Preface. Preface Planning early for your children's education costs. New trends in preschool education

Transcription

1 Building a brighter future for your children 2017

2 Index Preface Planning early for your children's education costs Estimates of children's education expenses 2-3 Estimates costs of studying of overseas study 3 Points to note for overseas education 3 New trends in preschool education Ever-rising kindergarten tuition fees 5 Overseas elite schools establishing branch compuses in Hong Kong 6 Deciphering the emerging popularity of special interest classes Team spirit through Lacrosse 8 The harppy way to improve concentration 8 STEM interest classes ride on tech-fever 9 Emerging technology-driven trends in primary and secondary education Interactive fun of ebooks 11 Flipped classroom reshapes traditional model of instruction 11 Global boom in STEM 11 Overseas study tours open a window to the world Study tours carry educational significance 13 Wide-ranging overseas study tours 13 Points to note when selecting an overseas study tour 13 Targeting promising industries and choosing cutting-edge subjects Big data analytics 15 Genetics 15 Biomedical engineering 16 Digital media marketing 16 Setting your goals 17 Building an education fund 19 Case sharing References for tuition fees Tuition fees for private primary and secondary schools in Hong Kong 23 Tuition fees for Direct Subsidy Scheme schools in Hong Kong Tuition fees for international schools in Hong Kong World university rankings in 2016 and average tuition fees 28 Preface Parents put their heart and soul into grooming their kids for future success. Education has a particularly important role in a child s growth and parents go to all lengths to put their children in their dream schools, hoping to give them a quality education. New developments in the local education scene, such as e-learning and STEM education, have reshaped the traditional model of instruction. Acquiring an in-depth understanding of the latest development of local education is the first step in making education plans for your children. In this booklet, we discuss new trends in the different stages of schooling from preschool, primary and secondary education to the selection of university courses, to keep parents abreast of Hong Kong s education development and help them make plans for their children s education and growth. Many parents arrange for their kids to attend interest classes or overseas study tours to help develop their innate potential and broaden their horizons. Today s interest classes and overseas study tours have become increasingly diversified and distinct. This booklet contains information on a variety of new interest classes and overseas study tours to give parents an idea of the latest trend in these activities. Amid ever-rising education costs, talk has emerged on the mind-boggling expenses, estimated at millions of Hong Kong dollars, for a middle-class family in Hong Kong to raise a child from birth to college graduation. Parents must therefore have ample financial resources if they wish to see their children win at the starting line. With information in this booklet on basic tuition fees at different institutions of learning, parents can start early with financial planning and budgeting to build an education fund for their children so that they can have an environment favourable for learning and growth. II III

3 Planning early for your children's education costs Planning early for your children's education costs Planning early for your children's education costs Nowadays, we have an increasingly diversified range of options for our children in terms of schools, curricula, learning models as well as further study pathways and locations. The greater availability of choice comes with ever-rising tuition fees and related expenses. Take academic year 2016/ 2017, tuition at 45 private schools has increased, 11 of which have registered growth between 7.1% and 20%. Some famous private primary schools have raised their tuition successively for years. Tuition at international schools that are immensely popular with local parents has also gone up. For academic year 2016/ 2017, 41 international schools approved for a tuition increase have raised their tuition by 7.1% to 20% and in some cases by more than 21% 1. Today, the education costs for raising a child from preschool to college graduation are estimated at millions of Hong Kong dollars. To save for their children s education, it is advisable for parents to start early with financial planning and budgeting. Estimates of children's education expenses Preschool Children's education expenses 2 Types Annual tuition (HKD) Year Total spending (HKD) Play group 18,000-25, ,000-25,000 (once per week) Preschool class 48, , , ,657 Kindergarten 9, , , ,500 (private non-profit/private independent) Kindergarten 75, , , ,092 (international school) Primary and secondary school University Children's education expenses 2 Types Annual tuition (HKD) Year Total spending (HKD) Primary school 7,370-76, , ,600 (Direct Subsidy Scheme/private) Primary school 83, , ,000-1,092,000 (international school) Secondary school 2, , , ,840 (Direct Subsidy Scheme/private) Secondary school 92, , ,400-1,360,200 (international school) Extracurricular activities/interest classes 14,616-42, , ,752 (primary and secondary school) Overseas study tours 1, , ,000-1,200,000 (primary and secondary school) Children's education expenses 2 Types Annual tuition (HKD) Year Total spending (HKD) University 42, ,400 (funded by local government) University 63, , ,000-1,157,664 (local private university/college) Estimates of education costs Assuming a child starts at a local private kindergarten and goes through DSS/private primary and secondary schools to a university funded by local government, the total spending on education would amount to between HKD 500,000+ and HKD 3,480,000. Assuming a child starts at an international school kindergarten and goes through international primary/ secondary schools and a local private university/college, the total spending on education would amount to between HKD 1,790,000+ and HKD 5,980,000. Note: based on the length of general education courses; duration of individual courses of study may differ. 1 Source: "Hefty tuition hike at 124 international DSS private schools", Ta Kung Pao, 9 September Source: "Do not forget tuition inflation when making education plans for your children", Metro Daily, 21 February

