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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To use inheritance to pay for private school?

214 replies

Pondformarch · 06/01/2023 17:16

We have a two year old and are due a second baby this summer. Our combined income is around £120,000, a bit more with a bonus.

My parents died when I was young and I inherited a flat. It is now worth around £125,000, not a fortune, but it would pay for private school fees.

I always had it in mind to send one child but finding out I was having a second made me think the fees would be too tight. Wondering if selling the flat might be most sensible. This is a fairly small school, not a big name one (obviously) fees for senior school are around £15,000 p/a. One of the main reasons I would prefer the private school (apart from local state choices not being brilliant) is the fact that wraparound care is really high quality and it would mean that we wouldn’t have to worry about pick ups and drop offs. Also, the school is right by my workplace, which helps.

But I also know it might be better to hang onto the flat long term. So interested in seeing what others think?

OP posts:
Snoopsnoggysnog · 06/01/2023 17:17

Do you currently earn rental income from the flat?

Soontobe60 · 06/01/2023 17:21

Wait until secondary school. You’ve got 10 years of rental income and inflation on the flat!

Original poster
Pondformarch · 06/01/2023 17:24

I do @Snoopsnoggysnog but it doesn’t actually generate a huge amount of rental income, isn’t local to where we live and is a bit of a hassle I could do without to be honest.

Primary schools here really aren’t great and I don’t want DC to start at state school and then move to private amongst established friendship groups. I’d also have to work PT to enable drop offs and pick ups, but over five days, which is a pain.

OP posts:
WeAreAllLionesses · 06/01/2023 17:28

Selling a property to fund school fees is madness.

Perthsmurf · 06/01/2023 17:29

Fees are just one cost. Uniform, trips, extracurricular stuff tends to be pricey too. And once your children are in, it’s difficult to pull them out.

Are you looking at just senior school or junior plus senior? I think it depends on how much you can pay from your own pocket from your earnings- £125k is not a lot for 2 children. Could paying for extra tuition where needed be an option instead?

I don’t regret sending my children to an independent school, we have very good reasons for our choice, but it has come at a cost in terms of our career choices.

Also, not all private schools are worth it!

PatriciaHolm · 06/01/2023 17:30

It would just about cover primary and a year or so of secondary for one - could you then cover secondary for both yourselves? 6 years of 2 kids at secondary?

LIZS · 06/01/2023 17:30

Fees may be 15k now but could have risen significantly in ten years. Annual increases are often 5%+. Plus extras like exam fees and music lessons.

lookluv · 06/01/2023 17:33

I have used my inheritance for private school fees - no regrets absolutely the right thing to do for my DCs. Happy thriving children who were on a fast track to nowhere in our local state primary.

Nest egg was not earning much in interest - invested in shares and bonds and have drawn down as needed, so monies have grown but been used.

i see it as a long term investment in their future lives - so best return possible

3WildOnes · 06/01/2023 17:33

I wouldn't be reluctant to sell the house now. It would make a good house deposit for both of your children in the future.
How much rental income does in generate?

Original poster
Pondformarch · 06/01/2023 17:34

So at the moment (obviously this will go up) we are looking at approx 10k a year at primary and 15 at secondary. For two children then, just short of £300,000, which is a lot of money.

However, we could afford to send one child fairly easily, it is when considering the costs involved with two that it’s more of a stretch. Essentially, it would mean I was working purely to pay school fees. I don’t have an issue with this but it does mean we rely on DH’s salary.

Selling a property to fund school fees is madness

Well, the alternative is to hang on to it and rent it out but that really isn’t hassle free.

OP posts:
BigotSpigot · 06/01/2023 17:34

Your children might very possibly prefer to be given the flat when they are older. I really wouldn't consider starting down the private route right now unless you could pay the fees with ease and had plenty of savings. You might be better using the money to move to somewhere with better state schools (with better pre and after school care). Or use a childminder?

pleaseandthankyou45 · 06/01/2023 17:34

It sounds important to you and investing in your children is the best investment you can make. I don't think it's crazy but also make sure you think of ways to say for yourself for retirement etc.

Original poster
Pondformarch · 06/01/2023 17:35

@3WildOnes - we do actually have another property (with a mortgage on it - it was mine before I met DH) which is let out. That’s one reason I don’t really want the hassle of two, to be honest.

OP posts:
3WildOnes · 06/01/2023 17:36

Pondformarch · 06/01/2023 17:35

@3WildOnes - we do actually have another property (with a mortgage on it - it was mine before I met DH) which is let out. That’s one reason I don’t really want the hassle of two, to be honest.

