Education Costs in the UAE: Is Traditional Saving Enough?

With the anticipated cost of higher education in the UAE ranging from AED 250,000 to AED 600,000, many parents are questioning if traditional saving methods will suffice. A recent YouGov survey, commissioned by Zurich International Life, reveals that 29% of UAE parents have not yet begun saving for their children’s university education. This survey highlights a crucial issue—while the high costs are well-known, the reliance on conventional savings methods may not be adequate to meet these financial demands. The findings suggest that families need to explore more effective strategies to secure their children’s educational futures.

Reliance on traditional saving methods

Traditional saving methods still dominate in the region, with 77% of the 1,000 residents surveyed opting for bank deposits, while 48% invest in shares. However, only a small fraction (14%) of respondents are utilising education-specific savings plans, which are designed to enhance growth and provide targeted benefits for educational expenses.

While conventional deposits offer safety, their typically lower returns may not be sufficient to keep pace with the increasing costs of higher education. Education-focused savings plans, which often include investments in growth-oriented funds, remain a more strategic approach. These plans are designed to accumulate savings while also outpacing inflation, ensuring that the value of savings does not diminish over time.

“While the substantial costs associated with higher education underscore the urgent need for effective savings strategies, starting early and choosing the right education savings plan can be a game-changer in helping parents save today for their children’s happily ever after,” said David Denton-Cardew, Head of Propositions, Zurich in the Middle East.

According to the survey, most parents believe allocating 6% to 20% of their monthly salary is sufficient for education savings. The survey however emphasises that more effective and affordable savings plans are needed. Empowering parents to give their children the best chance at their dreams with a tailored education savings plan remains a sustainable strategy.

Value adding strategy

An overwhelming 87% of respondents expressed strong interest in education savings plans that also offer life insurance cover. These dual-purpose plans help in accumulating funds for education and provide a safety net that ensures financial security for the family, should the worst happen.

As education costs soar, starting early, and exploring various savings options, including dual-purpose plans, can offer a balance of growth and security.

“Having a well-structured education savings plan does more than just save money; it helps grow your money through appropriate investment strategies and ensures the protection of that investment. This strategy has some notable benefits including flexible payment options and the ability to tailor the plan to meet individual financial goals. The substantial costs associated with higher education underline the urgent need for effective savings strategies,” noted David.

Parents could consider plans that offer tailored solutions, long-term growth and the added peace of mind of life insurance cover to satisfy this goal. By adopting a strategic approach to savings, parents can have better chances to achieve their children’s educational goals.