It is estimated that to put a child through private school from reception to sixth form costs more than £200,000.
You also need to budget for the extras like uniforms, school trips and music lesson.
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 point of view, this makes it easier having 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 up front. Discounts are often given if a further child from the same family also attends. 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.
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 lender might take into account the school fee cost when assessing affordability. Not all lender take the same view.
Investments and savings.
If you have been prudent you may already have savings in place. With savings account offering interest rates of around 1% 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 independent financial planners. The advice we provide is unbiased. Being independent means that we look at all the financial solutions available to you.
The first fact-finding meeting is free of charge and without obligation. We have offices located at-
- Kettering, Northamptonshire
- Birmingham, West Midlands
- London, Greater London
- Stamford, Lincolnshire
Our financial planner also live and make use of meeting rooms in-
- Droitwich, Worcestershire
- Northampton, Northamptonshire
- Bedford, Bedfordshire
- Wellingborough, Northamptonshire.
Meetings can also be arranged at your home or place of work.
Why not contact us today to see how we can help you with school fees planning.