to want to pay off the mortgage instead?

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I would decide whether to save and collect the interest, or pay down some of the mortgage, and have a weekly tutor for your child so that through (state) primary she is able to be easily achieving her targets. It's the stuff you learn in primary that sticks with you for a lifetime (eg times tables, calculating fractions, being able to read well). You can then decide nearer the time for secondary which school/ type of school will suit best. I imagine there will be a shake up of private school provision between now and when you need to apply.

@GreenLightgerkin

Private school doesn't mean a better education , or better teachers. It just means that you pay for it.

Thank you. I know private schools are a contentious topic on MN, but if my parents offered me 100K with a strong expectation that it went on school fees, I'd turn it down and would give chapter and verse on why. It really annoys me when people assume that the reason you haven't made the same decisions that they have (private schools, cars, houses, type of holiday, cruises, etc) is that you can't afford them. Most of my family are like that, and it is galling that their failure to 'get' what or who I and my husband want for our family has led to a certain chill over our relationships.

I completely understand your position and in your circumstances would don't be same - but I guess they're trying to recreate a part of your childhood they were happy with for your dc? And that's perhaps why they're sad. Saying they're sad isn't being super controlling, they just had one idea in their heads and you had another more sensible for you one.

I'd steer a middle course with them and say given VAT, it makes sense to pay mortgage down now, state primary and you'll evaluate private school for 11-16 or something like that as secondary is a way off for you yet.

This. And it’s worth noting that interest in a savings account also compounds so it may be preferable to keep money in savings than pay down the mortgage depending on the comparative rates etc.

I'd definitely pay off the mortgage, unless you fear your relationship with your parents would be irreparably damaged if you do that?

My 2 DCs went to a "bad" school for academics but a great one in that they both loved the school and the teachers were all lovely and did the best they could, while understaffed and underfunded.

Both got full academic scholarships that have covered all their university tuition fees, despite each having to opt to take online classes for the most difficult subjects in their final years at high school. We're not in the UK, but think along the lines of A level Maths and Physics. This was because the classes they wanted to take either weren't offered in their school or were being taught by an unqualified teacher (well, a fully qualified teacher, but one without advanced level knowledge of that particular subject.)

It's their love of learning that enabled them to do so well, whereas I'm of equivalent intellect to them both, but hated my high-pressure, highly academic school, and didn't reach my full potential because my anxiety was through the roof and I was too scared to ask teachers for help if I didn't understand a concept first time.

If sounds like they should have specified.

Surely your parents said something about what they wished the money to be used for at the time of gifting? I don't believe that they gave you the money without saying something aboout their intentions. I haven't RTWT but is 'their" money protected in case of divorce if used to pay off the mortgage?

I'd be using it to pay down your mortgage. I'd feel no guilt with this, especially being a single parent.

You can pay for a private education but it does not guarantee the standard of life or career your child will end up in. I know people who have been to private school and they are all in low paid, not particularly great jobs. I know people who went to mediocre state schools and are high earners, like seriously high, talking earning well in excess of £250K/yr. My husband and I, both state educated, both have done well career wise.

By all means, pay your mortgage down, then if you happen to be able to afford private school as well with your income, do so, but I'd absolutely take financial security of your own home over private education.

Pay off the mortgage, boost your pension, send your child to the best state school you can and throw money at tuition, side activities and travel. Build a good secure base and a rich life together with your daughter. £100k won't really touch the sides of private education (About £17k - £20k per year for non London day schools, plus extras, which you'll need to buy so she can pitch in with her friends). And I sent mine to private school until sixth form, when state school supplemented by tuition did the job.

It's a weird thing for your DP's to disapprove of Op, your DC's not even close to going to secondary school yet so why give you the money now. Life changes, things happen that will make a plan for 5 or 6 years time a nonsense, you could have to stop working, you could have another DC, you could move away somewhere 40 miles from your nearest private school. It's an awful lot of money Op but I'd feel uncomfortable in your place, it feels a bit like bribing you to do as they want you to, it's your DC, not theirs

Mortgage is much more sensible. Loads of people I was in private school with have low paid jobs, I think many of the parents got a lowsy return. Also bullying was rife. Your gut instinct on having financial security is in my view the right one.

@onnwt - you need to check the rules about overpaying your mortgage, if you haven't already. Some mortgages only allow a certain %age can be overpaid in any year, so do double check what the rules are for your mortgage.