4 Planning early for your children's education costs Many students plan on studying abroad after leaving school, with a view to broaden their perspective and improve their competitiveness in the future job market. The UK, the US, Australia and Canada are among the most popular destinations to study abroad for Hong Kong students, attracted by the academic ambience, cutting-edge subjects and learning system offered overseas. While tuition and living expenses for studying abroad vary from place to place, tuition has been in an upward trend. Surveys have found that tuition in the UK has risen at an annual rate of 4.5% in the past ten years, beating the general inflation rate of 2.3%. It is important that the continued tuition inflation be taken into account when planning for your children s overseas study. Estimates costs of studying of overseas study New trends in preschool education Tuition and living expenses 3 for overseas study in four most popular destinations 3 Country Annual tuition Annual living Duration 4 of Total spending (HKD) expenses degree course (HKD) (HKD) UK 89, , ,246 3 years 709,458-1,495,158 US 117, , ,300 4 years 1,045,200-2,074,800 Australia 138, , ,600 3 years 802,800-1,579,500 Canada 53, ,400 64,900 4 years 472, ,200 Points to note for overseas study: 1) The duration of individual university courses, such as medicine, can run into 6 years. It is therefore advisable for parents to make provision for this when planning for tuition and living expenses. 2) In Australia, a fourth-year honours degree programme is available for students who have completed a three-year bachelor's degree course. However, only students with excellent academic results are eligible to apply for admission to the fourth-year honours degree course. Provision for extra expenses has to be made for this contingency. 3) Parents should watch out for fluctuations in exchange rates as they can directly affect the level of expenses needed to fund overseas study. Since the UK referendum on Britain s exit from the European Union, the pound sterling has fallen sharply, bringing down the education costs for overseas students in the UK. As a result, some parents originally planning to send their children to study in the US, Australia or New Zealand are now looking at the UK instead. 3 Source: websites of agencies offering overseas study services 4 Based on the length of general education courses; the duration of individual courses of study may differ 3 4

5 New trends in preschool education New trends in preschool education In selecting a kindergarten for their children, parents need to take a number of factors into account. These include educational philosophy, model of instruction, teaching quality, campus environment, geographical location, and even tuition and miscellaneous fees. In recent years, the local preschool scene has witnessed a new trend of overseas elite schools planning to establish branch campuses in Hong Kong. Under the Free Quality Kindergarten Education Scheme to take effect in academic year 2017/ 2018, eligible local non-profit-making kindergartens will receive a direct subsidy from the government. The amounts of subsidy for half-day, whole-day and long whole-day kindergartens will differ. Thanks to the scheme, approximately 70% to 80% of subsidised half-day kindergarten places will be free (see attached table for details). The tuition fees for half-day and whole-day/long whole-day kindergartens are capped respectively at HKD 9,960 and HKD 25,890 1 per year. Free Quality Kindergarten Education Scheme Eligible local non-profit-making kindergartens Subsidy (HKD) Half-day 33,190 Whole day 43,150 Long whole-day 53,100 Ever-rising kindergarten tuition fees While the new subsidy scheme will take some pressure off families, parents are advised to pay attention to the ever-rising kindergarten tuition, especially parents who intend to send their children to kindergartens not covered by the scheme. According to a news report 2, tuition at about 200 kindergartens for academic year 2016/2017 has increased by 10% or more compared with 2015/ Of these kindergartens, about 20 have raised their tuition fees by 20% or more and some even by 46%. Education Bureau data have shown that as of August 2016, kindergartens approved for a tuition increase had increased their tuition by 6.2%. In the past six years, the average cost of tuition at kindergartens has continued to rise. Average increase of kindergarten tuition fees in Hong Kong Tuition increase 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 6% 4.5% 4% 8.2% 8.3% 6.2% Overseas elite schools establishing branch compuses in Hong Kong Capitalising on the aspiration of parents to a quality preschool education for their children, overseas elite schools establish branch campuses in Hong Kong, with the promise of a unique educational philosophy and teaching model. Some celebrities are known to be enrolling their children at one of these schools. Founded in 2012 in Tuen Mun, Harrow International School Hong Kong is one of these popular schools. It is a traditional British elite school which now provides kindergarten, primary and secondary courses where students can choose to start boarding at Y6 when they are 11 years old. The Early Years Phase (K1 and K2) for students aged 3-5 follows the UK-based "Early Years Foundation Stage" (EYFS). Annual tuition for K1 and K2 is HKD 139,959 for academic year 2016/ 2017, including some miscellaneous fees Year In addition to the one for Harrow International School Hong Kong, the SAR Government granted another five sites in 2015 for the development of international schools. Two British boarding schools were granted the land with plans to set up branches in Hong Kong. Before their scheduled opening in the 2018 academic year, a mad rush is expected to be triggered for places in these schools. 1 Source: data from the Education Bureau website, not including enrolment fee, registration fee and miscellaneous fees 2 Source: "Tuition at 200 kindergartens up more than 10% and 758 kindergartens approved for average tuition increase of 6.2% for current academic year", Ming Pao, 8 September 2016 A local kindergarten can be as unique as a kindergarten set up by an overseas learning institution in terms of educational philosophy, education system, teaching model and curriculum. When choosing a kindergarten for their children, parents should look not just at teaching quality, but also tuition and other expenses. It is desirable for parents to start early with financial planning for building an education fund. 5 6

