Most parents surveyed by First National Bank said they had a financial plan for their children’s education, but fewer than one in four met the bank’s research definition of being genuinely prepared for the costs.
The inaugural FNB Education Insights 2026 survey found that 87% of respondents had some form of financial plan. However, only 24% met FNB’s definition of being genuinely prepared.
This classification was based on whether respondents’ education costs met or fell below their expectations and whether unexpected expenses arose no more than once a year. The published definition does not indicate whether the classification also assessed families’ accumulated capital, insurance arrangements, or preparedness for other risks over the full education journey.
Nevertheless, the findings point to a gap between having some form of plan and being prepared for the costs that arise across the education journey. Most respondents underestimated their expenses, salary was the leading source of funding, and reported confidence was lower among respondents in later education phases.
Lytania Johnson, chief executive of FNB, said many parents had some form of plan to cover future costs but continued to rely on current income to meet expenses “in the here and now”.
The report does not disclose the survey’s sample size, fieldwork dates, sampling method, weighting, margin of error, or the number of respondents in each household category. FNB said the research combined qualitative and quantitative findings from parents across income groups, school types, education phases, and major regions of South Africa.
It did not state whether the respondents were FNB clients or whether the quantitative sample was nationally representative. The results should therefore be understood as findings among the surveyed parents and cannot necessarily be applied to South African households generally.
Nearly two-thirds underestimate the cost
The research found that 62% of respondents underestimated their education costs for the coming year.
To measure the difference, FNB compared parents’ initial estimates with more detailed estimates produced through a structured exercise that included tuition, uniforms, transport, meals, and other expenses. Thirty percent overestimated their costs, while only 8% produced an exact match between their initial and detailed estimates.
The report divided education expenditure into four layers: tuition, general schooling costs, extramural and developmental costs, and lifestyle costs.
Stationery was recognised as an additional cost by 72% of respondents, followed by lunches at 71%, uniforms at 66%, transport at 54%, school trips at 48%, and textbooks at 44%.
The report said these costs can have a cumulative effect that makes the overall annual cost easy to underestimate.
Sixty percent of respondents said their total education costs were higher than expected. This ranged from 45% among households with one child at primary-school level to 70% among households with children in multiple phases, including high school.
A further 59% said they faced education expenses for which they had not budgeted multiple times a year. The proportion rose to 68% among households with a child at boarding school.
These findings measure different aspects of the cost gap. The 62% figure resulted from comparing an initial estimate with a more detailed estimate, whereas the other figures reflected respondents’ experience of costs being higher than anticipated and unbudgeted expenses arising during the year.
The biggest education cost shock may come earlier than expected
Parents generally expected education costs to rise gradually, with the largest increase occurring when a child entered tertiary education.
However, respondents who had progressed further through the education journey identified the move from primary school to high school as the most surprising increase.
According to the report, this earlier-than-expected rise means costs may already be substantially higher by the later years of high school. The subsequent move into tertiary education may then feel less steep by comparison, although FNB said the fee levels at both ends of the transition were higher than parents had initially anticipated.
One Western Cape respondent described the transition to high school as “the biggest shock”, having expected fees to remain broadly similar.
The research also found that only 58% of parents said their plans extended at least as far as tertiary education. This meant more than 40% did not have a plan extending beyond school. Fifty-five percent started planning only after their child was already at school, while 70% said, in retrospect, they would have planned differently.
Matthew Green, product portfolio manager at FNB Life Insurance, said better planning began with understanding the full journey instead of concentrating only on the next school year.
“When families have clearer visibility of future costs, they can make more informed financial decisions and prepare more effectively for what lies ahead,” he said.
Cost estimates were more accurate among tertiary households. Twenty-three percent produced an exact match between their initial and detailed cost estimates, compared with 8% of respondents overall.
Salary is the leading source of funding
Between 59% and 70% of respondents relied on salary to fund different categories of education expenditure, from tuition to unexpected costs.
General savings and investments were the next most frequently cited source, used by about 25% to 30% of respondents, while between 14% and 21% relied on bonuses or additional income. Dedicated education products were used by between 7% and 16%, depending on the expense category.
Paying education expenses from salary does not necessarily indicate poor preparation, but heavy reliance on current income can leave a plan vulnerable if the household’s circumstances change.
“Education costs continue regardless of changes in personal circumstances. School fees, university costs and other education expenses do not stop because a family’s income has changed,” said Himal Parbhoo, the chief executive of FNB Insurance.
He said families that relied solely on monthly income could quickly find their plans under pressure if an unexpected event occurred.
Parbhoo also cautioned that some contingency plans depended on general household savings or other resources that would have to compete with urgent priorities during a period of financial stress.
Confidence is lower at later phases
FNB classified respondents who rated their confidence at nine or 10 out of 10 as having high confidence. The proportion in this category stood at 66% among parents at the pre-primary or nursery-school phase, falling to 55% at primary school, 50% at high school, and 40% at tertiary level.
The findings compare different groups of parents rather than tracking the same households over time. They therefore do not establish that each parent’s confidence will decline as a child grows older. Nevertheless, the pattern is consistent with the report’s findings on unexpected costs and the financial pressure associated with later education phases.
FNB also reported differences between the four household profiles used in its research, which were based on the number of children, their education phases, and whether they boarded.
Confidence in funding education through to tertiary level was highest among households with children at boarding school, at 69%, and lowest among households with children in multiple phases, including high school, at 45%.
The corresponding figures were 56% for households with one child at primary school and 58% for households with a child at a tertiary institution.
Education is the second-most-protected household expense
The survey found that education was the second-most-protected household expense after housing.
Only 10% of respondents said they would sacrifice education spending if money became tight. By comparison, 26% said they would reduce savings and investments and 17% would cut short-term insurance expenditure.
Eleven percent would reduce spending in the survey category covering life, funeral, and medical protection, while 30% would cut grocery spending.
The responses indicate respondents’ priorities, but they do not establish that parents had already reduced their savings, insurance, or grocery expenditure. The survey asked what they would be willing to sacrifice if their finances came under pressure.
In addition, 43% said they would stretch their budgets substantially or make major sacrifices to place their child in their preferred school.
For advisers, the findings raise questions about how education spending fits within a household’s broader financial priorities.
Testing whether the plan is resilient
FNB associated structured planning with starting earlier, looking further ahead, using dedicated funding, and drawing on multiple funding sources.
Among parents FNB identified as having a structured plan, 60% were highly confident about funding education through to tertiary level, compared with 38% of those identified as having a general plan.
The report does not disclose the formal criteria used to assign respondents to these categories.
Bheki Mkhize, the chief executive of wealth and asset management at FNB, said starting earlier gave families more time to absorb future expenses, manage uncertainty, and expand the choices available to their children.
For advisers, the survey’s central message is that the existence of a plan does not necessarily mean a household has estimated the full cost or considered how the plan would withstand financial shocks.
FNB’s planning framework suggests testing how a client’s plan would respond if one income were lost, fees rose faster than expected, two children entered costly education phases at the same time, or general savings were required for another emergency.
The framework also suggests examining whether clients have included costs beyond tuition, how far into the education journey they have planned, and how education spending fits within the household’s broader financial position.
As the survey’s findings suggest, paying the bills today and being financially prepared for the full education journey are not necessarily the same thing.
