To use inheritance to pay for private school?

[Pondformarch]

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?

Not sure about your reasoning here. School fees go up every year, and you have to pay extra for the wraparound care (at least you did in the three private schools I have experience with). And your figures are incorrect. If fees remained static, and your children started in reception, then 7 x 10k is 70,000, times two is £140k. Then 7 years senior school at £15k is £210k. That's £350k. But of course fees go up so it will be over £400k. Plus extras.
If you knock off £125 from that, it still leaves £275k. Can you afford that?
Maybe move to where state schools are better - sell the property in order to afford the move?

I wound start them at secondary in private. Not waste money in primary years.

We sent our children private at secondary age as the schools are poor at that age around here. It really isn’t worth it any earlier if you have a decent junior school. Friendship groups change at secondary anyway, so that isn’t an issue. Save your money until later and save a bit to put towards fees now.

Hi OP, so you can afford to send one and need to sell the property to send the other? Then sell the property. Put the money in a reasonable savings account and draw the money down as needed.

If I had my time again I'd send my kids to independent schools.

Lateral thinking: move to a place with good state schools.

@NoSquirrels - What I mean is that if we went down the state route, we would need wraparound care in the morning, which would rule out one of three state possibilities. For the other two, it would mean quite a lot of juggling and early starts.

I could avoid this by doing drop off and pick ups myself but that would mean condensing my hours so I start late and finish early but of course that means I have the disadvantages of being part time without the actual advantage of a day off!

I would far sooner drop them off more or less as school is starting then pick up 30-60 minutes after the end of school knowing they’ve been in a calm and safe environment (some of the reports about after school provision really doesn’t sound brilliant) and it can be flexible as well so we don’t need it one week because of DH work - not a problem - but we do need it the next week.

If it's just about the money.
I'd surrender a £150k flat in exchange for private schooling tomorrow, but mine are already at fantastic private schools so I know it's worth it.
If your local state school is good and ticking all the boxes then there's a lot to be said for annual skiing trips and holidays in Cornwall.

I’m not counting sixth form @mondaytosunday - my maths isn’t that bad! I do think by age 16 having been in the same environment since 4/5 it would do both a lot of good to spread their wings a bit before university.

I work at a purportedly ‘good’ school: it isn’t. We could move to somewhere with outstanding OFSTED reports but if it’s still huge and impersonal and the classes are too big and it struggles to recruit and behaviour is not always great, it doesn’t matter what OFSTED say.

I was going to say I did the same, but actually I paid our mortgage and then used the rest to help with private schooling till our income made it less tight.

im not sure to be honest I’d do what you are suggesting,

On the second property with the mortgage… what is the long term plan with that one? Do you have any equity in it? It. May be worth considering continuing to pay that mortgage, gain some additional equity, then selling.

the advantage would be any profit after the sale + eliminating all the costs associated with it. You’ve got some time before #2 and if you already have a plan to pay the fees from your salary, the property sale could be a contingency.

I mean, if I sell the flat, assuming I don’t want to let it long term (I don’t!) then ultimately the money could be sat on for many years but I do feel it would be a ‘worthy’ spend of it if you like.

Plus, I don’t think the children will go without. There is the other rental property, as well as the fact I should get a reasonably good payout when I do retire. It won’t be a fortune of course but a decent lump sum for house deposits.

I’d do it. You already have another property to fall back on, you have a great income and you have a few years to save a bit more to have an even bigger buffer. Can you try to get a job at the private school as they often offer staff discounts?

I agree the wraparound situation sounds like a nightmare, and you will be unlikely to find someone who is willing to do exactly the hours you want.

We have had to pay double childcare (full-time after-school club, plus an after-school nanny) whilst the kids are in different schools, and we actually use less than half the hours that we pay for, with each of them, iyswim. Plus paying for emergency childcare when the nanny is sick or quits (they have not stayed long as they wanted full time positions).

If you have done the sums, I would go private and start saving now. Could you also sell property 3 as a fall-back option if either if you had to be out of work for a while?

By the way the fees add up to £350k to me if I’m reading right (14 x 10k + 14 x 15k).

@saltinesandcoffeecups we recently remortgaged it (it was owned outright beforehand) to move to where we are now (the house is great, just the schools are not what I’d ideally want.)

There is a fair amount of equity in it, but there is a long term tenant and I think she may struggle to rent somewhere else which was a consideration in remortgaging rather than selling.

@JulieMarooley i am counting seven years at primary and five at secondary not seven, I think that’s where the discrepancy has come from. I would strongly encourage spreading wings at sixth form before university.

I think whether you sell it now is a different issue to whether you use th le funds for school

im a big believer in property as a hedge against inflation so have the majority of my money in property. Managing it is an absolute pain the arse - but rents are keeping pegged to inflation and house prices will over time keep pace

but others may be more comfortable with shares

I think you’re getting lots of different issues mixed up.

it sounds like you are almost definite re private school - although there’s a question around at primary level

it sounds like you want to get rid of the flat becaue you’re sick of managing it - in which case do the sums and look at where you could invest it. Or you might discover it’s bette to hang on to it until you need to pay fees

Out of curiosity, why wouldn’t you consider teaching at the private school? It sounds like you value private education, so you’re not opposed on principle to it as you’ll send your children. And it would (potentially) solve a lot of both financial issues and logistic issues, as your salary really would be the one supporting the private education if it also came with a discount for school fees.

Logistics on childcare are always stressful, I hear you on that. Fwiw I found it a bit simpler when I had both mine at a childminder - one drop off, one pick up, CM had toddler in day and she did all the school runs on those days. Much easier than when we were trying to do nursery/preschool plus school.

Off topic - how do you get a lump sum for retirement? Do you mean instead of a pension? Aren’t there tax implications for this?

Private education has lots of downsides, one of the main ones is that most Universities now offer contextualised offers. In addition they will expect A*s from candidates who attend private schools.
Better to find a goodish state school and employ private tutors with the extra money you have available.

But yes, sell the flat if you’re sick of managing it. Tenants and property management is also a ball ache of similar proportions to childcare whilst working, ime!

No it's because you said primary. 'I definitely want academic success, if only to make life easier'
That's why I wondered about SEN.

I will hang onto it until I need to pay fees, @Edinburghmusing - just I’m always conscious that we are a long way away if something goes wrong and so on.

At present when you retire from teaching you get a final salary payout.

@NoSquirrels this is my personal view and not intended to make those who made different choices feel bad, but I think teaching at the school your child attends is one of the worst things you can do. I firmly believe you both have the right to a bit of personal space, especially for teens.

Assuming you can pay for their school fees by selling the property even if the numbers don't add up to me £350k at least for both minus the £125k still means you need to cover a lot how would that impact your quality of life? It's not worth scrimping and saving every penny just to send them private. If your lifestyles have to change quite drastically to accommodate things like trips, music/sports/activities. In your position I'd keep the flat because I'm not very fond of private schools but if that's the best thing for your dc then I can understand why - hard work rarely pays off, it's better if your mate from school is a politician with connections if you want to get ahead, get an interview etc.

But then @America12 went on to add quite a big ‘but.’

I want academic success as much as any parent, as in you’d be hard pushed to find a parent who wants their child to fail. But more importantly I want their memories from school to be positive, to be filled with friends and pleasant experiences, to feel part of a community, valued by teachers and respected for who they are, SEN or not.

Why?

School fees are an investment in your kids’ future. The OP has a home and an income.

OP there are companies that advise on how to invest for school fees, so I’d talk to them about whether to keep the flat till you need to decide or sell now and invest another way.