“Given the current pace of education inflation, this means that for a child born today (2017), their final year of schooling will cost around R600 000 alone at the average private high school,” Discovery notes.
Discovery Life Research and Development head Gareth Friedlander told a media round table on 22 November that the R2.2m figure needed to finance a child’s private schooling career is an “astounding” statistic.
The changing demographic profile of first-time mothers makes this finding even more sobering. According to Discovery data, the average age of first time-mothers in SA has increased by 10% over the past 15 years to 26 years old. There are currently more first-time mothers over the age of 35 than under the age of 25.
“While having children at an older age may allow for a couple to build up more savings before the child is born, it also means that they are likely to have a financially dependent child by the time they reach retirement age.
“This could result in many individuals having to work longer into retirement or consume their retirement savings to pay for their children’s tertiary education,” Discovery states.
In addition, education inflation is outpacing salary growth. The group reports that, in South Africa, education inflation has outpaced headline Consumer Price Inflation (CPI) by between 2% and 4% a year.
Between 2010 and 2015 alone, the cost of education rose by around 50%.