University Costs Are Closer Thank You Think

A five-year-old child will be university age in thirteen years. If you have not started saving yet, that can feel like plenty of time. In financial planning terms, it is not—but it is still enough time to build something meaningful if you start now. The cost of higher education is one of the largest financial commitments most families will make. And unlike retirement, which can theoretically be delayed, university has a fixed arrival date. The preparation has to happen before it arrives.

Every year you wait to start a university fund costs more than you think—because you are not just losing a year of savings, you are losing a year of compound growth.

What University Actually Costs

The figures vary significantly depending on where and what your child studies. These are realistic current ranges to plan around:

UAE university (undergraduate, 4 years): AED 150,000 – AED 400,000+ depending on institution

UK university (3 years, tuition + living): GBP 45,000 – GBP 90,000+ (international student rates

apply if UAE-based)

US university (4 years, tuition + living): USD 120,000 – USD 300,000+

Australia (3–4 years): AUD 100,000 – AUD 200,000+

These figures will be higher in 13 years—education inflation typically runs at 3–6% annually

How Compound Growth Works—and Why Starting Early Matters

Compound growth means your returns earn returns. The longer money is invested, the more powerful this effect becomes. A simple illustration:

Saving AED 1,000/month for 13 years at 6% annual return = approximately AED 230,000

Saving AED 1,500/month for 10 years (starting 3 years later) at 6% = approximately AED

245,000 To reach the same outcome starting later, you have to save significantly more each month

Starting 5 years later and saving AED 2,000/month for 8 years at 6% = approximately AED

237,000

Moral: Time in the market matters more than the monthly amount, within reason

Practical Strategies for Building a University Fund

1. Regular savings plan

A monthly contribution into a dedicated savings or investment account. In the UAE, several banks and Financial providers offer structured education savings plans with fixed terms and projected returns.

These create discipline through automation—the money moves before you spend it.

2. Investment account

For a 13-year horizon, an investment in diversified funds (equities, bonds, or a balanced portfolio)

historically outperforms a standard savings account. Volatility is manageable over this timeframe. A financial advisor can structure a portfolio appropriate for your risk tolerance and timeline.

3. UAE-specific education savings plans

Several UAE insurers offer education endowment plans—regular premium policies that pay a lump

sum at a target date. These combine a savings element with a life insurance component, meaning if a

parent dies, the plan continues to be funded by the insurer. This is a particularly relevant consideration.

for single parents or families where one income carries most of the financial weight.

4. Lump sum investing

If you have a gratuity payment, inheritance, or one-off windfall, investing a lump sum now and leaving it

for 13 years can build significant capital with no further monthly commitment required.

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HerSphere Financial Planning Series · hersphere.ae