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?

We don't know what's round the corner Pondformarch; esp' if that's the only nest-egg or capitol you have, I'd think very carefully about this. I had one DC in state ed and one in grammar. The comp was as very good and my DS ended up at Bristol Uni, where his privately educated mate also got in with the same results. Both my DC's did well academically, but DD hated the hot-housing at her grammar. In hindsight, wish she'd gone to the local mixed comp, she'd have had a much nicer time and done just as well. Pondfor', consider all aspects of your DC's schooling. Paid for is not better necessarily. You may need this money down the line. Seeing an IFA is important here. This flat earns you income - do tutoring with that instead perhaps? I put all my inheritance into our marriage. Then out of the blue OH ended the marriage, taking hidden assets with him but he got 50% of everything I had to give. Wish I'd kept some back in a nice off shore acc somewhere!

Not read the full thread, bit

Have you factored in CGT on the sale of the flat? And other fees, solicitors, estate agents etc

Would you still be able to afford fees if VAT was added? This is increasingly likely to happen with a change in government.

We have the property we live in and we have another property plus the flat.

It is very true we don’t know what’s around the corner but we both have very generous death in service benefits, life insurance and so on.

Selling the flat is a contingency ‘not around the corner’ plan - should DH leave me it would ensure I could still pay for the fees in worst case scenario

I think you need to actually contact local schools and find out what their provision is. I have one in state, one in private and the before/after school provision in the state is actually better and with longer hours. The before school club needs to be booked the evening before and the after school club (until 6.30pm) can be booked on the day before 12pm. Then you have the much longer school terms too.

VAT is a concern but it’s one of those I’ll believe it when I see it, to be honest. The next election is for end of 2024 at present and DC1 doesn’t start school until 2025, so will have to see how likely it looks at that point.

I have looked on the websites @BigotSpigot . There are only realistically two schools DC could attend. I’m not keen on either to be honest but the wraparound care on offer has to be block booked.

I'd definitely do it. What better investment than in your DCs future?

A mortgage of £1200 is quite low on your combined salaries. You must be saving a hefty amount each month?

The only thing that would put me off selling the flat and paying for independent school is that the flat is your inheritance from your parents. If you throw that money into the education pot and you and your DH split up down the line (I'm sure you won't, but just saying) then when your assets are split you would have nothing to show for that £125k.

It always surprises me that people think independent school is unaffordable on such high salaries on here. When my DD1 moved from preschool to independent primary it actually cost less money. You get used to paying it each month.

I know no one can ever say anything for absolute certainty, but I’m pretty sure DH and I won’t be splitting up - and there are assets in addition to the flat if we did. Realistically, divorce is very unsettling for children and I would want to make sure I did everything in my power to keep everything stable for them if that was to happen but equally it’s hard to live your life on the assumption that it will, if you see what I mean.

I think people get confused between the very big public schools and smaller private ones - the mentions of the costs of uniform show this. There are two private schools in our town and both have a uniform that is the same really as the state ones: skirt/trousers, blouse/shirt, blazer. It’s a nicer colour but I won’t have to fork out for expensive hats (which DC will lose if they take after their mother!) or capes or anything.

I'd look on the website for uniform costs (not that I think it would be a deal-breaker if all else was in place). Don't assume it's the same as state because it looks it. They could 3/4/5 times as much for things like blazers and sports kit.

OP , as you rightly say, none of us can know what might happen but you do the best you can. Mine are in indie now because state was failing them. I'm a single parent, it's v v tight and I will have debt. Uni fees, if needed, will be loans that they'll have to be responsible for and they'll be no house deposits when they're older. But for them, now, it's the best thing and I must find the money. You will make your choice based on whatever your particular concerns or drivers are and the specific schools available.

I’d sell the flat and invest the money.

pay for no 1 out of salary this gives time for the investment to grow before you start drawing down. Hopefully your income would have gone up and paying for no 1 will help focus and stop too much lifestyle creep.

I always found that although the uniform was slightly more expensive, it was better quality and lasted for years. Also at our independent schools they always had used uniform for sale in excellent condition if anyone wanted it, plus a lot was passed around the parents. It's not something I would count as an excessive cost. The school trips were no more expensive than state school residential trips either.

@FromTheFront2theBack

I'm going to disagree on tutors.
There are tutor's and tutors.
A good tutor, working one: one with a child can make all the difference to a child's life in terms of drilling down and creating a bespoke education for your child!