I'm blown away by the people saying you should spend it on school fees. I've taught in private schools for over 20 years and would def pay the mortgage not the fees (never ever never for Primary certainly, possibly secondary if DC was struggling in some way).

The only naïve people on this thread are the people who think paying for education automatically makes it 'better'. It just isn't the case. You'd need to look closely at any school you pick, state or private.

Just because you paid off half of the mortgage does not mean the money disappears. You can remortgage later on if you need to draw on it for private school fees or as another poster suggested put it into a offset mortgage which makes later withdrawal even easier.

Maybe you can explain that to your parents. It is not all or nothing.

And my DD had a hideous time at her state school, as it had bloody awful behaviour & academic standards, and benefitted hugely from moving to a private school.

Which shows us that anecdotal evidence is largely useless in this situation.

OP - it will depend on the schools in your area and what your DC are like at secondary age. Which you can’t possibly know yet. I would speak to a financial adviser about investing it, and then at least you’ll have the private option in the future.

Our secondary school fees are £18K a term. I appreciate the VAT increase + yearly increases will change this, but £100K will still cover the bulk of it.

What interest rate is your mortgage on? I would pay off the mortgage. She isn't going to secondary school for like 7 years!

You need to do some maths. Is interest rate on savings higher than mortgage? What about if take into account over a certain interest you pay tax on it? Pay off mortgage when advantageous to. Set up highest interest regular savers you can. Pay down your mortgage as much as possible as quick as possible. With the overpayments you could have paid off or really reduced mortgage to sub £50K by the time she's near secondary.

Then remortgage if you need to when she's starting secondary for a longer term if your wages can cover it then.

Wouldn’t you be wise to present the facts around mortgage interest vs saved interest to get them to see the impact on your overall position in paying it off?

Also are you sure you can overpay such a lump in one go?

Both parties should have made expectations clearer. Your parents have given you a large sum of money which they wished to be put towards your child's school fees. YABU. You should have made it clear you wouldn't not be doing this. It's really cheeky to use it to pay off your mortgage.

It's not enough for secondary school by any stretch.

You pay off the mortgage, save massively on interest and start saving up for private school and see where you are at in 5 years time then make a decision.

They are unreasonable to place the guilt burden on you.

Why not tell them that you will be planning to spend it on school fees, but the best way to do that is to use it initially to pay off a big chunk of mortgage and save a lot of interest that you'd otherwise owe?

Even if you were 100% set on private education already, it wouldn't make sense to put it into a savings account for that while your mortgage interest is piling up year on year. You could also explain about how with only one earner you need to prioritise your home first but I'm not sure you need to - even without that it still makes sense to get rid of some of the mortgage now rather than save the 100k in somewhere else just for school fees. Either way I'd point out how you absolutely will be using their money to enable you to spend money on your daughter's education, it's just that you'll do it by paying off the mortgage thus freeing up more money each month - I wouldn't talk to them so much about reducing the term, more about the benefits of reducing the overall amount you'll have to repay.

Whether when your dd gets to 11 or 13 you still want to spend it on school fees will be another matter, and perhaps when she gets to that point you'll need to have another argument with them if they think she should have a private education and you don't. Worst-case unlikely scenario at that point is that you re-borrow the money and pay them back (with six years of interest on 100k saved) but realistically I suspect they'll be more than happy just to see you spending a serious amount of money on extra-curriculars, tutors, experiences and so on, and saving for good university support, if there isn't a private school nearby that's affordable and a good fit for her.

As a single parent in think security has to be your biggest priority. I wouldn’t entertain private school fees all the way through unless you were absolutely certain you could maintain it. Given what you’ve said about schools, I wouldn’t do it for primary but would run and numbers for secondary.

But, 100k probably wont touch the sides for secondary . Schools near me that were £20k a few years ago are going to be closer to £30k next year once vat is added. That is an absolutely massive increase. We’re in a massive dilemma as the local comp is crap but the privates are among the best in the country. A few years ago fees felt in reach, now were not so sure.

Trouble with private school is the mixing with other children from wealthy families and how that will play out for her if she can't afford to fit in socially ( the clothes, concerts, holidays etc). Your house may be deemed naff. Your daughter may be happier with life at the local secondary school.

Put 20k in an S&S ISA and the rest in a GIA (also S&S) then move another £20k to the ISA next year, etc.

In 5 years' time the £100k might well be £200k - far, far above the gain from paying off the mortgage.

You'll still have the money there if you're wanting the security of something behind you, you won't have spent the money you were gifted and you still have the option to pay for private schooling.