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.

@Jaalp if you managed to put the same effort into a google search as you have with arguing on here you might have found your answer!

Similarly considering what is at stake you might have thought about spending a few hundred pound on a lawyer to get a legal opinion on your scenario

🤔

You should get advice from a suitably qualified accountant, but I don't think there is any way of ring fencing money for private schooling except by paying fees upfront. Even then there may be a problem if you are investigated and turn out to have deliberately set aside savings in order to claim UC.

No, they would want to know why you bought 2 cars, especially if they were more than average family cars and could rule that it was deprivation of assets.

I must say, paying upfront in a large lump isn't going to help you when the school really winds you up and you want to go in and chuck your weight about. The type of posh school parental diva strop is seriously curtailed if you paid them til your kid is in year 12........

If you're going to pay school fees out of it, it would be a discretionary trust fund. These used to be disregarded by UC but they are no longer as they were being used for deprivation of capital purposes. It would have to be declared and a decision maker would make a decision. When a decision maker gets involved the process of applying for UC gets longer. If it is decided that the trust would be waived, your UC will be backdated. But if it's decided that the money wouldn't be waived, you won't get UC.

I’m a lone parent so I understand the weight of responsibility when you are the only person able to earn an income.

So with that said, what else have you done to make sure you and your child are financially secure incase something unexpected happens in the future? or you just want to rely on universal credit?

Because asking about how to ring fence this money for school fees so it wouldn’t affect a hypothetical UC claim suggests you have no other savings ring fenced for anything else. Your sole priority financially has been to ensure enough for school fees and that’s it? Perhaps that’s why you feel so worried about what would happen if you lose your job, because you have nothing else other than the money that in your mind is for school fees?

I always find it quite astounding when people with significant savings feel like they are being ‘penalised’ if they lose their jobs because they have to use their savings rather than receive any UC. It’s unfortunate timing if you lose your job and have to spend savings when it was meant for something else, but you are still at a financial advantage over those that spent frivolously on ‘stuff’ every month who have no savings but are receiving UC. Assuming you were to get another job within a few months, you (and others who feel are being penalised) are back in employment and still in a much better financial position than had you spent all your money and recieved UC. The sensible, most financially secure position to be in is to have enough savings that you don’t need to claim UC in the event of job loss. Even if that means spending some of your savings as a result.

It just blows my mind that people who save well have a sense of entitlement that they actually deserve UC more than someone who’s not been able to save money for whatever reason. It’s moral superiority for sure.

Those savings won’t cover 14 years of private education. Sorry to break it to you.

Also if you've got £200k and a house then you'd probably be ok. I get being on your own is anxiety producing but with assets you have power. The sort of power you don't normally have if your forced to claim UC.

No you could possible safe guard some money in an account for your child, but it would not be possible for an under 18 year old to access, and also not be possible for anyone other than your child to access. In terms of school fees, you cannot save them in a protected way, if the money needs using for other things before the school fees, then you would have chose a state school.

OP, I appreciate this isn't the point of your post, and I'm offering no comment on your original dilemma, but do you have any links to studies/research that show that private school children are happier?

I was privately educated from 5-18 and ended up with significant mental health issues (there was a big trend for anorexia and self-harm in my school, likewise at my Dad's private boarding school there was a trend for staff sexually assaulting pupils).

So many of my privately educated friends have no desire to put their kids through private school and don't consider it essential to happiness. Both my sons are very happy at the local state primary and have a diverse friendship group. I just wonder if you should challenge the assumption that your child needs to go to private school to be happy - not saying don't send her, just don't assume you will get a happy child at the end of it.

I'm not saying some kids don't do better in private - I am not inherently anti-private school - but I would genuinely like to see the research/statistics you are citing if this is the basis of your decision.

Couple of options. To truly put aside/ tie up, look at a junior ISA. If these are for fees for a specific school, you can pre-pay/ put an advance towards fees before they start school.

@Annabel28 it is based from experiences very close to home. I am aware a lot of negative experiences can come from private sector but on balance I think overall it’s better. Obviously nowhere is or can be perfect.

This. OP - like you I wanted to give my child the absolutely best start in life and thought private school would be a much nicer experience for her, but as I said up thread - I now consider it a complete waste of money and can't wait for her to finish and get out of there.

@SleepyHollowed84 thank you for looking at the fees at my local schools 👍🏼

I would advise you to buy a house near a great state school to have a backup option.

Genuinely, if you have (or the potential to have) the six figure sums of money required to fund 12-14 years of independent school fees, why would you expect to shelter that for UC/benefits purposes?

And why wouldn't you redirect the amount of time, energy (and professional fees) into finding decent income protection insurance and building up a sensible rainy-day buffer instead.

I say this with compassion, the fees are just the start. You will spend thousands on the extras - and no, a lot of them aren’t optional extras.

If the fees are around the £15k per annum mark, I’m assuming it’s a smaller private school. Do you know what their fiscal position is given the VAT introduction? Are they financially secure to last the next 14 years or do you anticipate a school closure and therefore huge disruption to your child’s education? Are they about to get sold to a big corporate education company to stay financially secure?

I am not anti-private school but in the current climate I would think very, VERY hard about sending a child private unless you’re sure the school won’t go under and you can afford all the fees and extras - comfortably.

Whether you want judgment or not, I think you are a disgrace

What you are planning is theft, pure and simple. You aspire to be a thief

Let's hope your kid's fancy school teaches her better morals than you can

OP: I have six figure sums of money available to pay for independent school fees.

Also OP: I want to retain my eligibility to claim UC which has a savings cap of £16k.

You should listen to the financial planner on this thread. With good advice you should invest that money in your own name and it will make more and cover any potential unemployment costs. Investing it in your name means you can be more agile than an unwieldy trust and you can avoid paying tax on a lot of it (totally legitimately through the use of ISAs).

Trusts also cost to set up and to run, further eating your investment profit.

If you have a mortgage UC won't pay it which is why if you own a house income protection is a good idea.

@Jaalp
A trust won’t necessarily protect you. The DWP are increasingly looking at trusts as deprivation of capital.
I wouldn’t be getting all cocky based on some forum answers.

Late to the party but here goes…@Jaalp I’ll start by saying you’re doing the right thing by looking forward and planning for different financial circumstances.

1. Sit down with a fee only financial planner to discuss investment options for this money.
2. Sit down with a tax advisor to do the same
3. Ask both the same question that you asked here.
4. I would also make sure you are saving for things like a bout of unemployment, retirement, day to day living.

Honestly, if it’s legal and advantageous, take advantage of it. It’s all well and good to cry unfair… but at the end of the day you are beholden to your conscious, your child, and yourself.

That’s why she’s been advised to consult a solicitor that specializes in trusts.

It would raise suspicion if she moved the money to a trust then tried to claim UC within a short period of time. OP isn’t intending to claim UC, she’s ring fencing money in the event of the worst case scenario. It’s very unlikely that what she is doing would be considered deprivation of assets.

Agree, it’s strange! Private school is a massive commitment, I’d be looking at income protection insurance (which is expensive g

But OP - a few things to consider

1- if you lose your (high earning) job it can take a long time to get a new one (speaking from bitter experience) - 6 months is not long
2- trust is the way to go
3 - you have a mortgage. I wonder if you could (over) pay into that, & release equity if needed : very expensive way to do it with charges etc
4- legally UC asks about cash/savings. I reckon if you bought physical investments (art/wine/classic cars/gold/whatever) this would not be considered and could be liquidated. Again, risks here