Discovery Life has published key insights from a White Paper developed on current trends in education funding and protection in South Africa.
From pre-school to finishing a first degree, the average family with two children will spend around R5 million (R2.5 million per child) on education in today’s terms, said Gareth Friedlander, head of R&D at Discovery Life.
“That means you have to save around R6,700 each month per child, however education fee increases also far outpace salary growth each year, so these fees and the amount you need to save will take up larger portions of income over time,” he said.
“The fact that children are starting school earlier than before and the many extra costs associated with education, such as laptops and other technology, extra tuition, sports and other activities, can shoot up the yearly costs by approximately 50%.”
The white paper also found that South Africans are increasingly having children later in life. The average age of first-time mothers has gone from 24 to around 26 (30 for first-time mothers on Discovery Health Medical Scheme).
Friedlander said that while one can argue there may be more time to build up savings before having children, it could also mean people are not saving enough for retirement because it coincides with the responsibility of funding children’s education.
“People have to be motivated more to create funding for their children’s tertiary education,” he said,
“Research shows that for each additional year of education a person’s income increases by 10%, higher education lowers people’s mortality risk by up to 22%, and each additional year of education on average boosts a country’s GDP by a vast 18%.”