Estimated expenditure on educational fees, by UK individuals, 2003/04 and 2006/07 The structured school fees planning market is fairly small at present Figure 15: Estimated expenditure by individuals on educational expenses, by product area, 2004 Products for Planning School fees planning - adopting a strategy to suit Tax planning is key factor in planning for the future Relatives can help in the funding process A mixed portfolio of products is usually recommended Deposit and savings accounts ISAs National Savings & Investments products Annuities Gilts and other fixed-interest securities Investment bonds UK/overseas equities Unit trusts/OEICs Endowments Friendly society tax-exempt savings plans/CTFs Structured school fees plan market will expand Advisers and Distribution Established school fee planners corner a specialist area Education planning advisers will come to the fore IFAs can genuinely add value to investment decisions Figure 16: Independent financial advisers - range of activities, September 2003 Matrix-Data survey indicated 11,100 IFA firms in September 2003 Figure 17: IFA industry structure, September 2003 Friendly societies are ideally placed to promote the relevant products Figure 18: Number of members and average number of policies per member (AFS members only), 1999-2003 The Consumer 16.7 million people have at least one child under the age of 18 Figure 19: Children of respondents, by age range, January 2004 Potential market for educational fees planning is significant Figure 20: Consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, January 2004 One quarter with children under the age of ten would consider a private school Figure 21: Consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, by age of children, January 2004 Nearly a third of 25-34s would contemplate a fee-paying school Figure 22: Consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, by gender, age and socio-economic group, January 2004 A majority of the younger ABC1 Special Groups will fund HE Figure 23:Consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, by marital status, lifestage and Mintel's Special Groups, January 2004 Income linked closely to educational expectations Figure 24: Consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, by working status, gross annual household income and tenure, January 2004 Significant regional differences emerge regarding educational attitudes Figure 25: Consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, by TV region and ACORN categories, January 2004 Broadsheet readers and Waitrose shoppers are targets for advisers Figure 26: Consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, January 2004 Nearly 10 million parents have saved for educational purposes Figure 27: Ways in which consumers have saved/are saving for the education of their children, January 2004 Consumers choose standard savings vehicles Trusts for future school fees have some popularity Figure 28: Ways in which consumers have saved/are saving for the education of their children, by consumers' experience of or attitude towards fee-paying schools and contributing towards the cost of Higher Education, January 2004 People with younger children more likely to be saving Figure 29: Ways in which consumers have saved/are saving for the education of their children, by age of children, January 2004 The Future Government policy should ensure that this market grows Advisers are becoming more interested in this sector Launch of the child trust fund may be one way of contributing towards funding education Services will deal with both school and HE funding Planning for nursery education will also be required Mintel's consumer research findings reveal the potential scale of this sector Forecast Figure 30: Forecast of the educational fees market, 2003-07 Educational fees will be increasingly expensive Private schools carry appeal for many Factors used in the forecast |
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