Paying for education

01 February 2024

Will Stevens, Head of Financial Planning at Killik & Co, an independently owned wealth management Partnership, discusses how the firm is helping parents to navigate the challenge of funding increasing private school education fees.

How big is the school fees challenge?

As an illustration, published annual day school fees for Manchester Grammar School are just over
£15,000 whereas at St Paul’s School in London, the number is more like £30,000. That rises to almost
£45,000 for boarding. What’s more, fees at all schools tend to rise faster than the general rate of
inflation. Then there is the issue of what may happen under a future government should a 20% VAT uplift come into force after the next election.

Can families reduce the number of years they pay for?

Yes, however, some of the options that follow are quite emotive. In some families, there is an ongoing debate about whether every child should go to private school. Parents may, for example, prioritise a child whom they feel will benefit from smaller class sizes and more one-on-one attention. Then there is the decision about the entry point. In areas where there is a decent non-private primary or secondary school, parents may try to get their
children into them, with a view to switching later, to save on fees in the early years. Separately, there is the choice between boarding and day schools.

What about funding?

There are a number of financial options to explore.
Certain children may qualify for a bursary and enjoy a reduction in fees of anywhere between 10-100%.
For other parents fortunate enough to have sufficient capital, there are benefits in paying fees up front.
The majority we meet, however, pay as they go along.

William Stevens

Partner, Head of Financial Planning

Where there is still a shortfall, they may need to weigh up some tough trade-offs such as:

Deferring the date at which they stop work
Changing saving priorities away from, say, funding a first home for each child
Advancing money that would have been inherited later from grandparents
Cashing in investments early
Deferring paying down a mortgage, or even extending it
Using the tax-free cash from a private pension.

Paying for education – 2024

How do we add value?

Private school fees are a big expense, so we are often contacted by people who already have children
going through the system or who will do in the near future and want to better understand their options.
We can also help in other areas, should one, or both, earners fall ill or lose a job and we can also help with contentious family conversations about inheritances and the scope for releasing capital early. Finally,
there are various tax-efficient routes open to clients who plan ahead – the earlier these are considered,
the better.

Capital at risk. Tax treatment depends on individual circumstances and may change in future rate school education fees.