6 Deciphering the emerging popularity of special interest classes Deciphering the emerging popularity of special interest classes Deciphering the emerging popularity of special interest classes Whole-person development is the name of the game when it comes to bringing up a child. The development of personal interests and potential is as important as schooling. Today, many students participate in interest classes and extracurricular activities to their liking. But how much do you know about the latest trend in these wide-ranging activities? The following is information on some special interest classes for your reference. Team spirit through Lacrosse Lacrosse is a game of speed. It offers fitness training and improves hand-eye coordination. It is a team sport played according to simple rules. Teamwork is essential for lacrosse, making it a good exercise for building team spirit. A popular sport in Europe and the US, lacrosse is well loved by secondary and college students. It has been around in Hong Kong for a while, popular mainly among university students. The University of Hong Kong holds an annual lacrosse competition and a few former senior government officials were once enthusiastic supporters of this sport. In recent years, this sport has gained a wider following and has been picked up by growing numbers of young children. A child of 3 or above can learn to play lacrosse with a complete set of equipment that costs between approximately HKD 2,000 and HKD 3,000. Training courses are provided by sports associations and youth organisations for a monthly fee ranging from HKD 600 to HKD 800. The harppy way to improve concentration The harp is known for its beautiful sound and the elegant posture of its players. Compared with other musical instruments, the harp was less popular and received less attention from parents due to limited channels for learning the instrument. In recent years, however, the harp has gained greater awareness thanks to increasing public performances and introductory presentations organised by the media. Children of 4 to 5 years old can start to learn the instrument with a smaller lyre and move onto a harp as they grow older and master the skills. Learning the harp not only improve a child's hand-eye coordination and concentration, but is also a good way to release stress and emotions. Harp learners can take part in grading tests and the Royal Academy of Music runs two examinations per year in Hong Kong, covering all levels from Grade 1 to Advanced Performance level. Items Tuition and other costs for harp lessons Harp price Tuition (HKD) Entry level 3,000-10,000 Professional level Above 100,000 Harp lessons Taught by ordinary tutor Taught by celebrity tutor 800-1,000 Examination fee of Royal Academy of Music Technical course 1,110-2,450 (depending on the grade) Music theory 560-1,010 (depending on the grade) 7 8

7 Deciphering the emerging popularity of special interest classes STEM interest classes ride on tech-fever STEM stands for Science, Technology, Engineering and Mathematics. In recent years, a series of STEM interest classes have emerged with different themes and varieties ranging from intelligent robot design with electronic building blocks, 3D printing, mobile phone app development, multimedia electronic animation design and internet application, catering to the different interests of primary and secondary students. Unique in different ways, these interest classes are designed to develop an interest among students in science, technology, engineering and mathematics. Through these classes, students are encouraged to apply what they have learnt to research or design and enhance creative and analytical thinking as well as the capacity for problem solving and collaboration. Below is information on the varieties and tuition fees of a selection of STEM interest classes. Emerging technology-driven trends in primary and secondary education Help children develop the following potentials STEM interest classes Target Tuition (HKD) 1 Creative Analytical Problem Cooperation thinking thinking solving Intelligent robot design 3D printing Game design and Java programming 3D multimedia electronic animation design Primary and 1,000 junior secondary students Primary and secondary 2,100 students Secondary students 3,580 Secondary students 2,500 1 Tuition and fees for the interest classes are based on rough estimates 9 10

