When it comes to third-level education costs, the message to parents from the experts is: start your planning early. "Forward planning is essential," says Andrew Clinch of independent financial brokers Clinch Brokers. If you have, say, three children and hope that they will all take four-year degree courses, you need to plan for 12 years of education.

"You have to factor in inflation," he notes, and decide how much income or capital you want to set aside to achieve your target. Clinch recommends "with profits" savings plans - which are generally offered by insurance companies. Parents or grandparents with substantial assets, which are likely to attract capital acquisitions tax (CAT), could consider gifting up to £500 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 £500.

Children too, may receive an early inheritance of up to £188,400 from their parents, £25,120 from grandparents or other close relatives and £12,500 from a non-relative, without incurring CAT.

Clinch Brokers can be contacted at (01) 298 2298.