Overseas education costs 26pc of retirement savings

A child's international education can cost more than 25 percent of affluent parents' retirement savings in Hong Kong and as much as 66 percent in Indonesia, a survey by The Hongkong and Shanghai Banking Corporation showed.

In March, the British bank interviewed around 11,500 affluent individuals with investable assets of US$100,000 (HK$780,000) or more in 11 regions worldwide to explore the expenses of international schooling and the challenges.

The HSBC Global Quality of Life Report 2024 found that parents need to spend between US$192,000 and US$256,000 for each child on a three - or four-year degree program in top overseas study destinations, including the United States, the United Kingdom, Australia and Canada.

The funds for a four-year study are equivalent to 26 percent of the parents' pension in Hong Kong, the lowest among seven Asian regions surveyed, HSBC detailed in the report.

In Indonesia and India, the proportions stand at 66 percent and 64 percent, respectively, the highest among the seven markets. The figure in the mainland is 33 percent, while in Singapore it's 30 percent.

The results are in line with a previous survey by HSBC in Hong Kong, which showed parents reserved an average of HK$3.6 million per child to fund a 7.1-year UK education, including pre-university or postgraduate studies.

On the other hand, 95 percent of interviewed parents worry about their children's finances during overseas studies, followed by mental concerns at 75 percent and physical or health concerns at 71 percent. Among the financial concerns, the ability to set up essential banking services in their children's new place of education ranked first with 41 percent of respondents.

However, HSBC found that only 55 percent of rich parents in Asia have made a saving plan for their children's overseas studies.

Forty-five percent of surveyed Asian parents hoped for student scholarships and 31 percent expected the child to take student loans.

And 22 percent of the respondents would even consider disposing of assets for funds.

The funding requirements put parents under great stress, in addition to helping their child choose the right course and university and meet the enrollment criteria, HSBC reported, as overseas education has been an important investment for Asian families.

Simultaneously, only 9.4 percent of secondary school graduates opted to study outside the city last year, slumping from 14.5 percent in 2020, a poll by the Education Bureau showed.