8 Emerging technology-driven trends in primary and secondary education Emerging technology-driven trends in primary and secondary education Rapidly growing information technology has become part of our daily lives and plays an increasingly popular and extensive application role in education. With e-learning as a growing trend in recent years, students can learn anytime anywhere through a simple tablet computer, making learning more diversified and interesting. Like e-learning, STEM education that covers Science, Technology, Engineering and Mathematics has aroused widespread interest and evolved into an emerging trend in the development of primary and secondary education. Overseas study tours open a window to the world E-learning refers to learning with information technology as the medium, transcending the limitations and restrictions of traditional models of instruction in the form of classroom teaching and passive learning devoid of interaction. E-learning encourages students to take initiative over their learning by using e-textbooks to facilitate self-study, with teachers playing a supportive and guiding role. Learning is no longer confined to the classroom; it can take place anytime, anywhere through a tablet computer and the Internet. In recent years, some schools have even encouraged students to learn by using e-textbooks and e-learning resources. Interactive fun of ebooks E-textbooks are user-friendly. Students can download textbooks to their tablet computer for revision at any time. A carrier of subject knowledge, e-textbooks come with video clips, interactive games, exercises and tests to provide learning experience in different aspects. Compared with traditional textbooks, e-textbooks not only stimulate an interest in learning among students, they can also take the weight of school bags off their shoulders. It is expected that ebooks will become one of the important directions of e-learning development. Flipped classroom reshapes traditional model of instruction "Flipped classroom", a wildly popular concept in Europe and the US in recent years, is an emerging model of instruction derived from the development of e-learning. Concept and features: This new teaching method requires students to study teaching materials at home and come back to school to finish their homework with teachers and other students or participate in group discussions and class activities. It has reversed the traditional model of teaching where students do their homework at home. It shifts instruction to a learner-centered model and makes the classroom more interactive. Teachers adopt a tailored approach to instruction based on the performance of students and an understanding of how well they have mastered the content of a subject area. Reflecting its popularity with local schools, the "flipped classroom" model has been applied to different subjects. Instructional content and curriculum information are uploaded to e-learning platforms and video clips produced for watching and work preparation by students. The "flipped classroom" is expected to become another important direction of e-learning development. Global boom in STEM STEM education values the importance of applying knowledge acquired from different subject areas to daily lives and the development of creative thinking and problem solving skills. It is considered key to improving the global competitiveness of a nation, which explains the aggressive efforts seen around the world in promoting STEM education. In 2013, more than 30% (37%) of the international students in the US pursued STEM studies. The number of these STEM students, estimated at 300,000, represented a 27% increase compared to five years earlier. STEM students in the UK, Canada and Australia accounted respectively for 26%, 25% and 21% 1 of the total population of international students in these countries. Hong Kong has also actively developed STEM education, with many primary and secondary schools working intensely on introducing the STEM concept into their curricula and extracurricular activities, with a view to developing a wide variety of school-based programmes. As proposed in the 2017 policy address, the SAR Government is prepared to provide each public-sector secondary school with an additional subsidy to help promote STEM education. Currently, paper airplane and model car making, intelligent robot design, mobile phone programming and 3D printing are common STEM-related educational activities at the school level. Through these activities, students can gain first-hand experience in learning, working and thinking as a team to solve daily life problems using the knowledge acquired. During the process, students can develop their research, problem-solving, collaboration and creative capabilities that are vital to learning and working in the future. 1 World education news & reviews: International student mobility trends 2014-The upward momentum of STEM fields 11 12

9 Overseas study tours open a window to the world Overseas study tours open a window to the world Overseas study tours and exchange programmes are now commonplace. During long holidays, particularly Easter or summer breaks, many schools or study tour agencies organise a variety of overseas study tours for primary and secondary students. Most study tours organised by schools are academically-oriented and the fees charged may be more competitive, while the packages offered by tour agencies provide more theme options and are probably more costly. Targeting promising industries and choosing cutting-edge subjects Study tours carry educational significance Most study tours organised by schools carry an academic theme. For example, some primary and secondary schools have designed study tours themed on Chinese history and cultural education. There have also been study tours to Macao to retrace the journeys of Catholic missionaries in the Ming and Qing Dynasties from the former Portuguese enclave to mainland China. On a tour to Singapore designed to develop their self-care abilities, students were placed with their host families and asked to help with housework. No tour bus or meal was booked and the students were required to plan their routes of public transportation to see the sights. They were also asked to visit local restaurants where they could train to be independent and hone their English skills. In addition to overseas study tours during long holidays, private and DSS schools also organise overseas study weeks during the school term, featuring themed experiential learning activities for students of different ages. Wide and varied, the themes of study tours focus on different areas of interest, such as learning about environmental protection and sustainable development in Japan and the architecture and arts and culture of Netherlands. Tour costs range from around HKD 10,000 to more than HKD 20,000, depending on location and length of travel. Wide-ranging overseas study tours The overseas study tours organised by study tour agents feature a greater variety of themes, including learning English, Japanese, Korean, French, Spanish and other languages locally as well as military training, farming, gardening, architecture, history and culture, drama, etc. A popular choice in recent years, experiential study tours to overseas universities give students the opportunity to attend classes and live in the dormitory of top universities like Oxford and Cambridge in the UK and even challenge themselves to an admission interview. There is also an opportunity to meet with university scholars and use campus facilities including laboratories and libraries. This experience will give students a head start on preparing themselves for admission to a good university. Points to note when selecting an overseas study tour Reference fees for overseas study tours Type Fees (HKD) 1 Study tours themed on language/ 40,000-50,000 special interests (16-20 days) Experiential study tours to overseas 40,000 universities (8 days) Take note of the details of the overseas study tour you are interested in. If the programme includes an exchange tour to a top university, check if students from other countries will join to make sure that there is an opportunity to communicate in English and learn more about a different culture. Students on an overseas study tour may be placed with their host families. Parents should enquire about the background of these host families and make sure appropriate medical arrangement is in place in case their children fall ill. Parents should also check if potentially dangerous activities will be carried out during the overseas study tour, such as swimming, horseback riding, boating or even diving, and help their children assess if they are fit to join these activities. Take a good look at the programme content and check, in particular, if there is a good balance between study and travel. If the programme leans heavily towards study with little opportunity for participants to travel, then the meaning of the tour will be lost. The opposite is also true if the programme is overly focused on travel and students spend every day sightseeing with little opportunity to learn. 1 The estimated expense for oversea study group 13 14