Even more than a maths teacher would do with smaller than state classes.

However I completely understand what you mean about general cohorts and attitudes.

The whole experience is just usually nicer...even the building and locations!

As well as everything else including teachers being nice!

I'd hold onto the unit and have a tennant for income. Use that money for nanny/after school help.

@Volkswagenitalia .
I don't follow the logic surely you know if your the kind of person who would put pressure on your dc or not?

I' do know if a family who do and I know plenty who never ever did.

I think it's a little odd that you want your children in private from 4 because you are worried about the experience they will get in state and changing friendship groups at 11, but yet at 16 having been in the same school with the same children their whole lives, you suddenly expect them to leave all their high achieving middle class friends and attend the local college. Aren't you worried about the change socially as well as the effect of the different teaching style affecting the results of their a levels (probably the most important exams of anyone's life)? After being cosseted and spoon fed from age 4 this is surely not the point at which to throw them into the state system where they will be left to get on with it.

If you are going private I would definitely plan to at least give them the option to stay in private until 18.

I have a friend who left private at 16 and went to a good state comp. He didn't end up getting any A levels. Got in with a crowd who, while not unpleasant people, had low aspirations and mostly ended up unemployed or in minimum wage jobs. Just one example but I don't think it's a good age to swap. Particularly if you don't rate the local state options.

Well, there’s rather a big difference between four and sixteen. The option is there if they want it but I would encourage moving on.

At four the main concern if you like is not being in huge classes and the wraparound care.

At sixteen, having been in the same environment since being four, I think a change before university would be good. It is a long time from now. I don’t see it as odd - sixth form
colleges do tend to encourage independence a bit more than schools - but then we all see things differently.

Nannies really aren’t an option. Even finding a nanny for just an hour before and an hour after school care would be nearly impossible, never mind the fact that we’d need a nanny who never had sick days, and we wouldn’t need her for 90% of the after school care but would need her to be available anyway …

On your salaries and assets, you will just about manage two kids in secondary only, or comfortably manage 2 kids in primary only/1 child in primary + secondary.

OP, speak to a financial adviser instead of asking MN.

See, I know it sounds like I’m being deliberately awkward, but how do you work out well ‘just manage’ with over £80,000 left for the family after school fees are paid at the most expensive point?

I know that sounds combative and I don’t mean it to - I am genuinely wondering what it is I am missing!

As your margins are quite tight be aware that there is a strong campaign to stop Private schools from being charities anymore (quite rightly) so fees may rise by 20%. It's much harder to go from state to private than the other way. I had friends do this any they stuck out like a sore thumb.

Is it your income or take home pay that is £120k ?
If it's take home then I agree you've got a reasonable amount of slack in that budget, if it's pre tax income then your annual take home after school fees is around £50k not £80k.

Yes, although I make it £54,000 take home, plus around £5000 income from the flat being let. I might just be cheap, but it’s never felt like poverty!

There are other considerations that haven’t been mentioned and one of the main ones is wondering if it is just a little too closeted and small a world. Then there is my age - I don’t want to be in a position where I’m exhausted but forced to keep on teaching FT beyond a point I’d like to. But money wise on paper it’s fine. However, since my income would be paying for it we’d need to really talk about it as a family when the time comes.

The big problem with your calculations is you're only planning to fund your children in private education up to 16. You have justified this with the idea they will "spread their wings" but it is extremely cruel and unfair to give them an entire school career at private and then kick them out at 16. It is a big hole in your calculations which you're covering up rather blithely.

An independent school where most or even many go elsewhere for sixth form is a BAD independent school. Do not waste your money. If most stay but you don't plan to pay for your children that's downright cruel. You say you care about friendship groups at 8+ and 11+ but they are far more important at 16+.

Oh, I wouldn’t force them to leave if they really didn’t want to, but I do think they should. Assuming they intend to go on to university, I think it would be best to put a toe in the water of a more mixed setting before that point.

But we are arguing over something that will only happen in 2037 if at all

No you have deliberately removed the most expensive years of private education from your calculations. If you put those years back in you have a shortfall. It might work out okay but it might not. It indicates you should think again about your plans.

You clearly want to buy the wraparound care which will suit you. Fine. But it's nuts to plan to pay indie from 3-16 and then say you're on your own mate on the grounds they need to "dip a toe in the water". I think it's more like being shoved out of the boat tbh.