Do you worry about paying school fees in future?(73 Posts)
We are trying to decide whether to send our DS (and his siblings in the future). If we are careful we can afford to send him now, but it gets more difficult for the others. I have planned our finances for the next several years and it looks like we should be ok, but can't be 100% certain.
How certain were you that you could pay fees in, say, 5 years time? I am willing to take the small risk that it could go wrong and we would have to move them, but DH being very pessimistic and is convinced something will go wrong. I don't want to be 5 years down the line though and realise we could have afforded it. I know that things will be tight - but that's the case for most people paying school fees I assume. DH seems to think we need loads of money in the bank to be able to afford it if things go wrong.
I want to go for it but am I being too risky?
Absolutely- but that's not what mumtogremlins said!
Signora - why is it so hard to understand?
Our primary school wasn't particularly academic. In year 4 we talked to the class teacher about DS being academically bored. We got a speech about how children should be children and there was plenty of time for serious studying later on in life. The year 5 teacher was more helpful. He would set separate work for DS. The year 6 teacher was totally unsympathetic. DS was already at KS L4 so what was I complaining about?
While we could compensate for this at primary level there was no way we could do this at secondary level. We looked around and our local state secondary options were more of the same. We could have moved but unless we bought a house literally meters from the school gate there was no guarantee that the proximity and siblings rule wouldn't trip us up. So we sat down, did the calculations and decided to go private.
Parents usually reach their decisions after a careful assessment of the options so at the people who seem to think that we decided to spend £250k for no other reason than because we are gullible snobs.
I picked a career where incomes at least double if not end up 10 times what you start on. That tends to help. Make sure daughters pick high paid careers when their time comes..... and if they go to a fee paying school that more likely. I was able to pay for school fees for 5 children due to wise career choices.
I think though the thread is more about a husband and wife having different approaches to risk. Whatever your views try to spread it - have as many different income sources as possible. Never put all your eggs into one basket, particularly a male earnings only basket as therein lies the road to ruin.
The other local schools are either in special measures or very similar to his current school. I don't want to move him unless there's a very good chance of it being an improvement
It isn't an easy decision and one we are not taking lightly, hence the post! I'm torn between the financial risk and wanting to send them to a school which will be so much better
Is anything happening about improving your school? If it got a poor OfSTEd there should be an improvement plan in place...if not, do you feel you have the time and energy to ask why not? (I appreciate you might well not!)
Well OP, DH being DH insisted that we put money aside when we began our DC at private school just in case.
He said it helped him sleep at night.
And to be fair, he's self employed (as am I, I wasn't when we started out) so there are never any income guarantees.
Taking on a large financial commitment can make some poeple very nervous indeed. If your DH is one of those people, then it's perhaps unfair to insist he face the burden?
That said, I know oodles of folk who pay school fees out of income. Yes, they are taking a leap of faith that their income will remain steady, but I guess that's the case with any commitment (morgage, pension, whatever)...they don't seem overly worried.
Private schools aren't generally profit-making businesses so the amount of tax saved by by having charitable status is quite a bit less than the amount of benefit provided in terms of bursaries and so on.
And surely it is conceivable that the differences between State and private schools are not constant at each age? That is, an argument that there is little difference between State and private in the early years but the difference is greater in later years. Thus, State schools "will do" up to a certain point.
It's good to know that it's not uncommon for fees to be paid out of income. I reckon we could save 2-3 terms of fees as a back up but it's still scary the amount of money we would be paying for all 4.
Seeker - his current school isn't in special measures so no big plan to improve. The head is useless when spoken to and is like a politician - all show and talk, and no action. He says he's making changes but I've not seen anything positive yet. He is obsessed with SATs results and the children that have already achieved level 4 & 5 get forgotten about. I don't want DS to get bored and lose his love of learning
It isn't remotely unusual. If you think about it, most people meet all their financial responsibilities through income.
It's very rare for someone to put ten years of mortgage payments in a designated account just in case .
I wouldn't do it unless you are very, very certain you can afford it comfortably and can go on doing so. Or that you have generous grandparents with deep pockets.
Ten years ago dh was earning a six figure + salary. Suddenly his company went bust and so did our investment in it. Thank goodness we had not committed to private education - at the time I had been considering it.
And schools will not just stump up for anyone who can't afford it who is already attending. That is a myth. And I spotted in the prospectus of one school that they will not help those who are funded by a grandparent if the grandparent dies. I guess people could have foreseen that funds might dry up!
