To ask how I can successfully ringfence this money? (Please don’t post for moral judgement)

[Jaalp]

I am a single parent to a 3 year old who will start school in the next two years. I have saved up a significant amount of money for schools fees. As a single parent I am constantly worried about job loss or anything else that could affect things. I am aware that if for some reason I was made redundant, for example, if I have more than a certain amount in savings then I would be expected to use this before claiming universal credit etc.

I have no intention of claiming universal credit but life happens and I have to be conscious of the potential things that could happen.

My question is, is there any way to put this money in an account for my child that would be protected as theirs and not counted in an assessment for universal credit etc should that ever happen?

Please don’t make this is a private school bashing thread or about playing the system etc. I’ve worked hard all my life and intend to continue to do so. Thanks.

We have two full time incomes and there's no way we could afford to squirrel away enough money for private school fees. You obviously earn a lot of money, worrying about what happens because you're a single parent is normal however, planning to claim UC whilst hiding assets so you can send your child to private school is not the right thing to do. In this situation you can cut right back, send your child to a state school, you might not even need to claim UC in that circumstance. Private school isn't the be all and end all especially in primary stages.

On another note, I really don't agree with your take on blowing your savings on cars and holidays so you meet the UC threshold, your savings are there for a reason, emergency financial situations are paid for by savings. UC isn't a lot of money a month once you boil it down, it could be less than 2k a month even if you are completely out of work. If you can survive on this as you say then you can afford to cut back to get your outgoings as low as possible to make your savings last a lot longer, not blow it all to claim a low income benefit, should the event of you losing your job arise ofc course.

You could set up a trust account. Not completely sure of how they work entirely but they are protected assets I think.

You can put money into a discretionary that pays for education, but please note that if you then had to claim benefits they could look through your accounts and consider the setting up of the trust as deprivation of assets (which it is)

Before I put my children into private schools I spoke to all of my friends whose parents had scrimped and saved to send them to private school, some who were on partial bursaries, to see if they felt it was worth it. All of them were happy that there parents had done so. I can't afford to send my own children on all of the extra trios, they've never complained.

I totally agree with this.

My entitlement was very low as I was a single person. And tbh the savings may have been closer to £16k it was almost 10 years ago when this happened and I had saved it up over a lot of years.

just personally felt like I may as well have had more holidays or not used the same old computer for 10 years. I had no idea savings were taken into account until I was in that situation. If they take savings into account they should take assets into account

The rules on prepayments are designed to prevent this:-

Are fees that have been paid in advance also be taxed?

Any private school fees paid after 29 July 2024 for tuition and boarding fees covering a period on or after 1 January 2025 will be subject to 20% VAT.

Any fees pre-paid before 29 July 2024 for tuition and boarding from 1 January 2025 may also be subject to 20% VAT depending on the arrangements that the pre-payment scheme made. Your school will be able to provide more information on its pre-payment arrangements

OP, trust fund as suggested above with the purpose of education and child support so you can pay both school fees and some living expenses for your DC as needed.

Given that highly moral taxpayers want you to pay VAT on said school fees on the top of usual taxes you have all moral rights to use every penny out of the system as you wish.

I don't doubt there is a way to do this, because, well look who writes the laws.

But it is of course playing the system and (morally if not legally) defrauding the taxpayer, so how on earth you thought you could have this thread and we'd all just merrily ignore that is beyond me.

I don't know enough about trust funds, but they still may be considered an asset. Assets are looked at overall before you'd be able to claim any sort of benefit. I could be totally wrong and speaking out of my ass though.

If I were you, I'd pay that mortgage off or most of it of you have sizeable savings. Why pay more in interest in the long run. It doesn't make sense.

It sounds like you need to speak to a financial advisor and work out the best to invest, save, and utilise your savings. And yes of course school fees if thays what you'd like to spend it on.

It sounds like you're financially better off than the majority of couples. So we'll done on thay front. But your priorities are in the wrong order. There are many other things you can and possibly should be doing of you're this worried about supporting your child.

Good shout. There couldn't be two of them, surely.

Well, obviously you can do it. But, they will check, you will probably get charged with Deprivation of income and then you might go to prison.

Hopefully, you're looking at 52 week boarding options for the school?

Apologies for the typos

It's not a matter of tax or inheritance law, but a matter of benefit rules.

I'm not aware of any specific exemption for money placed in an education trust fund from the deprivation of capital rules, in UC regulations or those applying to any other state benefits.

Happy to be proved wrong though, if you can find the relevant reg.

Laughable

Don't shoot the messenger. As I've learnt, protecting your assets from the taxman is the norm for the wealthy

Dear op, I have no idea what the options are, but understand 100% what you are thinking and think you're very sensible. On a wider point the people on here have no idea of your situation or reason for going private, there may be some excellent state schools but there are also a hell of a lot of dreadful ones. Why is it better for a wealthy person to move to the catchment of an excellent state school which a poorer person couldn't afford than go private and save the state money and make it more likely a poorer person will be able to get into an excellent state school as there is one less person to cater for?

Is education a luxury?

When there's a free equivalent, yes.

I think of private schools in the same way as bottled water. Yes, water itself is essential. That's why everyone in the UK has access to it.

If you choose to spend a fortune each month on bottled Evian for your drinks, baths, laundry - well, you do you. Your choice. I don't particularly care.

Just as long as you don't come at me, moaning about things to do with bottled water and telling me your special extra-refined taste means it's essential for you. It's not. You already have the essential version. Buying it in bottles is a luxury you choose.

To be fair, you are asking how to make sure taxpayers would pay for your living expenses as you’d rather use your savings for something else (in the hypothetical case of you losing your job).

To answer your Q though, I would have thought putting the money on a kids account and using it for school fees would be ok as it would be clear that the expense is purely for them.

And protecting your assets from the taxman is the norm for anyone with any sense, the govt gets more than enough money but wastes alot of it.

Surely if you pay the mortgage off but maintain your income at the level you are at now you can pay the school fees with your income, because the mortgage is less/non existent??

We overpay our mortgage after both unexpectedly getting promoted. We wouldn't expect to save up our increase in wage and 'ringfence' it for a luxury, nice to have item (which is what private school is) and expect UC to step in if we lost our job. That just isn't how the world works?

They do take assets into account.

It was your question "Is education a luxury?" No, it isn’t, but the OP's child would get an education free. She is just choosing to spend her money on what she believes is a superior type of education.

no, you’d be expected to use the school fee’s to live off

This- you are in a position much better than many who are surviving month to month