16 September 2008
Rapid rises in school fees coupled with increases in the cost of living mean many parents are using personal loans to fund their children's education, it has been suggested. According to research carried out by Sainsbury's Finance there has been an increase in the number of personal loans being taken out to pay for school fees. The financial services provider found that around 18,000 UK loans worth an estimated £165 million were taken out to cover such costs last year. This came as research from Halifax Financial Services revealed that over the last five years private school fees have increased by around 40%. Commenting, Hugo Shaw, an investment adviser at Bestinvest, said the "surge" in school fees is yet another "unwanted burden" facing families in the UK, who are already struggling with higher food and fuel bills. "What's happened is that these costs have risen more rapidly than originally expected and so parents have been left with a savings gap, hence the need for a loan," he remarked.