Sending your child to an independent school will involve making a significant level of financial sacrifice.

There may be difficult choices to make, especially if this has been something you’ve been thinking about since they were born.

It’s important therefore, to ensure that if you do want to send your child, or children, to private schools, that you have a plan to ensure you have sufficient funds in place.

This a going to be a decision that may significantly impact upon your standard of living for between 5-15 years, depending upon what schooling routes you elect to follow for each child.

Private school fees have always been an expensive consideration and as such, the earlier that plans are put in place for their payment, the better.

Every family’s financial situation is different and you’ll need to discuss your personal details with a financial advisor.

That being so, having worked through bursary and funding calculations with various parents we’ve collated some ideas for you and perhaps some may suit your circumstances or may be a good starting point for further discussions.

Expect termly fees to increase annually

The Independent Schools Council (ISC) regularly canvasses their member schools to assess the current levels of fees across the UK and for 2018 that revealed that fees for a public day school would be around £15,000 per year, rising to around £33,000 if a child were to attend a full boarding establishment.

Fees have risen above inflation each year and so families need to ensure they have mechanisms in place to ensure any funding provisions outperform that index too.

It would be awful to start your children off in a private school only to discover you’re unable to continue making payments in subsequent years.

Families therefore, need to make plans to fund outgoings at this level for at least 5 years, excluding any expenditure on pre-prep, junior or prep school fees in the years before that.

But that’s not all that will need to be accounted for.

Make a provision for ‘extras’

To those termly fees parents will also need to include an additional allowance for ‘extras’, which can add around ten percent to the amount you will need to cover.

What’s included as extras will vary by school and whether your child is a day pupil or boarder, but there will be something added on each term.

Extras could therefore include such additional costs such as:

• School trips, study related
• School trips, non-study related
• Repair or replacement of uniforms or sports kit
• School yearbooks
• Annual school photos
• Laundry bills
• Repair of broken school equipment (yes, parents, it does happen sometimes!)
• Extra-curricular clubs
• Uniform purchased via any official supplier
• Sports clothing in various school colours
• Exam fees
• Books and stationery
• Music lessons
• Additional classes to help with subjects
• In-school club subscriptions
• Membership of Combined Cadet Force (CCF), the Duke of Edinburgh Award Scheme, Cubs, Scouts or other external organisations

Whilst fees are charged in advance, extras are charged termly in arrears and so can sometimes be rather a shock when the first extras bill is received at the start of the second term of their first year at school.

Advance planning reduces financial stress

The long-term advantages of financial planning certainly shows when funding school fees. 

It’s going to be significantly easier to fund school fees out of accumulated capital, even if that is a combination of capital drawn down and interest paid out, rather than having to cover those fees out of additional net income.

With this in mind here are ten top tips that parents, (and grandparents) can use to smooth out the payment of independent school fees.

1. Cut back and save money elsewhere

Ask the majority of people about the financial status of parents who send their children to private school and most will say,

“They’re probably very well off, take lots of holidays, own at least two cars & have a holiday home somewhere very warm.”

The ‘average’ private school parent, according to ‘the public’

The reality for most independent school parents, however, is very different.

Whilst there are some very wealthy people who send their children to public schools, the majority of parents have to make sacrifices in various areas, often forgoing holidays, new cars and home improvements for the duration of their children’s schooling.

Whilst some of these suggestions might sound bland, or boring, reducing your expenses will give you more flexibility each month whilst you’re paying school fees.

Other parents have:

• Cut back or totally stopped eating out
• Cancelled Netflix, Sky, Virgin etc & just used YouTube, podcasts or the radio
• Kept their car longer rather than trade it in every few years
• Sold their car and joined a carpool for commuting
• Sold their car and purchased a bike

2. Raid the school’s second-hand shop for clothes and kit

Most independent schools have a second-hand clothing and kit shop where parents can deposit items that their children have either outgrown or simply never got around to using.

Whilst it might be nice to pop down to the school shop to buy all new items, children often outgrow their uniforms before they wear them out. 

That being so, a second hand item may have next to no wear and could be available for a fraction of the cost of a new one.

You might think nobody else would buy second-hand, but many parents do.

This is especially the case at boarding schools, where the house matrons often have a ready supply of spare skirts, trousers, blouses and shirts to replace those that are damaged or outgrown during termtime.

3. Start off private then switch at 11 or 13

If it’s going to be too great a stretch to cover school fees all the way through until 18, why not consider starting them off in a private prep or junior school and then transfer to a state maintained school or a grammar school at 11?

Many locations have state schools which have very good reputations and have a history of their senior students securing places at Russell Group universities.

