FNB Education Insights Survey: Only 49% of Parents Have a Structured Education Savings Plan

JOHANNESBURG, Gauteng — The latest FNB Education Insights Survey highlights a significant disconnect in how families prepare for the future, revealing that while a vast majority of parents are actively planning for school costs, only 49% have a clear, structured education savings plan in place.

The comprehensive study sheds light on the financial realities of raising children, identifying affordability, investment planning, and financial education as the primary hurdles preventing families from securing their children’s academic futures.

The Planning Paradox: Commitment vs. Structure

According to the survey, 86% of parents are actively planning for their children’s education costs, demonstrating a deep commitment to their children’s financial futures. However, a stark gap remains in execution. Despite this high level of intent, less than half of these parents have established a dedicated, structured financial or insurance plan to support that educational journey.

Matthew Green, FNB life insurance product portfolio manager, notes that many parents are attempting to make provisions for their children but are falling short by not utilizing dedicated financial planning and insurance products.

The Hidden Costs of Education Inflation

A major contributing factor to this planning gap is a widespread misunderstanding of the total, long-term costs of education. Green explains that many parents only begin considering these costs once a child starts school and often limit their financial forecasting to the high school level. In fact, only 58% of parents factor tertiary education into their financial planning.

This short-sightedness is compounded by the reality of education inflation, which consistently outpaces normal inflation. As children progress through different phases—from pre-primary to primary, high school, and eventually tertiary education—the costs do not just rise; they experience a “step-up” level increase. Because many parents are only planning for the present, they are continuously underfunding the full educational journey.

The Risks of Relying Solely on Salary Income

When it comes to funding these escalating costs, the survey found that about two-thirds of families rely primarily on their regular salary income rather than dedicated savings vehicles.

Green warns that this approach leaves a child’s educational future highly vulnerable. If a parent’s income is suddenly put at risk due to unforeseen circumstances, the family is often forced to cut other essential costs just to keep the child in school.

To mitigate this risk, Green advises parents to start saving as early as possible and to utilize dedicated savings products. Crucially, he emphasizes the need for “ring-fenced” funding.

“It’s important to have ring-fenced funding for your child’s future education, not a general pool, because then those pools of funds may be used for other things and put your child’s future education at risk,” Green explained. He also highlights the critical role of income protection insurance to ensure that a child’s schooling remains secure even if the primary breadwinner’s income is compromised.

Accessible Financial Tools and Expert Guidance

Despite the challenges, the financial industry already possesses a wide array of sufficient investment vehicles to help fund education costs across various affordability levels. Green notes that FNB launched the Education Insights Survey specifically to spotlight this issue, as many parents simply lack the awareness or structure to utilize the tools available to them.

The products exist across the market and are highly accessible, but the bridge between awareness and action remains weak. Green’s primary advice for parents looking to close this gap is proactive engagement: reach out to a financial services provider to build a structured, ring-fenced plan.

By leveraging the right investment vehicles and insurance products early on, parents can ensure that their strong commitment to their children’s education translates into a secure, fully funded academic future.