10 Targeting 海外遊學 promising 放眼世界 industries and choosing cutting-edge subjects Targeting promising industries and choosing cutting-edge subjects If your children are preparing for university, the courses they are going to choose will have a bearing on their future work and career development. They should look for subjects that offer potential career prospects in areas where there is long term growth potential and the demand for trained talents is desirable. To give students and their parents some idea and insight on this, here is a selection of hot subjects related to fields that still promise tremendous growth potential with acute demand for talent. Big data analytics The 21 st century is an era of big data. We produce large quantities of data every day from activities such as online shopping and mobile financial transactions. By screening, consolidating, summarising and analysing big data, companies can gain a good understanding of their business performance and work on product improvement and development. Big data analytics is applied extensively in many fields. Professional help in big data analysis is required for extracting and analysing useful information from complex data to formulate different decision-making options. Given the extensive applicability of their skills, specialists in big data analytics are eagerly sought after in many industries, providing career opportunities for big data experts in Hong Kong and around the world. A number of local universities and colleges offer relevant courses as follows: Relevant courses run by local universities Bachelor of Science (Quantitative social data analytics) Bachelor of Business Administration (Business analytics) Bachelor of Science (Honours) in Data science and business intelligence Starting salary: Approximately HKD 12,000~14,000 1 Career prospects: Expected monthly salary between HKD 40,000 to HKD 60,000 with 5-8 years of work experience 2 Biomedical engineering The increasingly serious global problem of aging leads to ever-growing demand for medical care. Not only more front-line paramedics are needed to look after patients, technology and engineering professionals are also required for research and development of new medical equipment to support diagnosis and treatment. The emerging concept of biomedical engineering in recent years has given birth to the profession of biomedical engineers. A biomedical engineer is responsible for research and design of new products and devices as well as providing support in diagnosis and treatment. For example, nano medical devices, which have become popular in recent years, are one of the focuses of biomedical engineering research. The current demand for biomedical engineers is keen around the world. To compete for talent in this area, Australia has allegedly made biomedical engineering a qualified profession for people seeking to emigrate Down Under. The US Department of Labor has reportedly projected an up to 72% increase in the demand for biomedical engineers from 2008 to 2018, outpacing other occupations. Hospitals in Europe and the US hire biomedical engineers in their biomedical engineering departments to handle medical equipment procurement, installation and maintenance 5. Biomedical engineers also work in healthcare institutions, medical technology companies and pharmaceutical companies, with no shortage of career opportunities. Universities in Hong Kong as well as the UK, the US and Australia provide courses in biomedical engineering. Relevant courses run by local universities Bachelor of Engineering in Biomedical engineering Bachelor of Science (Honours) in Biomedical engineering Bachelor of Engineering (Bioengineering) Starting salary: HKD 12,000~14,000 6 Career prospects: Under the Electrical and Mechanical Services Department trainee program, candidate with 5-7 years of relevant experience are qualified to be a member of The Hong Kong Institution Of Engineers. The maximum salary of a qualified engineer is up to HKD 95,215 7 Genetics Medical science is fast advancing with rapid development of medical technology. With the cracking of the genome, the mysterious causes, previously unidentified, of some illnesses and even their cures can now be found with the help of genetic research. Genetics now enjoys extensive applications in many fields, including medical diagnosis, pharmaceutical research and development, crop yield and quality improvement, etc. The medical sector and drug manufacturers have actively invested in research into gene technology and its application, driving demand for talent in this area. Such keen demand in Hong Kong, mainland China and other countries provides growth opportunities for professionals in genetic research and related work. A number of local universities in Hong Kong provide relevant courses. Relevant courses run by local universities Bachelor of Science in Biomedicine Bachelor of Science (Biotech) Bachelor of Biomedical Science Starting salary: HKD 13,000~15,000 3 Career prospects: Expected monthly salary between HKD 35,000 to HKD 45,000 with 4-5 years of work experience as a research scientist 4 Digital media marketing New media have grown rapidly in recent years, reshaping the business, marketing and sales models of companies. Through online platforms like Facebook and Instagram, products and services are promoted and brand images enhanced. Promotion is no longer restricted to print ads as new elements like VR technology and interactive motion sensing games can also be used. Digital marketing is the way of the future, which will lead to ever-rising demand for marketing talent. Local universities have incorporated digital marketing as a specialised subject in their BBA programmes. Relevant courses run by local universities Bachelor of Business Administration (Information systems) Bachelor of Business Administration (Honours) (Marketing information management) Starting salary: Approximately HKD 18,000 8 Career prospects: Monthly salary of around HKD 45,000 for middle management staff and up to HKD 85,000 for senior management 8 1 Source: [17% of employers to increase hiring, IT professionals most sought after] HKET TOPick, 8 March Source: Recruit Magazine 8 April Source: [Biomedical science, a new cross-disciplinary subject] Ming Pao Weekly, 29 January Source: Prenetics Limited 5 Source: [Engineering scientific research to change all aspects of daily life] Recruit, 6 May Source: [Full employment for biomedical engineers] Hong Kong Economic Times, 6 September Source: Electrical and Mechanical Services Department website 8 Source: [Digital marketing offers highest starting salary at $25K, bringing creativity and data together] CTgoodjobs, 25 April

