11 August 2006
An increasing number of parents are opting to take out a personal loan to help assist in paying for their children's school fees, new research suggests.
A study by Sainsbury's bank has revealed that in the last 12 months there has been an increase of around 38% in the number of loan applications to cover school fees.
Expenditure on educational fees is increasing with the 2004/05 total household spend totalling £7.876 billion compared to £6.860 billion for the period 2001/02.
And it is Londoners who are spending the most on their child's education with the average spend on school fees per household between 2002/03 and 2004/05 amounting to £577.20.
This compared to the East Midlands which spent the least on average with the spend equating to £140.40.
And despite Sainsbury's recommending that consumers shop around in obtaining their loan quotes, the research showed that of those people who have taken out a loan in the last five years 38% per cent obtained only one quote.
Steven Baillie, Sainsbury's Bank loans manager, said: "Around 620,000 children are now privately educated in schools, which are consistently charging more in fees. The average fee increase in 2005-2006 was 5.7% and since 1999, they have risen by around 50%.
"Given this, and the fact that more children are being privately educated, we expect to see a growing number of parents taking out loans to help pay for their children's education. Those parents doing this need to make sure that they shop around and find a competitive loan rate."
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