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Education Fees and How to save for them
Education Savings Plans give your children the finest gift you can.
- What It Is: Personalised monthly investment plans utilising unit trusts, endowments, or bank savings starting from R500/month.
- Why It Matters: It is an effective way to meet soaring primary, secondary, and university costs and to secure your child's academic future.
- Where & How: Accessible online nationwide through accredited financial advisor Peter Pyburn (FSP 2995).
Contact Peter Pyburn now to design an affordable plan and start saving today.
If you start saving today, you can afford quality education without breaking the bank and give your child the gift of education.
Education is not just a pathway to a brighter future, it's the key to unlocking endless possibilities for your child, because your child can be a doctor, an engineer or a brain surgeon!
Providing your child with a quality education is a challenge, especially when it comes to the cost.
But with proper planning and early saving, you can afford to pave the way for your child's success.
How Much Does Education Cost in South Africa in 2026?
The expenses associated with education, from primary school to university, can be daunting and is one of the largest financial commitments a family will undertake. Private primary school fees alone could amount to R 150,000 per year, while private high schools may cost up to R 200,000 annually.And do not forget about additional expenses like books, uniforms, and extracurricular activities, which can add up to R 50,000 per year.
With the cost of education on the rise, it's essential to start saving as early as possible to ensure you can afford these expenses when the time comes.
How Do You Calculate Future Education Costs?
To beat inflation, education funds require careful equity exposure and early saving commitment.Below is a breakdown of projected annual fee targets and the required monthly contribution to reach them, assuming a constant 6% inflation rate and an 8% net annual investment return.
| Education Phase | 2026 Base Cost (P.A.) | Cost in 5 Yrs | Req. Monthly (5 Yrs) | Cost in 10 Yrs | Req. Monthly (10 Yrs) | Cost in 15 Yrs | Req. Monthly (15 Yrs) |
|---|---|---|---|---|---|---|---|
| State Primary | R80,000 | R107,058 | R1,457 | R143,286 | R783 | R191,724 | R554 |
| Private High | R200,000 | R267,645 | R3,642 | R358,216 | R1,958 | R479,310 | R1,385 |
| Tertiary Degree | R150,000 | R200,734 | R2,732 | R268,662 | R1,468 | R359,483 | R1,039 |
In today's competitive job market, a matric certificate is no longer enough to guarantee success.
Tertiary education or specialized training has become essential for securing lucrative career opportunities.
Investing in your child's education not only increases their chances of finding a good job but also sets them on the path to financial independence and perhaps even assisting you during your retirement years should the need arise!
The Importance of Saving Early:
The earlier you start saving for your child's education, the better your final result will be.By starting early, you can take advantage of compound growth, allowing your savings to grow exponentially over time.
Even if you can only afford to save a small amount each month, the key is to start as soon as possible to maximize your savings potential.
If you start saving today, your savings could end up covering most of your school fee needs, when you need to pay them in the future.
You then have the freedom to invest any extra money towards your other personal goals, like your pension savings.
Your successful retirement investment begins with your child's education fund!
Choosing the Right Savings Plan:
There are various education savings products available, each with its own set of benefits and considerations.?If you have less than five years to save, a bank savings product may be more suitable due to its shorter investment horizon.
However, if you have a longer time frame, consider options like unit trusts or endowment plans, which offer flexibility and potential for higher returns.
>strong>Premiums from R 500 per month.
Unit Trusts vs. Endowments: Which Vehicle Is Best?
Choosing the right plan for you depends on your investment time horizon and marginal tax rate.| Feature | Unit Trusts | Endowments |
|---|---|---|
| Ideal Investor | Looking for full liquidity or have marginal tax rates below 30%. | High-income earners with marginal tax rates exceeding 30%. |
| Tax Treatment | Taxed at individual rate. Annual interest and CGT exemptions apply. | Fund growth is taxed at a flat rate of 30% inside the policy. |
| Liquidity Rules | High, with access capital at any point without penalty. | 5-year restriction period under Insurance Act guidelines. |
| Estate Planning | Forms part of the estate; subject to executor fees. | Beneficiaries can be nominated directly for immediate payout. |
Remember, the future belongs to those who prepare for it today.
An education plan is an ideal investment from grandparents, as your grandchild's success can lie in your hands.
The only way you can ensure that your child reaches his/her full potential is to save for future education fees on a regular basis.And the earlier your start, the easier it is.
10 Strategic Tips to Master Your Education Saving Investment
- Benefit from the value of Compound Interest early: Starting at birth versus age 6 reduces the required monthly premium by over 40%!
- Benchmark your investment against Education Inflation: Standard CPI (5–6%) is not enough; look at growth of 8%–10% p.a.
- Use Tax-Free Savings Accounts: Allocate up to R36,000 annually per individual tax-free.
- Use Endowments if your tax rate is greater than 30%: Top tax brackets benefit from the 30% tax ceiling offered by endowment policies.
- Ensure you have Short-Term Liquidity: For money needed in under 3 years, use money market or notice accounts to eliminate volatility.
- Grandparents' allowances: A grandparent may donate R150,000 to grandchildren without donations tax, assuming it is a genuine donation.
- Take a Premium Waiver: Guarantee your contributions continue uninterrupted if a you passes away or becomes disabled.
- Diversify across Asset Classes: Combine equities, bonds, and global assets within flexible unit trusts.
- Reduce investment risk as matric approaches: Gradually move capital from aggressive equities into stable income funds during high school.
- Automate Annual Premium Escalation: Link debit orders to automatic annual increases matching or exceeding inflation.
Planning for your child's future shouldn't compromise your own; balance education targets alongside your overall retirement planning strategy.
Simply call me and we can work out an affordable plan for you.
Frequently Asked Questions: Save for Education Fees.
How early should I start an education savings plan?
Start as early as possible—ideally from birth. Starting early maximizes the compounding effect, significantly reducing the monthly contribution required compared to starting when your child enters primary school.
Is an endowment or unit trust better for school fee savings?
Unit trusts offer complete liquidity and are ideal for taxpayers below a 30% marginal tax bracket. Endowments lock funds for 5 years but cap investment growth tax at 30%, making them superior for high earners.
Can grandparents contribute to a child's education plan in South Africa?
Yes. Under South African tax law, individuals can donate up to R100,000 per tax year completely free of donations tax, making education plans an ideal gift from grandparents.
Can I use a Tax-Free Savings Account (TFSA) for school fees?
Yes. TFSAs allow up to R36,000 per year (up to a R500,000 lifetime limit) per individual to grow entirely exempt from capital gains tax, dividend tax, and interest tax.
What happens if you pass away or become disabled?
By attaching a premium waiver benefit to the investment policy, the insurance company will continue making monthly contributions on your behalf until your child completes their education.
Contact me and let us set up the right education plan for you.
083 655 2164
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Peter Pyburn - Authorised Financial Services Provider has been fully licensed to provide expert financial services since 1991.Based in Sandton, Johannesburg, Gauteng, we specialise in comprehensive financial planning including: Death and Disability Cover, Retirement Planning, Investment Strategies, Medical Aid, Estate Planning.
FSP Licence 2995 and Medical Aid Accreditation BR 7428.
Why Choose Peter Pyburn?
Over 30 years of experience in financial services - Fully Licensed and Accredited for medical aid and other Personalised financial advice.
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Last update: August 10, 2026