Saving for Private School Fees
Updated: Feb 15, 2022
Do you want to send your child to a private school? There are many reasons why parents choose private education for their children. The main reason is the academic standards set by the school. Before making that choice, though, it's important to know what kind of financial commitment is involved in sending your child to a private school. The cost ranges considerably from school to school. The best way to find out how much it will cost is to contact the administration offices at different schools in your area and ask them directly about what types of financial aid they offer. This information can also be found on their websites.
When should you start planning for private school fees?
You should start saving as soon as your child is born. For example, you could open an ISA and make regular contributions to it every month. It is also possible to keep any earnings after taking inflation into account thanks to ISA limits of £20,000 per person. Even setting aside £200 a month from birth results in a pot that may have grown to over £30,000 by the time your children are ready for secondary school. Increasing monthly savings to £500 might result in more than £75,000 being returned.
Remember, if you start saving early enough – at least five years before your child starts you'll be able to minimise the impact of inflation.
Can you use investments to pay for private school fees?
Yes! And unless you have a very high income, it is unlikely that you’ll have enough spare cash to pay for the fees unless you’ve made some investments.
Other ways to manage private school fees
Investing isn't the only way to obtain the cash you need to pay for school fees. You could borrow money, which many parents do remortgage to raise funds. Keep in mind that any money you take from a lender will have to be paid back, as well as interest.
Grandparents with significant assets that may be subject to inheritance tax might be open to transferring some of their wealth early. They might be prepared to invest a lump sum early in the life of their grandchild, which could cover the majority of school fees.
You should also think about taking out insurance. Life insurance, critical illness coverage, and income protection might all be used to pay for education expenses if something happens to you.
Financial advice with Schofield
Whatever strategy you choose, Schofield's financial planners can help you meet your savings and investment targets to give you peace of mind about your children’s future. Contact our Chartered Financial Planners on 01423 368 000 or email us at firstname.lastname@example.org.
The value of an investment with Schofield Money Ltd is directly tied to funds selected, as a result, the value can fall as well as rise, you may get back less than originally invested. Past performance is not a guide to future returns. This article is for information purposes only. It does not constitute any financial or investment advice. Please contact us if you wish to proceed with any course of action suggested in this article.