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?

Having very much the same type of dilemma ourselves atm, OP! It's very difficult. Uncertainty over that added 20% in a couple of years is also making us worry.

I do agree with PPs that your calculations should include a concrete plan to afford those last two years unless you find that the DC themselves actively want a change at that point. If you'd prefer them to experience more than one school setting (whether for social, financial or combined reasons) then I'd be much more inclined to start them in state and then plan to move them to private later (doesn't have to be as late as secondary age). I think it's a lot easier to make new friends when you are primary school age rather than at 16, and if the private school is a really good one then it should be very much worth paying for educationally at that stage. Though obviously that doesn't solve your wraparound care problem.

You really need to rework your figures adding 10% fee inflation on each year to get a more accurate reflection of costs. And then add 20% VAT on top. I have 2 DC at private school, we have a household income of c.£200k and are finding it quite tight out of take home income. It was especially tough when DH lost his job and took a while to find another one.

Please don’t think we wouldn’t or would begrudge paying for A levels. If that’s what they want, that’s what we’d pay for. It would simply mean the ‘difficult’ (most expensive) years would be extended to five rather than three but that isn’t an insurmountable problem.

We shall have to see what happens with the 20%. I would be surprised if it happened - it’s a bit like shortening the summer holiday: I’ve been hearing it muttered about for over twenty years but haven’t actually seen it yet. Of course, I could be here in two years eating my words!

You’re in London though @edwinbear IIRC. That makes a huge cost difference to everything - not just school fees.

I mean, to put it another way - let’s say I wanted to give up work and I created a thread asking if we could ‘live off’ £80,000 a year, plus a bonus, plus around £500 rental income. I’d be absolutely torn apart for even asking, wouldn’t I?

The general view in the private sector is that it will happen. All the heads in our area are canvassing parents for their views and the impact it will have. We're in the position to be able to pay full fees up front, in advance before it's levied if it goes ahead, so we won't be impacted, but many people aren't in that position.

And yes, London schools are definitely more, we're paying c.£20k pa for each DC which is a lot. Don't get me wrong, I'm a big advocate of private schools, we're very happy with ours and have had them in since Reception, but just do the sums with fee inflation and VAT to work out what the absolute worst cost scenario is, and also think about contingency if one of you isn't working through redundancy/ill health etc. You'll want at least a years worth of fees in savings to give you a cushion.

I hope it doesn’t: we shall see. I would be surprised if it did if only because the resulting spill into state just isn’t something that would be able to be absorbed and plus, many of Labour’s core voters are a bit ‘champagne socialist’ and I don’t think it would go down well. But we’ll both just have to cross our fingers. It’s very sensible to have that backup plan and that’s what I want to be absolutely sure of before committing to anything. It’s been a really helpful thread in terms of getting down figures and analysing them and exactly what we(I!) can afford.

I don’t see the issue with moving at 16.

It’s a good way to start getting used to being more independent in readiness for university with the safety net of still living at home. It’s an easier transition.

I did at 16 myself. sixth form college I attended had a lot of ex private school children. Admittedly many from single sex schools who wanted to mix with the other!
it really broadened my horizons and I made some great friends.

The change of school and friendship group at 16 can’t be a massive thing otherwise some state secondary schools wouldn’t stop at 16. Our best-performing local state secondary stops at 16.

@Jarstastic I think it depends how many others are moving.

DS16 would have been devastated if I'd moved him at the end of Nat5s as all his pals and sports are linked into the school.

I don't get this at all...why invest in all those formative years to then stop paying when they are making key decisions that will affect what they do after school and would do well to benefit from teachers who know them and their character well and can help prepare them for the next steps.
I went to a different sixth form but I was in a crap school to begin with. A levels and future decisions (and having teachers who know you to bounce those thoughts off) is more important than GCSE grades imo.....

Also think someone night have already mentioned it but if rhe flat is worth £125k and not your main home I wouldn't assume you will get the full £125k...have you calculated your capital gains tax?

If I could, I would!

The thread has been really helpful - thank you - but being berated for something that won’t happen until 2037 is not helpful!

I have explained my thinking on this - the final decision on where they sit their A levels is on my DC. But equally I think it would be very good for them to get used to a bigger, more diverse and mixed environment before they go on to university. My worry would be struggling to cope with the demands of being away from home and with a very different environment from the one they’ve grown up in. It would be a suggestion, not a command, however.

You are right re CGT and we have gone through this. I think this is where taking financial advice would be good whether we go down the independent school route or not.

People are not berating you, they are giving you advice based on their own experience

You have budgeted (according to what you have posted on here) for everything up to but excluding A levels. You keep saying it will be fine financially but again posters are only going on by what you have stated which in a lot of opinions looks like not enough if you had to pay for 6th form too

It appears that you are only considering private to help out with childcare and not what is best educationally for your DC which imo would include A levels. Yes it’s in the future but it is being impacted by decisions now