Parents want the best for their children—and for many Asian families, education is the most important gift they can give. It’s not just about grades, but the opportunities that a solid education can unlock. That’s why the education industry in Singapore is booming, with private tuition alone estimated to be worth over a billion dollars annually.
But the real financial challenge comes not in primary school or secondary school—it comes at tertiary level, especially if you’re considering overseas studies.
How Much Does a Degree Really Cost?
In 2025, studying at a local university like NUS or NTU can cost upwards of S$30,000 per year. The good news is that government subsidies (through the MOE Tuition Grant) reduce the cost for Singapore citizens to below S$10,000 per year.
Some parents dream of sending their children abroad. While the prestige and exposure may be appealing, it’s also significantly more expensive than local options—especially after adding accommodation, insurance, and travel.
Here are examples based on a business degree:
Let’s take New York University as an example, since it has one of the largest international student populations in the US. Annual tuition fees are about S$83,577, but when you include room and board, health insurance, and travel, the total comes to roughly S$128,953 per year. Unlike Singapore, the UK, or Australia where a business degree typically takes three years, most US programs—including business degrees—run for four years, adding an extra year of cost.
At Imperial College London in the UK, annual tuition is about S$69,786, with accommodation and airfare adding another S$22,575.
For Australia, using the University of Melbourne as an example, tuition fees are around S$46,248 per year, with accommodation, health cover, and airfare adding about S$11,886.
Not forgetting inflation, it’s important to remember that education costs will rise over time. If you’re planning for your child’s university education 10 years from now, you can’t use today’s prices. We need to adjust for inflation to get a realistic estimate of the future funding requirement.
Based on long-term historical inflation rates, here are the planning norms we use for each country:
- Singapore: 2% per annum
- United States: 3% per annum
- United Kingdom: 3% per annum
- Australia: 5% per annum
With these adjustments in mind, the following table shows the projected cost for Singapore Citizens to pursue a business degree at selected universities, factoring in tuition fees, accommodation, health coverage, and airfares (but excluding day-to-day living expenses).
Even if your child doesn’t end up studying overseas, or chooses a different course, not preparing is a risk most parents don’t want to take. Once university admission arrives, you won’t have time to build a large investment base—you’ll need to pay within months.
That’s why many parents start investing early into an education fund.
Common Solutions
Endowment Plans: These are popular “education policies” sold by insurers. They usually come with:
- Capital guarantee
- Bonus payouts (if insurer’s investments perform)
- Death/TPD coverage
But the returns are modest. Most endowments invest primarily in bonds, with actual returns below 4% p.a. are not uncommon. You’re relying mostly on saving discipline, not capital growth.
Verdict: Safe but slow. You’ll need to save more to hit the same goal.
Investment-Linked Policies (ILPs): ILPs are also marketed for education planning. They invest in equity or bond funds and may offer life coverage.
- Higher return potential (depends on market and fund selection)
- Higher risk and fees (layered charges, surrender penalties)
Fees can eat into returns significantly if not managed well.
Verdict: Better growth than endowments, but requires cost control.
My Preferred Method: Glide Path + Low-Cost Funds
I prefer a clean, transparent, and customizable approach.
Instead of relying on opaque products, I use simple portfolios of low-cost ETFs or unit trusts, matched to the child’s timeline through a glide path.
For example, we can have a glide path with more stocks invested if children are still young, maximising the returns while shifting more towards bonds when they are older and closer to matriculation, and going to short term treasuries or money market funds when they are already in school.
| Time to Matriculation | Portfolio Allocation | Rationale |
| More than 10 years | 100% equity | Maximize growth potential |
| 5 to 10 years | 60% equity / 40% bonds | Reduce volatility while still growing capital |
| Less than 5 years | 20% equity / 80% bonds | Capital preservation becomes key |
| Studying | 100% cash / T-bills / Money Market Funds | Match drawdowns to tuition payments, and deposit in foreign currencies where applicable |
This glide-path approach helps balance risk and return across the entire journey leading up to your child’s university enrollment. It’s a level of control that endowment plans simply cannot offer, and ILPs are often limited by the restricted set of funds available within their platform.
When it comes to implementation, I favour low-cost, globally diversified ETFs or unit trusts. These avoid the concentration risk of any single country and offer broad exposure to global equity markets. For equity exposure, I typically use funds tracking indices like the FTSE All-World Index or the MSCI World Index. Factor-tilted funds can be considered to boost returns.
For fixed income, I prefer actively managed global bond unit trusts. While index investing works well for equities, bonds are more complex—active managers have a higher probability of adding value in the bond space, especially when managing duration, credit risk, and currency exposure.
One added benefit of this customised strategy is that we can control currency exposure. If your child is planning to study in the UK, for example, we can keep the portfolio in SGD during the early years. Then, in the final two years before matriculation, we gradually switch into GBP-denominated assets—such as GBP-based money market funds or short-term gilts—to reduce foreign exchange risk when tuition is due.
The Bottom Line
The beauty of a tailored plan is that it adapts to your goals, keeps risks manageable, and uses lower-cost investments, which means more of your capital compounds for your child. You get better performance potential, lower fees, and full control over asset allocation and currency timing.
Every family’s situation is different. If you’d like help creating a personalised education plan for your child, you can express your interest here.
