Separated and now not sure how to manage this financial situation?

[BRre]

Me and DP separated last year. A good summary of why would be that he was an absolute workaholic. Since we separated he has actually spent more time with DS 7 than when we were together.

Ds is in his second year at a private school that he absolutely loves. It really works for me too as the days are 8-5 and then can stay an extra hour if needed. We’ve been really happy with the school and the arrangement has always been since we separated that we pay 50% fees each and then ex pays me 850 a month which is what he would pay if I went to cms. We are generally amicable so I don’t feel the need to go to cms and hes also paid for clothes etc and bedding if I’ve asked, for instance.

so basically things have been ok. However since the introduction of vat I feel so stressed. I know it’s a small percentage in the grand scheme of things and that I’m only paying half the fees anyway but I keep thinking that this is essentially going to use every penny of my savings until he finishes school (I’ve got around 156k left for my half of the remaining 10 year).

Now I am single and can’t imagine I will ever meet anyone else, all is ok while I’m working but you start thinking of all the worst case scenarios don’t you? I am so stressed. I’ve been honest with ex but he’s basically said he can’t and won’t pay more as he’s already paying half and then 850 to me a month and he has to be honest and fair to me that if I can’t do my share as we always agreed then ds will simply have to leave.

i don’t know what to do. I don’t know if it’s better to take him out now while he’s still young, so he can make new friends asap? Would I be making a huge mistake? My family think ex would stump up the last couple of years if down the line I literally couldn’t pay but obviously I don’t want to bank on that and the stress will never disappear. That said, if I was being positive about things I guess I could say all will be well and I’m just being too cautious? Ex thinks I am thinking negatively and there’s no reason to think we can’t manage this as planned.

I don’t know what to do and feel like it’s all on me to decide. It’s been so unsettling separating so I don’t know if that is affecting my view.

@Ponderingwindow state wraparound is still loads cheaper than private though

I think you are being overly cautious. Particularly as your ex is giving you a fair whack which pretty much covers what you are paying in fees. How are you actually storing your savings? I know that you feel the pressure but you are giving your child an amazing start.

I would take with a pinch of salt the posters telling you to ditch the private school. Suspect many will be just very anti private school.

Will you have enough savings left over to support your Dc through university and also for savings for his future? If not then I wouldn’t stay with private school.

I’m not anti private at all - my two are In one. In your case - I would rethink private. It’s not only the extra VAT, it’s all the other stuff on top of it. You already seem so nervous about it - it’s probably best to do this while he is young rather than year 6 or something.

Surely you are earning circa £650 a month on those savings, so that plus the £850 maintenence pays for the fees plus almost £500 left. You will still have almost 4k a month income after the fees & your mortgage is only £500pm.

What is your mortgage / equity level like?

@herbetta where I can invest to get that return?! That would actually change things. At the moment it’s in premium bonds and Isas but get nothing close to 650 a month

You're assuming that you won't add anything to your savings, only taking out. Your take home pay is £3500, mortgage £500, school fees not coming out of that - so I'm guessing you're able to save something each month?

Yes this is what I came along to say. Surely you’re still adding to savings every month, and as other have said you need to maximise what your money is earning for you. Do a couple of smaller accounts with fixed higher rates while leaving some easy access. Money saving expert has some great suggestions that are kept up to date. The account I currently have would bring me in nearly £500 a month on what you have. Yes that’s taxable but still it’s almost half of your portion of the school fees annually. I’m sure you could maximise it further.

I do think you’re panicking unduly, but equally you need to give a rough summary of your outgoings rather than just fees and mortgage vs income. Do you have any debts? Massive fancy car?

If you paid off your mortgage would what you save in interest be better than your current return?

Or reduce the term of your mortgage so you pay it off quicker increasing your financial security and freeing up more to contribute to fees in the future.

You don't mention work income ? If you can find a job you could add to your savings instead of using your savings. Also you mentioned the hours at school these are perfect for working as you wont need to pay additional costs for after school clubs

@BettyBardMacDonald but she's not paying 100% of it, she's paying half of it.

other things are as expensive for 1 than for 2, so overall expenses are increased, but its not the same as paying 100% of school fees out of one incone

I don't really understand why you need to pay out of savings at all? School fees plus mortgage is till under £1600 a month for you out a take home income of over £4000 per month? That leaves loads of money left over surely???

It does sound like you could be catastrophising.

does the school do any bursaries?

is there anything you can do to lower your outgoings?

Can you get in the habit of sell things dc has outgrown for a bit of extra money?

hopefully schools will keep their fee increases on the lower side and look at lowering their outgoings and it’ll hopefully balance out over the next couple of years.

Yes it is, but it's not guaranteed & it's not as reliable.

Hey OP, I am also confused why you paying for the fees out of your savings when you have such a low mortgage and OK earnings and decent maintenance?

I am anti-PS myself; however, that's not the issue. It's really normal to feel very vulnerable when you become a single parent, particularly around money and your ability to provide for your child. I wouldn't make any rushed decisions now - it's hard to make good decisions based on anxiety. If you solve this problem you may find you are just anxious about something else.

If your son is happy at school, that consistency and stability is beneficial for him, as he will also be adjusting to the separation.

You could model what the school fee increases are likely to be - look at what the annual increases have been over the past few years, work out an average and then project that average forward (you could add on 1 or 2% to the increase, to be cautious).

You could look at investing your savings differently - if you lock some of the savings away for 5 years you may get a higher rate of interest.

Nothing is certain. Your ex could lose his job, have another baby, move abroad. Whatever happens, you will find a solution at that time

Is this stealth boasting . . . ?

I'd keep your son in the private school and do everything you can to help your own financial situation. State schools are in a complete mess, avoid them if you can.

That's just 5% of 156k. Last year NS&I were doing a 6.5% fix. I'm no financial expert (again starting point is MSE) - but get the rates locked in before they start decreasing. Have as much as poss in Cash ISAs each year to minimise tax.

@BRre

id look at it slightly differently

He is 7, he's just been through you splitting up & having to get used to this new arrangement

he's happy at school & you have good childcare there.

you have a lot of money in savings.

while you are navigating your new phase of life & finding your feet, I don't think now is the right time to be moving him.

i think there such a natural break between years 6 &7 I'd plan to leave him there until then, but you can move him at any time, you could move him to do one year at the feeder school for the senior school you can enrolled in.

im a little confused whether you're actually worried about being able to pay your 50% until he's finished or whether you have other things you'd prefer to do with your savings.

Oh behave.

shes fairly newly single with a young child to raise & be responsible for, it's an unnerving time.

she might be in a better financial position than many, with savings some of us can only dream of, but it's still new & scary for her.

Premium bonds aren’t an investment. Get proper advice before doing anything rash. Your panic seems to be emotional rather than factual. Could you take on extra work to make the few hundred quid if you had to?
Probably with his parents just having to split up it wouldn’t be great for him to change school too, if it can be avoided.
Right now you have his father locked into a 50:50 arrangement that covers your whole working day. He may be less willing to contribute to the wraparound care. I wouldn’t change an arrangement that’s working.

Well personally I don’t believe private education is worth the money so I would take him out now. Just think of how the financial freedom will add to you family’s quality of life; the lovely holidays and hobbies he could have, savings for his future, quality time with his parents (who perhaps wouldn’t be so stressed or working so hard). Unless he is special needs, he will be absolutely fine in a state school and personally I think he will be more well rounded into the bargain for going there.
Just my 2p!