School fees: How should you plan for them?

It is estimated that to put a child through private school from reception to sixth form costs more than £200,000 in school fees.

You also need to budget for the extras like uniforms, school trips and music lessons.

Over the last ten years, private education fees have risen well above inflation with no indication that this will change in the future.

So what options do you have to make them manageable?

Paying for school fees is never going to be cheap but these options are worth considering.

Plan as far ahead as you can.

An advantage is that you generally know when the first set of fees are due. From a financial planning perspective, it makes it easier to have a date to work to. Working with you a financial planner will be able to estimate the costs adding in annual increases.

Some schools will offer discounts if you pay several years of fees in advance. Discounts are often given if a further child from the same family also attends. It is worth noting that sometimes additional charges are made if the fees are paid monthly.

Gifts from family.

Family such as grandparents will often help with school fees. By giving some of their money away they can reduce an inheritance tax bill.  For the gift to fall outside the estate the giver must live for seven years after making the gift.

Grandparents can also make gifts up to £3,000 each tax year free from inheritance tax and this allowance can be carried forward a year. This allowance is known as your annual exemption.

Releasing cash from your property.

As a parent releasing cash from your property could be an option. Remortgaging also has an advantage if the school offers a discount for paying fees in advance. Work with an independent mortgage broker, as some lenders might consider the school fee costs when assessing affordability. However, not all lenders will take the same view.

Investments and savings.

If you have been prudent you may already have savings in place. With a savings account offering interest rates of around half a per cent, you may want to look at investing some.

When investing your capital is at risk but over the longer term (5 years plus) returns historically can be better. Take advice from an independent financial planner who will be able to recommend all the investment options available to you.

Remember always to make use of any ISA allowances that are available to you to reduce your tax bill.

How Anstee & Co can help with school fees planning.

We are a firm of Independent Financial Advisers (IFA’s). This means that the financial advice we provide is unbiased. Being independent means that we look at all the financial solutions available to you. Our experience covers all aspects of financial planning including, Investments, Pensions, Estate Planning and Mortgages. To find out if we can help you why not contact us today. The first “getting to know you” meeting is at our cost and is without obligation.

We have offices located at-

• Kettering, Northamptonshire
• London, Greater London
• Stamford, Lincolnshire
• Towcester, Northamptonshire

Our financial planners also live in-

• Northampton, Northamptonshire
• Bedford, Bedfordshire
• Wellingborough, Northamptonshire.
• Market Harborough, Leicestershire

We are following government guidelines regarding COVID-19 (coronavirus). We make full use of video conferencing facilities such as-

• Zoom
• Mircosoft Teams
• Skype
• Facetime

Also, we can arrange a conference telephone call. The choice is yours. There is no need to visit an office as all work can be handled remotely. Why not contact us today to see how we can help you with school fees planning.

If you have any thoughts or comments on this article, “School fees: How should you plan for them?”, then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).