In that case I probably would. We have a similar income and pay for private school.

Lulu1919 · 06/01/2023 17:37

The money would only last four or five years for two children ish
I work in an independent prep ..it averages at £5000 a term ...slighter cheaper when younger then fees go up each year group

ScruffGin · 06/01/2023 17:38

I think it sounds like a good idea, the flat is a hassle, and you'd struggle to afford to send two, seems the ideal scenario, the money could GP into savings etc to try and grow it a bit. Also some schools do a discount if you can pay a few years upfront (it's worth asking!)

Original poster
Pondformarch · 06/01/2023 17:39

The problem with a childminder or any sort of wraparound care is the ad hoc and sporadic nature of what we’d need.

DH frequently works away, often at quite short notice and while it’s usually in the UK it isn’t always.

I teach, which definitely has its advantages in terms of childcare but obviously the downside is that it isn’t flexible at all! It’s nice to have an option where I know the children would be well looked after for a couple of hours and can be used on that ad hoc basis.

Moving is a possibility but we do actually really like our house and state schools generally seem to be struggling round here - I do think some of that is OFSTED being a bit selective in what they do see, though.

OP posts:
Surelyitscoffeetime · 06/01/2023 17:39

I worked in a private school until very recently and wouldn’t bother to send my DC to one unless I had serious cash to burn and could afford it without any change to my lifestyle. I would put them in a state school and see the flat as a property deposit for your DC.

parietal · 06/01/2023 17:40

you might have to talk to a financial advisor, but you could sell the property, put the money in a stock-market tracker to maximise income and then use the income to pay the fees. it probably won't be enough to pay all the fees, but then you can slowly draw-down from the capital to top up. And if you can also be economical with your salary, then you might be able to afford the school + have a small nest egg at the end too.

Spaghetti201 · 06/01/2023 17:41

Yoy would be better off using state school and paying a private tutor in the school holidays if they need extra help. Or paying for a tutor around exam times gcse/a-levels. Private education is just an excuse to have your kids mix socially with other rich kids.

NoSquirrels · 06/01/2023 17:41

What are the junior school fees? would you stay PT or go FT at work to help pay them?

When you say the rental is ‘not a lot’ what percentage of the yearly fees would it cover? Presumably there’s no mortgage or debt on it so it’s all profit.

What would the equivalent monetary hit to you be if you stayed state school paying wraparound childcare if you stay at your current PT working hours? (Not sure why you’d need to go 5 day PT?)

How much do you value your time with the DC vs the easy wraparound childcare? Because staying PT but wanting the wraparound childcare might be too much of a stretch, so you may need to work FT (to justify the fees and therefore the childcare).

Lots of people by us start at primary for EYFS and KS1 and then move at 8+, if it’s primarily the friendships thing that worries you. This would also be when your DC2 would be starting school so defers the decision a little?

HariKris · 06/01/2023 17:43

Selling a property to fund school fees is madness. <- Ignore this knee-jerk ill-informed post.

Look at it a different way. A hypothetical way. You receive a cheque through the post for £125,000. You have three options:

a) Buy the same small property (I bet the capital growth is limited at that level...!).
b) Buy a different property for £125,000 - after all, why should you be limited to just the property you inherited?
c) Invest the money in your kid's education.

I would invest in c). Sell the property and invest in global equity funds with a US slant of 70%. That is where the returns have been and more so now. Draw down each year on that fund from investment growth and income to fund school fees.

Remember: If you give someone a fish, you feed them for a day. If you teach someone to fish, you feed them for a lifetime.

The rent is daily fish. The house is an education and fish for a lifetime.

NoSquirrels · 06/01/2023 17:44

The problem with a childminder or any sort of wraparound care is the ad hoc and sporadic nature of what we’d need.

Once kids are school age the ratios for childminders are pretty generous, so if you used one for a regular 3 days after school, if you suddenly needed 5 days one week they’d probably be fine with that. I wouldn’t think that’s an issue particularly. Under school age it’s harder.

PotteringAlonggotkickedoutandhadtoreregister · 06/01/2023 17:44

You’re pregnant with number 2 at the minute?

the fees might be £15k pa now, but they won’t be £15k in 2041…

I would keep the flat.

HariKris · 06/01/2023 17:45

parietal · 06/01/2023 17:40

you might have to talk to a financial advisor, but you could sell the property, put the money in a stock-market tracker to maximise income and then use the income to pay the fees. it probably won't be enough to pay all the fees, but then you can slowly draw-down from the capital to top up. And if you can also be economical with your salary, then you might be able to afford the school + have a small nest egg at the end too.

Yep.

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