Expatriate parents in the UAE will end up spending more than Dh1 million on their children’s education, financial experts claim.
According to a study by asset management group Old Mutual International, the total cost of sending a child to school in the UAE and on to university overseas can add up to nearly Dh1.5m.
The company, which sells investment products to savers, said parents can spend as much as Dh562,543 in fees alone by sending their children to a UK or US curriculum school from the age of five to 18 – averaging out at about Dh43,272 a year.
Adding in trips, bus services and uniforms, which Old Mutual calculated as another Dh15,684 each year from primary through to high school, brought the total cost of school education to about Dh766,437.
Old Mutual estimated that a four-year course at a university in the United States plus living expenses could set students back another Dh681,124 in total.
Last month, rival financial services group Zurich Life conducted a similar study, estimating that education covering 14 years, including preschool, primary, secondary school and university, totalled Dh933,945.
These included upfront preschool fees of Dh58,693, followed by six years of primary education at Dh35,230 a year totalling Dh211,382. By the time a child reaches secondary school, Zurich calculated that annual fees went up to about Dh43,052, totalling a little over Dh258,000 for the six years. It calculated that university fees in the US cost another Dh84,428 a year for three years, while living costs could reach Dh234,551 per student.
In Abu Dhabi, fees for British and American curriculum schools range from Dh23,000 to Dh43,600 a year at Glenelg School Abu Dhabi to between Dh65,000 and Dh96,333 at Cranleigh Abu Dhabi. In Dubai, fees for British or American curriculum schools range from Dh10,270 to Dh21,660 at Al Diyafah High School to between Dh50,379 and Dh100,759 at Repton School Dubai.
“School fees are increasing all the time. Fees in Abu Dhabi work out at Dh48,000 each a year so we spend nearly Dh100,000,” said Jane Roberts, who has two children at a British curriculum school. “We get a contribution of about Dh30,000 per child from my husband’s employer so I don’t think we end up spending quite as much as these estimates. Also their calculation for extras seems to be a little on the high side.”
lbarnard@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Engine: Four-cylinder 2.5-litre
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The flights
Emirates have direct flights from Dubai to Glasgow from Dh3,115. Alternatively, if you want to see a bit of Edinburgh first, then you can fly there direct with Etihad from Abu Dhabi.
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Located in the heart of Mackintosh's Glasgow, the Dakota Deluxe is perhaps the most refined hotel anywhere in the city. Doubles from Dh850 |
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How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
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Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
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