AVERAGE PRIVATE SCHOOL FEES RISE ABOVE £17,000 – HOW TO SAVE FOR YOUR CHILD

According to the annual census of leading independent schools, the average private school fee is now over £17,0001 a year. Despite the rising cost of fees, private education continues to remain popular, with the number of pupils reaching 529,000, the highest figure since the Independent Schools Council began collecting data in 1974.

IT PAYS TO PLAN EARLY

After buying a home, private school fees could be a family’s largest expense, especially if you have several children to put through school and college. Starting to save from the day your children are born and encouraging other family members to contribute to accounts like Junior ISAs, can all help in building up the amount needed in fees.

If you have more than ten years to go before schooling starts, then it’s worth considering stock market investments. Whilst your money will be exposed to risk, it also has the potential, although not the guarantee, to outstrip the returns you would get in an average savings account.

Parents can make use of their annual ISA allowance (£20,000 for 2018–19). Money invested in an ISA grows in a tax-free fund and can be withdrawn to meet fees without incurring tax.

Increasingly, grandparents are looking at passing money on to their grandchildren during their lifetime as a way of reducing the value of their estate for inheritance tax purposes, either by giving a lump sum or setting up a trust for the benefit of the child.

LOANS, REMORTGAGES AND PENSION LUMP SUMS

Using offset mortgages or remortgaging their property are also common ways of raising the cash for fees. In some instances, older parents are taking their 25% tax-free pension lump sum and using the money to educate their offspring, although care needs to be taken to ensure the parents leave themselves enough money for their retirement.

If you’re considering paying for your child’s education, taking professional advice can help you plan effectively for the years that lie ahead.

1Independent Schools Council, 2018

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

Clifford Osborne are Independent Financial Advisors (IFA) based in Eastbourne, East Sussex, offering early retirement advice, pension advice, mortgage advice and more. Our clients often come from Uckfield, Lewes, Brighton, Tunbridge Wells, Hastings, Bexhill, Newhaven, Seaford, Crowborough and further afield.

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The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

It is important to take professional advice before making any decision relating to your personal finances. Information within this blog is based on our current understanding of taxation and can be subject to change in future.

It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

The information contained within the blog is for information purposes only and does not constitute financial advice.

The purpose of the blog is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.