University costs: A guide to planning ahead for parents in the UK
With the autumn term fast approaching, university costs are back on the minds of families across the country. If your child is heading off this autumn, or you’ve got a few years still to go, this guide covers what university actually costs in 2026, how student finance works, and the best ways to start putting money aside.
At Fairview Financial Management, we speak with parents across Essex who want to help their children through higher education without putting their own finances under unnecessary pressure. Here’s a simple look at what uni actually costs and what you can do about it.
How much does uni cost?
Most parents ask this first, and the candid answer is: quite a lot, and it’s gone up again.
Tuition fees
Tuition fees in England went up again this year to £9,790, from £9,535 in 2025/26. For a standard three-year course, that’s £29,370 in fees before anything else comes into it.
Living costs
Accommodation, food, travel, and day-to-day life all land on top of that, and the amount varies quite a bit depending on where your child studies:
- At home: The cheapest way to do it, though it’s not what most 18-year-olds have in mind!
- Away from home (outside London): Rent and bills alone can easily run to between £9,000 and £15,000 a year
- In London: Living in the capital adds another £3,000 to £5,000 a year to that
Tot everything up and a three-year degree can cost between £55,000 and £75,000. For most families that figure comes as a genuine shock, which is exactly why it pays to think about this well before results day arrives.
Source: https://www.bbc.co.uk/news/articles/cwyegp0dnq9o
How does student finance work?
Before you start worrying too much, it helps to understand how the student loan system is set up, because it works very differently from a personal loan or mortgage.
Tuition fee loan
Every eligible UK student can apply for a tuition fee loan. It covers tuition in full and goes straight to the university, so students never actually handle that money themselves. Crucially, it’s not means tested, meaning every student can access it regardless of household income.
Maintenance loan
The maintenance loan is there to help students cover living costs. For 2026/27, the maximum amounts are:
- £9,118 for students living at home
- £10,830 for students living away from home outside London
- £14,135 for students in London
- £12,403 for students studying overseas as part of a UK course
This one is means tested, so students from higher-earning families tend to receive less. The 2026 National Student Money Survey found the maintenance loan falls about £502 short each month on average, and that gap typically lands with parents.
Repayment
Graduates pay back 9% of earnings above roughly £25,000 to £29,385, depending on where in the UK they studied.
Anything unpaid after 40 years is written off entirely. In practice, student loans behave more like a graduate tax than a conventional debt, which has big implications for whether it makes sense to pay fees yourself.
Source: https://www.gov.uk/government/publications/tuition-fees-and-student-support-2026-to-2027-academic-year/support-with-living-and-other-costs-2026-to-2027-academic-year
https://www.gov.uk/repaying-your-student-loan/what-you-pay
Should I pay the fees myself?
Plenty of parents ask us this, and the candid answer is: it depends.
If your child goes on to earn a strong salary, they’ll likely pay back most or all of their loan, so chipping in towards fees or living costs can make good financial sense. But for graduates on lower or average wages, the loan may never be fully repaid before it’s written off. Paying upfront in that case could mean spending tens of thousands of pounds that never needed to leave your pocket.
Questions worth thinking about
- What career is your child heading into, and what are the realistic earnings?
- Would that money be better used topping up their monthly budget while they study?
- Is your own pension and retirement plan in good shape?
- Are there more tax-efficient ways to pass money to your child?
Every family’s situation is different. Getting proper, independent advice before making this call is genuinely worth doing.
The best ways to save for university
If your child is young and you have time on your side, you’re in a good position. Starting early, even with small amounts, can build into a substantial sum by the time they’re 18.
Junior ISA (JISA)
A Junior ISA is one of the most widely used and tax-friendly ways to save for a child’s future. Here’s what to know:
- Annual contribution limit of £9,000 per child (2026/27 tax year)
- No tax on interest or investment growth
- Parents, grandparents, and other family members can all pay in
- Funds are locked until the child turns 18, then roll into an adult ISA
You can choose between a Junior Cash ISA (straightforward, no investment risk) or a Junior Stocks and Shares ISA, which offers the potential for higher returns over time but carries investment risk. If you’re saving for more than five years, a stocks and shares approach has historically grown more than cash, though there are no guarantees.
Your own adult ISA
If your child’s JISA allowance is already being used, or you’d rather keep direct control over the money, your own adult ISA is a solid alternative. The annual allowance is £20,000, growth is free from tax, and you decide when and how it gets used.
Start small, start now
Don’t underestimate what regular saving can do. Put away £200 a month into a2 stocks and shares Junior ISA from the day your child is born, assume a 5% average annual return, and you’re looking at nearly £70,000 by the time they turn 18. That’s a meaningful contribution to a degree, built up gradually, without a huge outlay at any one time.
Talk to an adviser
Funding university touches on a lot of areas at once: student loans, tax, savings, and your own long-term plans. Getting it right takes more than a quick Google or AI search, and the wrong decision can cost your family a significant amount.
As independent financial advisers based in Essex, the team at Fairview can help you think through your options properly and put a plan together that works for your whole family.
Get in touch today and let’s have a conversation. There’s no jargon, no pressure, just straightforward advice to help you plan ahead.