Whilst senior private schools like to stress the exam results achieved by their pupils, those achievements are in no small part due to the highly effective and efficient learning procedures that their feeder prep schools have used.

It’s possible, therefore, for your child to benefit from a similar underpinning to their learning, which they can then build upon in a top state school or grammar school.

As you might expect, we’re strong advocates of using a structured coaching and tutoring approach to ensure children can achieve their potential at each stage in their education.

To this end private tuition could enable your child to ace their grammar school entrance exam with less costs for you thereafter.

Alternatively, some parents will home-educate one or more of their children until, say, 11 or 13 and then seek to place them in a state or private school.

Often home educated children will outperform those who have gone through a ‘standard’ primary education and can thrive in a private school or grammar school environment.

4. Remember: Not every sibling HAS to go to a private school

Whilst it’s natural for parents to feel that they need to treat all siblings identically, when it comes to schooling, however, it’s worth considering the bigger picture.

For example:

• Perhaps only one of your children might want to be a boarder & you don’t live near to the school they’d prefer
• Perhaps one child might be able to achieve a scholarship place at a particular school
• Perhaps one child might prefer a less academic route and a specific school fits them perfectly
• Perhaps one child would be quite ok with a single sex school but another would prefer co-ed

It’s important therefore to ‘run the numbers’ and consider sending a child to a private school and the others to a state school as it may work out better for everyone in the family.

This has worked quite successfully for many parents and there’s no reason for this approach to generate any resentment between siblings.

5. Set up a family business pay to children from investments

As always, advance planning is best for this arrangement. 

Funds permitting, grandparents can set up a family business and name the children as shareholders.

The children will then receive their dividends tax free, assuming they have no other earnings or an income that exceeds their personal allowance.

The dividends they receive can then be used to pay for a proportion of their school fees (always assuming they don’t spend it in advance of paying the bill!)

It’s important that only grandparent’s income-generating assets are placed into the business and not any of the parent’s else the Inland Revenue will consider the arrangement one where the parents are seeking to use their children’s tax allowance to minimise their own tax liability.

6. Start an Individual Savings Account (ISA)

Investments inside an Individual Savings Account (ISA) receive tax benefits, so they can be an efficient way of saving to fund school fees.

The majority of ISA providers allow monthly contributions so you can move your funds into this type of investment vehicle over a period if you don’t have a lump sum available that’s equal to the annual limit, which has been kept at the 2018/19 limit of £20,000 for 2019/20.

7. Set up an offshore investment bond

Parents could invest a lump sum into an offshore bond.

This would utilise the tax allowances of you and your children and would leave your ISA allowances free to be used for other investment planning.

Your child’s grandparents could invest a lump sum into an investment bond, then nominate themselves as trustees and your children as beneficiaries.

The bond is then split into a number of policy segments, usually 100.

Each individual policy segment would then be cashed-in to pay for the school fees each year or term.

Depending upon the growth of the investment the segments left un-cashed can be assigned to the child with any gains thereafter being taxed as the child’s rather than the grandparents.

8. Consider moving to be nearer to the school

Perhaps you could move to enable your child to be a day pupil rather than a boarder.

Allied to this, you might be able to rent out your current home and either purchase, or rent closer to the proposed school.

If parents are considering options between private independent schooling or top state maintained school then it’s important to know exactly which locations are inside, or outside of the boundaries of any school’s catchment area.

9. Pay the fees by credit card

By this we don’t mean leaving the balance owing on the card, but to use the credit card as a method of payment.

Providing your credit card offers a cash back rewards scheme you could pay your school fees monthly or in a lump sum.

Over the period of your child’s schooling this would allow you to accrue a significant cash back balance.

Just make sure you clear the balance within the interest free period.

10. Apply for a scholarship

Many parents have discovered that by arranging a tutor for their child that their child has been able to secure a scholarship place at their chosen school.

Take out an appropriate amount of life insurance

Whilst no parent wants to focus upon this, but every year parents do die much earlier than any actuarial tables would have suggested.

Perhaps it might be due to an accident, or as a result of health issues, but whatever the reason it is caring and forward-thinking parents that will arrange an insurance policy that, at the least, more than covers any remaining school fees for their children.

Along with term insurance, critical illness insurance cover should be considered too, especially since the financial impact of long-term health issues could eat into any funds available to cover your children’s school fees or affect any plans for them to attend university.

Finally – Remember why you’re doing this

If it all gets a bit too much, remember, you’re caring parents who want the best for their children.

Not everyone can afford a private education, but, with planning, and perhaps some tutoring, it’s certainly possible for many children to achieve a strong showing in any entrance exams.

If you’d like some help to work through some of the various options available to your family we’d be delighted to talk to you.

Here’s a link to our contact form – pop your details in there we’ll be in touch.