Third-level fees may have been abolished, but the cost of keeping a student at college just grows and grows. According to Andrew Clinch of independent financial brokers Clinch Brokers, many parents have been lulled into a false sense of security by the abolition of fees, and no longer embark on long-term savings plans to finance college. "People have stopped doing what they have traditionally done because they are no longer faced with fees," he says. "People forget there are maintenance costs - which can be hefty when children are living away from home." Despite the stockmarket crashes of 1987 and 1989, with profits savings plans have proved "very successful in the last five years in terms of returns". However, the market downturns have served to deter people from embarking on long term savings plans and "the habit of saving has drifted away", he says. "We get only a lukewarm response to education savings plans nowadays. People are tending to pay for maintenance out of day-to-day income."

Pips, peps and with profit endowment plans enable people to save on a regular basis and suffer no tax liabilities on the proceeds. "Unlike savings certificates which mature on a particular date, with these you can go on saving as long as you like, and just draw from them as you need. This form of regular saving has shown that it gives better returns than any other over the long term."

A major benefit, Clinch notes, is that although payments are made out of earned income, there are no further tax liabilities on the proceeds. "If you are paying tax at the top rate and take, say, £1,000, out of your current income for third-level maintenance, it will cost you £2,000. However, taking £1,000 out of your savings plan will cost you £1,000. There's an enormous advantage in plucking at least part of the expenses off the shelf, rather than out of current income."

It may be too late for parents to take out savings plans for offspring about to embark on college careers. However, parents with younger children, would be well advised to consider this option. "You can't start soon enough. Every year of saving makes a significant difference to the amount in the kitty."

If you're a parent or grandparent - or even family friend - with substantial assets, which are likely to attract capital acquisitions tax (CAT), you could consider gifting up to £1,000 per annum to a savings plan set up in the name of a particular child. Under the Revenue Commissioner's Small Annual Gifts Exemption, every individual is allowed to receive an annual tax-free gift of up to £1,000.

It's also possible for children to receive CAT-free lump sums from family members in the form of an inheritance - up to £192,900 from their parents, £25,720 from grandparents or other close relatives and £12,860 from non-relatives. * Clinch Brokers can be contacted at 01 298 2298.