11 Targeting 海外遊學 promising 放眼世界 industries and choosing cutting-edge subjects Setting your goals Understanding your needs Do not forget to factor in inflation when trying to work out how much you will need to fund your children s education. In preparation for setting a goal, ask yourself the following questions. How do you plan for your child s education? When are the education funds needed? For how long do you expect you will need to save to reach your goal? How can you achieve your goal? Through lump sum or regular savings plans, single assets or a diversified investment portfolio? What are your sources of saving? Do you need professional advice to help you understand your needs and make financial plans to meet your education savings target for your children? Inflation: Education costs will continue to rise at a rate higher than general inflation. Never underestimate the impact of inflation as it may lead to significantly higher costs in the future than the level currently planned for. You need to know clearly your children s education needs before setting a goal. Start planning early You need to set a monthly savings target and your investment time horizon. Start planning early and you can reach your goal faster with less money. You can set short-term and long-term savings plans. The short-term plan provides liquidity to meet the costs of daily schooling and extra-curricular activities. The long-term plan is designed to prepare for your children s secondary and university education through generating stable savings income to increase potential return. Choose a financial plan Most parents in Hong Kong are desirous of allocating 45% 9 of their savings into an education fund for their children. In this case, the time, duration, risk and other considerations need to be taken into account before arriving at an investment decision. We will generally recommend a diversified investment approach to avoid concentration of funds or savings in a single asset. Make sure your education fund provides guaranteed value It is vitally important to ensure that your education fund is protected against all possible impacts of accidents. This means that your children s education will not be disrupted by any accident or misfortune like accidental death. The beauty of an insurance plan here is the wealth protection and growth it can provide to help you reach your goal. Even in the event of an unfortunate accident befalling you, you will be protected by a waiver of premium. With coverage for death and disabilities, your education fund will continue to work for you, shielding your children s education from the consequences of any untoward event until they have reached the designated age. Management and monitoring You need to watch closely the investment and savings plans for your children s education fund to ensure that everything goes as planned. You need to monitor your investment portfolio regularly and make readjustments where and when appropriate. When developing your children s education plan, you need to factor in inflation and the rising tuition and living expenses. Market information shows that the number of DSS schools in Hong Kong has grown markedly over the past 10 years, with tuition also showing an upward trend. Based on 6 years of primary and 6 years of secondary education, the total tuition could exceed HKD 734, Source: HSBC study report [The Value of Education-Foundations for the Future] 10 Source: EDUplus.hk 17 18

12 Targeting 海外遊學 promising 放眼世界 industries and choosing cutting-edge subjects Building an education fund Solutions to help you prepare adequate education funds Your needs Ensuring your children s education is adequately provided for Ensuring the continuity of your education plan Enhanced potential returns and get the most return from every dollar of your savings Flexible terms to pay and receive benefit payouts Insurance Solutions Target savings insurance and annuity plan Target savings insurance, annuity and other life insurance Annuity plan with rollover payment options Target savings insurance and annuity plans Insurance plan Benefits Guaranteed cash amount to be built within the policy years to help you build your education fund Life insurance or death benefits to provide financial security for your family against misfortune events. Payor s benefit 11 - to waive the future premium payments in the case of an unfortunate event (e.g. premature death, disability) until your children reach a specified age to ensure the continuity of your education fund. Rollover of benefit payments enables you to accumulate interest and enjoy maximum savings returns. Flexible options on payment terms, accumulation periods and benefit payments method to help you match your personal financial and spending needs. For example, you can option to withdraw your annuity payment in one lump sum at the end of the policy maturity to pay tuition. Your needs Planning for the future - early planning is not an impossible mission. Setting up an investment plan within a predetermined timeframe can help you provide for your children s future education Investment and wealth management plan Insurance Solutions Unit Trusts 12 Foreign Currency Trading 12 Bonds 12 Stocks 12 Benefits Tailored investment portfolio - select a variety of funds and assets from a specific investment universe based on your target rate of return and risk appetite. Potential return on foreign currency investment can help you achieve education goal Cash flow generation Bonds deliver a stable and predictable stream of income, while offering predictable repayment of principal at maturity. You can access international stock markets in Hong Kong and other parts of Asia as well as the US and the UK. You can invest a lump sum in securities or you can purchase stocks on a monthly basis for accumulation of savings over time. Structured investment products 12 You can build a portfolio with structured investment products for an opportunity to generate higher potential returns at lower capital risks. Note: The information shown in this booklet is not for sales purpose and it is hypothetical and for illustration only. It is not intended to constitute a recommendation or advice to any prospective customers and is not intended as a substitute for professional advice. You should not act on any information in this document without seeking specific professional advice. You may find the wealth management plan you need by undertaking an assessment for financial planning. 11 Subject to product terms and underwriting process; extra premium may be required. 12 Investment involves risks. You should carefully consider whether any investment product or service mentioned herein is appropriate for you in view of your personal circumstances

