Laura Suter, individual finance analyst at A.J. Bell, states: ‘Annoyingly for moms and dads there’s absolutely no effortless response to issue. You’ll need a crystal ball to see just what job your son or daughter goes into, simply how much they will make, and exactly how much their salary will increase. ‘
Then paying off the loan could save them tens of thousands of pounds in interest charges if you suspect your child will be a high-earner.
A.J. Bell claims the ‘tipping point’ of which a graduate with a ?50,000 loan can pay back more if they start their career in a job paying ?28,000 than they have borrowed comes.
Some body making this quantity shall repay ?50,433 over three decades before ?148,062 of interest is erased. Moms and dads may also be lured to make a right component payment to the debt alternatively.
But professionals warn this might be a false economy. Also it is if you repaid half of the ?50,000 loan, your child still may not clear the rest of debt and interest before the end of the loan term — meaning the remaining debt is wiped clear regardless of how big.
We are assisting two kids but No. 3 is on their own
Helping hand: (From right) Harry, Maddy, Georgina, John and Jackie