High willingness to invest in education, but a gap in preparedness
According to findings related to the Financial Wellbeing Tracker, Gen Alpha parents generally show a stronger willingness to invest in their children's education. Their average monthly household income is higher than the overall median household income, and more than 90% of parents believe they should support their children until age 25. However, despite placing great importance on education, less than 40% have set up dedicated education savings for their children's future.
This phenomenon of "knowing it matters but not being fully prepared" highlights a core challenge in modern families' education planning: awareness is high, but concrete action is often delayed.
Rising education costs, where does the financial pressure come from?
Market research commonly indicates that in Hong Kong, the total cost of education from primary school through university for each child can average around HK$1 million to HK$1.5 million. Beyond basic tuition, expenses for tutoring, extra‑curricular activities, international curricula, admissions consultants and overseas exchanges also drive overall education costs higher and higher.
Key factors behind rising education costs
- Growing demand for international and cross‑border education: International schools and overseas study options typically charge higher tuition.
- The rise of whole‑person and technology education: STEM, AI, language and multi‑skill training programmes push up long‑term education spending.
- Intensified competition: Parents wish to provide more choices and flexibility for their children, indirectly increasing financial pressure.
In such an environment, if education funding is not built up early, the family's finances often need to shoulder a heavier burden within a relatively short period of time.
Starting from your goals: choosing suitable financial and investment tools
Once you have a rough idea of future education expenses, the next step is to consider how to accumulate funds in a systematic way. When selecting financial tools, you should consider three core factors: investment period, risk tolerance, and how certain the intended use of funds is.
Below is a conceptual comparison of common tools for education planning:
Investment tool |
Potential return |
Risk level |
Key features |
Points to note |
Time deposits |
Low |
Low |
Stable returns, low risk |
Hard to outpace inflation |
Bonds |
Medium |
Relatively low |
Provide relatively stable income |
Liquidity and prices may be affected by market conditions |
Equities |
Relatively high |
Relatively high |
Higher long‑term growth potential |
Greater short‑term volatility |
Savings insurance |
Medium |
Low to medium |
Part of the return is guaranteed |
Non‑guaranteed returns are uncertain |
Since education planning is usually a medium‑ to long‑term goal, many families choose to combine different tools to balance growth potential with stability.
Advantages of a trust‑style wealth accumulation plan
Recognising the financial pressures parents may face, Prudential has launched a wealth enhancement plan with trust - like features to address diverse needs.
Through the plans flexible legacy options, parents can set a designated death benefit amount to be paid directly to their children or specified family members, thereby creating cash flow for themselves or their loved ones. Payments can also be scheduled at different stages of a child’s life (such as university graduation, marriage or home purchase) or at specified ages, providing a safety net at key milestones.
In addition, with flexible policy currency switching, policyowners can change the policy currency within the same plan into US dollars, Hong Kong dollars, Renminbi, Australian dollars, Canadian dollars or British pounds, helping them cater for overseas education or retirement needs.
Case study: Long‑term planning to support a child’s educational journey
Chris and his wife have a daughter, Karen. From her early years, Chris understood the importance of education in his child’s development and wanted to build a solid financial foundation for her future learning and growth. His goals were clear: to preserve options for Karen to study and live in different parts of the world, without compromising the family's overall quality of life, while maintaining flexibility in financial arrangements.
In his planning, Chris adopted a long‑term mindset and used a savings solution with multi‑currency and flexible income features - Prudential Entrust Multi-Currency Plan, to make flexible use of the education reserves accumulated at different stages of his daughter's life.
- While Karen was attending international school, Chris utilised the flexible income option to withdraw a specified amount each year over a three-year period to cover tuition fees, allowing education expenses to be budgeted in a more structured manner. Karen later achieved strong results in the IBDP programme and received academic awards, further easing the family’s education burden.
- When Karen was preparing to go to university in Australia, Chris adjusted the funding arrangements according to actual needs and used the currency‑switching option to align with overseas education expenses. He withdrew the required education funds within the specified period, enabling his daughter to focus on her studies without having to compromise because of financial constraints.
This case shows that the key to education planning is not bearing all the costs at once, but rather engaging in early planning and phased deployment, so that children receive the support they need at the right time.
A child's dreams often begin with education, while a parent's support comes from long‑term, steady planning. Instead of waiting until the pressure becomes overwhelming, it is better to set a clear direction as early as possible and gradually build up an education fund, so that future choices can be made with greater confidence and ease.
