Parents expect a university degree to increase their children's income

Almost two in five parents expect that a university degree will increase their children's income earning potential and enable them to get ahead in the workplace, a report by HSBC has shown.

The research, which surveyed over 4,500 parents in 15 countries, was carried out by Ipsos Mori and based on a representative online sample of men and women of different ages, with a range of income, and who live in different regions. Respondents had at least one child aged 23-or-under who is in or about to start higher education.

Sorrel Beynon, media relations manager for HSBC, says: "We haven't seen anything on this scale about parents' attitudes to education – especially globally. And often it's parents who are responsible for making decisions about university finance."

The survey release follows news that starting salaries have dropped by 11% to £21,702 since 2007-12. The overall value of a degree has also been cut by up to a third in five years, according to research, with the earnings "premium" gained by graduates in skilled jobs having declined since the economic crisis.

The average difference in lifetime earnings between those with a degree and those without, for all subjects, where there were sufficient numbers to be analysed, remained level between 2007 and 2012. But the differential, after adjustment for inflation, fell from £6,732 to £6,717.

Recent research has also suggested that many of today's students will still be repaying their student debts when they reach their 50s.

Michelle Highman, chief executive of the Money Charity, warns that high expectations placed on the outcomes of graduating with a degree can cause added pressure for students.

She says: "Some parents overestimate what their children are likely to earn when they graduate and if young people struggle to find a job when they graduate it can cause extra pressure."

Nearly nine in ten of those surveyed want their children to go to university, with over seven in ten parents in the UK expecting their children to study at degree level. More than a third of those surveyed believe a university education should offer access to opportunities in life.

More than a third of parents surveyed said they find making decisions about funding their children's higher education daunting.

Highman says there isn't always a lot of support for parents who are concerned about their children's education and finances. She says: "It can be daunting for people to organise finance for university.

"There's a lot of information aimed at students but less at parents, so I can see why people struggle. The most important thing is to talk about it. In many ways talking about finance is still a taboo: parents will send students off with condoms, first aid kits and cookery books, but they won't always talk about money worries."

Francesca McDonagh, head of retail banking and wealth management at HSBC, says: "Decisions about provision for education can weigh heavily on parents. It is never too early to start investing if you can."

The survey also found that for parents in the UK, education is the first choice of financial investment for their child's future.

Michael Royce, a student money expert at the Money Advice Service, says: "Saving money for higher education can be tough for many parents and organising student finance involves paperwork. If the student loan is not enough to cover their essential living cost, other funding - such as grants and bursaries - may be available."

(Source: TheGuardian)