How to pay for private school with this

[Truroyouhave]

I’ve been given 70k. My dc is 1 and will either start private school at 4 or 8. There is a local state primary that’s ok.

I realise 70k isn’t loads in the context of private education. However, I have spousal maintenance of 850 a month which includes any child maintenance (agreed in settlement).

I earn well at the moment but I have precarious mental health. I try to save 500 a month for this reason… in case I crash and need a few months to get a new job. Luckily I’ve been in this one now 8 years but I still worry.

What would you do with the 70k? My mortgage is 250k outstanding but repayments are manageable.

(This thread isn’t about a political debate on private education so please don’t make it into that! 🙏🏻 Thanks ☺️)

I guess it depends where you are in the UK because private school fees vary?

My son is in year 7, school fees are £18,500 a year. We are Hampshire.

@oberst at the moment they are 6k a term. Expecting it to be around 20k a year when they start school.

You will also need to anticipate the likelihood that VAT will be chargeable so increasing cost by 20%

to e honest I'd pay off a chunk of mortgage and chuck what you save per month into a high interest savings account for the fees.

The 70k is only likely to cover maybe 3 years? So I would also pay it off the mortgage now to free up some money later.

Put it £20k per year into a stocks and shares ISA – it most likely will increase enough from now, til end of secondary school, to pay for the whole thing.

Invest it or use it to pay off debt, whatever will earn /save you the most money.

Revisit when your child is in year 4. Decide what sort of secondary you want your child to go to and use the money accordingly- eg tutoring to get into grammar, use it for a house move to be in catchment for a great comp, or keep it invested towards private secondary fees.

Starting private at age 4 is for people with money to burn. Even at age 8 I’d say the money may well be better spent on tutoring or a catchment move, than moving to private. Secondary is a different matter.

Once the 70k runs out after a few years, what are your plans for continuing to pay school fees?

Can you still get offset mortgages? Use the £70K to offset against the interest on the mortgage that will help it come down quicker. You still have the lump sum there but I think there is a minimum amount you have to have in your savings

Save it for senior school, but add to it so when you get there, you have the money saved.

Is your ex likely to go half with you on private education? Have you discussed with him? I don’t think 70k will cover his private education from 8 onwards. Would you consider sending him from secondary onwards? That is still gonna be tight even if you invest wisely and save up every penny of the spousal maintenance

You need to factor in between 5-8% per year fee inflation, if fees are £18k p.a now, they will be over £20k p.a by the time he starts. Plus an extra 20% VAT. Secondary fees are much higher, with VAT added, by the time he's secondary age, you could easily be looking at c.£35k p.a. I think state primary is the best option, then private secondary, to give you time to both invest the £70k and add to it with savings.

It depends how much you earn and if there is any chance your spousal maintenance/child maintenance could be reduced.

Could you for example afford to pay two thirds of school fees from your salary and use the 70k for the difference?

What rate is your mortgage?

I would also suggest putting 30k in a S&S ISA.

I think you need to try to invest it for growth above your mortgage interest rate, along with the £500 / month you can currently save. I'm assuming you yourself have a decent income from the sounds of it. When making decisions about schools, especially for senior school, seriously consider those that are best established and more likely to have decent bursary pots. I say this not to suggest you should plan on your child having a bursary, but to maximise the chance that if you run into health problems that jeopardise your own income, the school will have the resources to keep your child with them. Making great efforts to plan and save up in advance as you are doing will stand you in good stead if you do need to talk with school bursars at any point.