13 Case sharing Education fund planning: Case 1 Education fund planning: Case 2 Personal profile Existing assets Personal profile Existing assets Name: Age: Job: Family status: Goal: David and Tiffany 35 and 34 respectively Both department heads in a business organisation Married, with one son Setting up a savings plan to provide for their son s home purchase or study Savings deposits = HKD 450,000 Stocks = HKD 1.63 million Owner-occupied home = HKD 8.5 million (with outstanding mortgage repayments of HKD 3.5 million) Accrued interests in pension funds = HKD 620,000 Outstanding mortgage repayments: HKD 3.5 million Total assets = HKD 7.7 million Name: Keith Age: 44 Job: Administration manager at an accounting firm Family status: Married, with a 10-year-old son Goal: sending his son five years later to the UK to study at Grade 10 (equivalent to Form 4 in Hong Kong) Savings deposits = HKD 1.2 million Stocks and funds = HKD 1.5 million Accrued interests in pension funds = HKD 830,000 Owner-occupied home = HKD 4.2 million Total assets = HKD 7.73 million (mortgage paid off) Family income and expenditure per month Family income and expenditure per month Income = HKD 114,000 Mortgage repayment = HKD 14,000 Family and personal spending = HKD 66,000 Surplus = HKD 34,000 Income = HKD 65,000 Family and personal spending = HKD 47,000 Surplus = HKD 18,000 Parents wish to see their son win at the starting line : A graduate of elite traditional schools, Tiffany aspires to a successful future for her son. The linking with different primary and secondary schools was an important consideration in her decision to select a kindergarten for her son. Hoping to see her son win at the starting line with good prospects in the future, she eventually managed to get her son into an elite kindergarten. David is planning on buying a property for his son so he can grow up not having to worry about purchasing a home. With current monthly mortgage repayment of HKD 14,000 and an outstanding loan balance of HKD 3.5 million, he is looking at properties priced at HKD 4.18 million. At this price and based on a down payment funded by 50% of his existing assets including savings deposits, the new property would entail for David an additional mortgage repayment of HKD 9,376 per month at current interest rates. Home mortgage could easily throw family finances off balance It normally takes 20 years or more to repay a mortgage loan. However, if a couple cannot continue with loan repayments due to a change of work by one partner and the rent received cannot cover the mortgage repayment required, the couple may face cash flow problems and may need to increase borrowing, which will have a serious impact on their family finances. Recommendation to David and Tiffany David wishes to buy a property with his son s future well-being in mind. However, after performing a financial analysis, it is recommended that the couple should select a savings plan that is within their risk capacity with savings protection to fund their son s home purchase or education. Putting everything into one single asset would incur unnecessary concentration risks for the family. Adequate savings to provide for overseas study Keith intends to send his son to an overseas university. He hopes his son can go early to expose himself to a foreign culture and broaden his perspective and thinking. He is planning to fund his son s education with the return on investments over the next five year, but relatively high risks may be incurred as the return on investment is not predicable and the resulting shortage of funds can disrupt the education plan. It is therefore important to have adequate funds before considering sending his son to study abroad. Forecast funds needed for overseas study in 5 years Duration of study Tuition and living expenses per year Total funds required Running a monthly surplus of HKD 18,000, Keith can save an additional HKD 1.08 million over the next 5 years, provided that his family s income and expenditure remain unchanged during this period. Together with deposits and investments worth HKD 2.7 million, Keith can afford his son s overseas education. However, the money left after paying the education costs may not be sufficient to meet the retirement needs of Keith and his wife. Therefore, Keith should consider how to make his deposits and investments work more effectively for wealth building. Currently, stocks and funds account for 55.6% of his disposable assets with the remaining 44.4% held in deposits. To be able to cater to his son s education needs, Keith must rigorously control the level of his risk investments. Considerations In 5 years time, Keith will start withdrawing money from his nest egg to pay his son s tuition. However, he may have to sell his stocks for cash to fund the tuition in the case of undesirable performance of the investment market or his investment portfolio. Recommendation to Keith 4 years of secondary and 3 years of university Around HKD 400,000~500,000 1 Around HKD 2.8 million~3.5 million 1 He should start changing the risk appetite of his portfolio from now through comprehensive asset allocations covering his stocks, funds, deposits and monthly surplus for generating, at lower risks, expected higher returns than bank deposits and inflation. He also needs to consider life insurance plans with saving element tailored to different stages of life, with a view to providing for the education they desire for their son. 1 The funds actually required may vary due to inflation and exchange rate fluctuations and are subject to review from time to time

