While parents aspire to secure a brighter future for their children, most have not set up an education fund, a survey released on Thursday by HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) showed.
Eighty-five percent of Taiwanese parents pay for their children’s education from day-to-day income, with only 19 percent utilizing a specific education savings or investment plan, and 67 percent worry that they are not doing the best for their children, the report said.
Globally, 74 percent of parents rely on day-to-day income, while 21 percent have set up dedicated education funds, it said.
Taiwanese parents face mounting education costs, but 35 percent plan to send their children abroad, and 93 percent expect their children to complete postgraduate studies.
Meanwhile, 90 percent of parents said that they would fully fund their children’s educations, it said.
Twenty-eight percent of parents indicated a willingness to dip into their own retirement funds, exceeding the global average of 20 percent, while 50 percent planned to cut spending on leisure and entertainment, the report said.
The survey indicated that Taiwanese parents generally spend up to US$56,424 at public institutions and US$72,528 at private institutions from elementary to undergraduate education, which is lower than the average of US$131,161 spent by counterparts in Hong Kong but slightly higher than the US$70,939 spent in Singapore.
Education funds are different from retirement plans, as they have a shorter time frame, HSBC’s Taiwan-based senior vice president of wealth development Curtis Chen (陳宥辰) told a news conference on Thursday.
Most parents grossly underestimate the actual cost of an education, which makes their children’s education susceptible to possible employment and income disruptions, Chen said.
“Parents are advised to begin the planning process upon the birth of their children and to seek financial advice according to their need and risk preferences,” Chen said, adding that 21 percent of parents are not well-informed about the cost of studying abroad.
UK-based market research organization Ipsos MORI in February conducted the survey of 8,481 parents in 15 countries and territories on behalf of HSBC.
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