Could you move to an area with good secondary schools and support the children through primary using the money that you would have otherwise spent on private education?
The quality of primary education is important but it is probably easier to make up any shortfalls at primary than it is at secondary so I would be tempted to focus on getting into the catchement of the best secondary you can.
lainiekazan - I think that's a large part of the reason for my "wobble" about private education at the moment. We are funding it out of income - paying present pre-prep fees and putting money aside for the higher fees in later years. I do currently earn a six-figure salary but it's at best a static industry- there don't seem to be many pay rises in the future, yet school fees keep going up and up. What's affordable now might start to get very painful in future years, particularly if I lost my current job and had to take a lower-paying one. If I take my kids out of private school, I'd rather do it at an early age and proactively rather than have to react to a change in circumstances - at least I have time to get my kids in to my preferred local State school rather than having to take the spare places in the unpopular school.
And I agree with your other point - I'm pretty sure the private schools are very unlikely to stump up the fees you can no longer pay. There might by coincidence be a bursary available, but you would probably have to put together a very strong argument for why your children deserved it.
So, the revised plan is looking like getting State primary education for "free" but putting money aside so we will hopefully have some flexibility for senior school if "needed".
I've always assumed my income will always get bigger and bigger. We can probably divide people into pessimists and optimists. Optimists studies show make their own luck and do better because we take up opportunities. Pessimists are so sure things will go wrong they let all kinds of possibilities go by as they say - oh I'd never manage that. It would all go wrong.
"Private schools aren't generally profit-making businesses so the amount of tax saved by by having charitable status is quite a bit less than the amount of benefit provided in terms of bursaries and so on."
I'd need to see the figures on that one!
I only know one family doesn't pay school fees out of income. And they are rich beyond the dreams of avarice. ( always wanted to say that!)
In the case of the OP though, and my own, you cannot say it equates to taking out a mortgage - as with 4 children, just for secondary you would be looking at 500k. I don't know many people who would take on such a huge mortgage unless they were very wealthy indeed..!!
seeker We pay our fees out of a small inheritance and a share-save scheme my husband's employer operate, not day to day income.
We are among the least well off parents at the school in terms of house size, fancy cars, holidays etc
Musicalfamily - I guess you don't live in the south east then... (looks on rightmove and has kittens at how much a 3 bed semi in not the posh part of town costs round here)
A while back I remember a thread about a family whose income was 250k plus but because they had 4 DC at private school the OP didn't feel it was giving her the lifestyle she thought it would. That made really interesting reading.
Fluffy I remember that one. They were struggling to afford holidays IIRC, although they did also have a vast mortgage.
seeker - From a Telegraph article
"Charitable status is thought to bring private schools tax benefits worth more than £100m a year. But private schools say they spend at least £260m on bursaries."
Charitable status of private schools is a bit of a red herring - probably works out at about £150 per pupil per year (compared with say £5k pa saved from not educating them in a State school). If private schools stopped being charities (assuming that was possible to unwind) it is quite reasonable to speculate that private schools would reduce the number of bursaries leading to more children being educated in the State sector thus more than offsetting the saving from removing charitable status.
At my kids' school, it seems that a lot of the pupils' fees are paid for/subsidised by inheritances or by grandparents. In some cases we know this is the case and, in a good number of others, there is no way that their jobs would even cover the fees by themselves before any living costs are considered.
If there were no charitable status parents would pay 20% VAT on the fees but would not be supporting poor children attending the schools nor having the cost of allowing others into the grounds and sports centres so fees may not be affected.
In my view charity ought to include any form of education including educating children of parents who can pay fees. Apart from anything else private schools hugely relieve the state from the cost of educating the children there - a huge gift fee paying children give to the poor and needy in this country for which of course we receive so little thanks as we are nation riven by jealousy and envy.
That's my understanding of the key impact as well - fees would attract 20% VAT. However, the school would also be able to reclaim VAT on its costs which has a large offsetting effect - i.e. its (net of VAT) costs would decrease so it wouldn't be as simple as taking current fees and adding 20%.
My £150 per pupil estimate was simply taking the £100m pa total figure and diving by the about 650,000 children educated in the private sector.
I think that, pre the 2006 Charities Act, education was seen as a charitable activity in its own right. Now there are more hurdles to jump through and certainly some private schools have been challenged on whether they have been doing enough to keep charitable status.
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