David Byrne, Savings and Investments Proposition Lead, Aviva Life & Pensions Ireland DAC

Saving for your child's secondary school and college expenses can be a big undertaking, but it's critically important. As a parent, you'll be keenly aware that a good education is the key to a successful future for your child. You're also probably aware that a good education isn't cheap, and it's not getting any cheaper.
The escalating costs of college may have you worried about how to pay for higher education. If you want to give your child the gift of a college education, free them from student debt and remove the stress of finding the funds yourself in the future, the time to plan is now. You're smart to think about how to start saving, even if your kids are still young.
For parents who paid for college using student loans or relied on their parents’ income to cover fees and living expenses, emphasising saving for their children’s education expenses may be an easy decision.
With that in mind, it’s never too early to start setting aside money. Getting a head start gives your money more time to grow over the long term and to potentially provide a healthy return on the investment when you need it most.
Is cash really king?
If you’re ready to start saving for higher education, you may be tempted to keep that cash reserve in a savings account. That’s because even accounts with the best interest rates don’t always keep up with the pace of inflation. If your child won’t be going to college for a while, investing your savings is a way you might see your money grow.
The Cost of Second and Third-Level Education
The cost of education in Ireland is rising steadily. While primary and secondary education is state funded, there are still significant associated costs.
In a recent Competition and Consumer Protection Commission surveyFootnote [1], over a third of parents (35%) with children going into second-level education had to pay for a laptop for homework, rising to 45% at fee-paying schools.
The TU Dublin Cost of Living GuideFootnote [2] for the 2024/25 academic year provides detailed breakdowns of third-level student expenses, including rent, utilities, food, travel, books, clothing, medical expenses, mobile costs, and social life. For students living away from home, the monthly cost is estimated at €1,600, totalling €14,402 annually, with rent being the largest expense at €895 per month. That includes the annual student charge which can be anything up to €3,000 per year.
How to Start Saving
Open a Dedicated Account: Having a separate account for education savings ensures that the money is not mixed with your regular finances.
Aviva offers several savings and investment products to help parents cover education costs. The Savings Plan allows for monthly savings starting at €100, while the Investment Bond is ideal for lump sum investments starting at €10,000. Both products offer flexible access to funds, tax efficiency, and expert management. These options provide potential for long-term growth, making them suitable for building a substantial education fund over time. By choosing Aviva's products, parents can ensure they have the necessary funds for their child's education without overwhelming financial stress.
Using the €3,000 Small Gift Exemption
One effective way to save for your child's education is by taking advantage of Ireland's €3,000 small gift exemption. This allows you to gift up to €3,000 per year to any individual without them incurring Capital Acquisitions Tax (CAT). This means that both parents can gift €3,000 each to their child annually, totalling €6,000 per year. Over time, these contributions can significantly boost your child’s education savings fund. If you open one of our Aviva Children’s Savings Investment Trusts, grandparents, God parents and relatives can also contribute to provide a solid savings base for your child or children without potentially incurring a CAT liability. Footnote [3]
Using the lifetime Capital Acquisition Tax (CAT) limits – for Lump Sums
Parents can give your children gifts worth €400,000 (over their lifetime) without them incurring CAT. Gifts over €400,000 are presently subject to CAT at 33%. The Children's Investment Trust helps you utilise their lifetime CAT limit. The minimum amount you can invest is €10,000.
This option is smart if you want to give the money the potential to grow by investing instead of just sitting in a savings account earning low interest. Any growth from the investment doesn't count as an extra gift for CAT purposes. Footnote [3]
Trustees manage the money until your child turns 18, making it a great way to contribute to your child's education meaningfully.
Talk to a broker and find the right solution for you
We’d encourage you to talk to one of the expert panel of brokers and ask them about Aviva Savings and Investments. You can find one of our brokers here.