14 References References for tuition fees Tuition fees for private primary schools and secondary schools in Hong Kong Private schools District School name Annual tuition (HKD) Year Central Kau Yan School 49,000 16/17 and Western Sacred Heart Canossian School 37,000 16/17 (Private Section) St. Clare's Primary School 33,500 16/17 St. Louis School (Primary Section) 34,500 16/17 Wan Chai Raimondi College (Primary Section) 41,000 16/17 Rosaryhill School (Primary Section) 40,800 16/17 St. Paul's Convent School 45,000 16/17 (Primary Section) True Light Middle School 41,610 16/17 (Primary Section) Eastern Kiangsu and Chekiang Primary School 37,500 16/17 Southern St. Stephen's College 76,100 16/17 Preparatory School The Independent Schools 167,530 16/17 Foundation Academy Victoria Shanghai Academy 118,700 16/17 Yau Tsim Mong Diocesan Girls' Junior School 60,000 16/17 Kowloon City Alliance Primary School, Kowloon Tong 42,700-51,750 16/17 Creative Primary School 99,220 16/17 First Assembly of God Primary School 40,000 16/17 and Kindergarten Holy Trinity Primary School 41,000 16/17 Kowloon Tong School (Primary Section) 48,000 16/17 Kowloon True Light Middle School 44,940 16/17 Munsang College Primary School 39,600 16/17 Pooi To Primary School 33,800 16/17 Pui Ching Primary School 46,500 16/17 St. Johannes College (Primary Section) 56,000-57,000 16/17 Sham Shui Po Chan's Creative School 52,800 17/18 Delia English Primary School 26,400 16/17 and Kindergarten Kowloon Rhenish School 41,500 16/17 St. Francis Of Assisi's 40,600 16/17 English Primary School Tak Nga Primary School 34,000 16/17 Tsung Tsin Primary School 48,860 (English Primary School 16/17 and Kindergarten Section) /70,580 (International Junior School Section) PLK Choi Kai Yau School 69,300 16/17 Wong Tai Sin Good Hope School (Primary Section) 37,310-38,120 16/17 International Christian Quality 52,100 16/17 Music Secondary and Primary School Our Lady's Primary School 30,000-30,500 16/17 Kwun Tong St. Joseph's Anglo-Chinese 36,000 16/17 Primary School Tsuen Wan Rosebud Primary School 62,000 16/17 Sai Kung Hong Kong Adventist Academy 76,000 16/17 Yuen Long Gigamind English Primary School 79,200 16/17 Tai Po St. Hilary's Primary School 62,000 16/17 Tuition fees for private DSS schools in Hong Kong Private DSS schools District School name Annual tuition (HKD) Year Eastern HKUGA Primary School 26,200 16/17 Hon Wah College (Primary Section) 17,150 16/17 Southern St. Paul's Co-educational College 60,000 16/17 Primary School St. Paul's College Primary School 30,000 17/18 Yau Tsim Mong PLK Camões Tan Siu Lin Primary School 15,800 16/17 Kowloon City Diocesan Boys' School Primary Division 42,750 17/18 PLK Lam Man Chan English 12,800 16/17 Primary School Sham Shui Po Lingnan University Alumni Association 15,103 16/17 (Hong Kong) Primary School St. Margaret's Co-educational 41,300 16/17 English Primary School Ying Wa Primary School 15,000 16/17 Kwun Tong Fukien Secondary School 30,000 16/17 Affiliated School Kwai Tsing Delia (Man Kiu) English Primary School 7,370 16/17 Tuen Mun PLK HKTA Yuen Yuen Primary School 10,500 16/17 Yuen Long ELCHK Lutheran Academy 36,750-65,910 16/17 W F Joseph Lee Primary School 13,700 16/17 Sha Tin HKBU Affiliated School Wong Kam Fai 37,000 16/17 Secondary and Primary School Pui Kiu College 23,900 16/17 Sai Kung Evangel College 16,300 16/17 G.T. (Ellen Yeung) College 34,100-38,280 16/17 PLK Luk Hing Too Primary School 13,000 16/17 The Hong Kong Chinese Christian 26,040 16/17 Churches Union Logos Academy Tuition fees for DSS secondary schools in Hong Kong DSS secondary schools District School name Annual tuition (HKD) Year Central and Western St Paul's Co-Educational College 55,000 17/18 St Paul's College 38,000 16/17 Wan Chai St Paul's Convent School 25,000-27,500 16/17 Confucius Hall Secondary School 4,280 17/18 CCC Kung Lee College 13,710 16/17 Southern HKUGA College 35,000-40,000 16/17 St. Stephen's College 64,500 16/17 Hon Wah College 17,150 16/17 Eastern Kiangsu-Chekiang College 5,915 16/17 Pui Kiu Middle School 7,540-11,480 18/19 The Chinese Foundation 15,600-20,800 16/17 Secondary School Northern Fanling Lutheran Secondary School 5,500-6,500 16/17 Yau Tsim Mong Diocesan Girls' School 38,000 16/17 HKMA David Li Kwok Po College 29,240-34,000 16/17 Kowloon Sam Yuk Secondary School 2,070-2,310 16/17 Kowloon City Diocesan Boys' School 45,900 16/17 Heep Yunn School 32,000-33,000 16/17 HKICC Lee Shau Kee 26,000-27,600 16/17 School of Creativity PLK Ngan Po Ling College 31,000 16/17 Workers' Children Secondary School 3,672-9,048 16/17 Source: Primary & Secondary School Profiles by the Education Bureau and the schools websites 23 24