Private School fees - how do you manage?

[Moneymoneymoneyitssofunny]

Considering private option for DCs (in next few years) but just curious as to how people manage their finances to ensure that school fees are paid for duration of schooling. Paying out of earned income alone seems risky to me in case of unexpected redundancy etc but we have no source of help from grandparents or other, just modest savings, so tell me - what do other MNers do? Remortgage property?save up in advance? have other source of finance such as family members to help? Use specialist financial planners who deal with school fee planning? I'd be interested to get some advice/ideas.

Sorry, DD2 just told me she gets £1,100 per term for her maintenance loan. DD1 will get more as she's in London

Bank of mum and dad typically pays the other 12 - 15 grand in living cost.

How on earth can parents paying out 15k per year be considered typical. Most parents couldn't possibly afford to pay that much.

Accommodation costs do vary considerably and the available maintenance loans are less than 4k except for low earning families. However, I think that most students manage on 5k or less from their parents (which is obviously still a lot for parents to find, but nowhere near 12-15k).

It's only what I have been told by various sources. The NUS used to estimate 10 grand to live per year a while ago. A about a grand a month for rent and bills etc ( rent can be 500-700 a month)

www.nus.org.uk/en/advice/money-and-funding/average-costs-of-living-and-study/

Google of average student living costs gives estimates on several sites

www.leedsuniversityunion.org.uk/helpandadvice/money/costofliving/

Well DH just got offered a new job, upping our family income and share options so we can breathe lightly for another year??

Advice? Pay off your mortgage as quickly as possible, go state for primary and private secondary will be a lot more affordable when you're 7/8 years older, further down your career paths and with no mortgage!

Money I am absolutely zero qualified on this front!!!

But, as far as I know, anyone can set up a trust fund. It's easy to do, not even sure you need a solicitor. In fact, I know you don't because my FA did one for me. When you pay money in to a trust fund you 'lock' that money away for the benefit of the beneficiaries, to be used as stated in the Trust Deed. That money can't be taken out for any other benefit. But, the upside is the money is protected.

So, in this instance what I meant was if we were to put all our available cash in to trust funds for the DC's education, then if our own financial circumstances went belly up then that trust fund money would remain secure for the DCs. I think.

There are no immediate tax benefits. Although it can be a way of passing on your wealth and avoiding inheritance tax. I guess there are rules about when it's OK to do this. IE, not on your death bed.

I don't really know if this will be an option for us.

I'll PM you about financial advisor.

The NUS used to estimate 10 grand to live per year a while ago.

I think this estimate is on the upper end for average costs, because their point was that the available maintenance loans are completely inadequate.

However, let's take their 10k as correct. If students take 4k in maintenance loan, earn 1-2k over the vacations, then that leaves 4-5k for their parents to contribute. Even if they don't take loans, 8-9k as parental contribution would be adequate. Parents who are contributing 12-15k are either very wealthy (and happy to do so) or being taken for a ride by their children but people shouldn't be scared into thinking that they will have to contribute 12k+.

As this is a thread about private school fees, surely even £15k would be a walk in the park compared with senior school fees, school uniform, school trips etc.

Unless you're really banking on being fee-free by then.

Uilen lots of unis publish average living costs for their uni - if you google it you will see loads from different places across the uk. They publish them to help students forecast and budget before starting to reduce drop out rates for those not realising. The current ave is 10-12 grand a year. Lots don't get grants. Lots do work but lots don't. Some places don't allow term time jobs and some courses are 5-7 years long... But yes pp is correct in that the costs are the same as nursery or private school - but the extra years should not be overlooked

I don't believe that average costs are 12 thousand per year (outside London and the SE). Universities don't tend to publish average costs, but rather "maximum" costs. For example, Oxbridge often quotes the 12k figure for self-funded post-graduate students but there is no way that a student needs as much as 12k if living in college accommodation. Note that Cambridge quotes 8k for undergraduates.

Even taking into account that universities quote highish figures as they prefer students not to underestimate costs, there are many counterexamples to a 12k figure, see

www.southampton.ac.uk/international/fees_money/living_costs.shtml

at 7k-9k or

www.nottingham.ac.uk/studywithus/international-applicants/scholarships-fees-and-finance/general-living-costs.aspx

BTW I am only taking into account working during vacations, not term-times. Earning 1k per year during the 10-12 week vacation is not that hard for most students.

I think this discussion is partly relevant to this thread, because it concerns how much parents considering private education should budget for higher education. Depending on financial position, parents might want to budget for the worst case scenarios in higher education e.g. 5 year courses in London or more typical scenarios.

Yes, parents considering private school are regularly told to save the fees and spend it on tutors, enriching activities and university costs.

I tell ya, that's a lot of guitar lessons and some BIG university slush fund .

Sometimes I think I would like to save the fees and spend it on an enriching holiday in the Caribbean for me

A "happy mother" and all that chaz!

We're not even contemplating uni fees at the moment. Current thinking is that the fees paid now will help them on their way to getting a decent job with a starting salary good enough to be able to pay back the student loans
They have to start undertaking financial responsibility at some point. Problem is that by then we will either be to old to enjoy the break from fees or too ill over stressing about paying the fees for past 8 years!

Salary and rental income here with very little savings. We've negotiated a rolling contract (offered to us so I don't think we are the only ones) so take things one term at a time, without penalty if we have to remove dc at the end of any one term (normally one term's notice required).

If I had stopped to factor in future university costs to education fund then there is no way we would consider private now! (Just thinking about the costs mentioned above as a future consideration is scary.). But I would rather invest in children at what I think is the more critical years and then hopefully they will have sufficient education/character/resilience/etc to get themselves through whatever they may choose to do post 18.

Cooki3 - thanks for that, will definitely investigate the idea of trusts to safeguard education savings.

My planning has us pay for school, pay as little as possible for the undergrad (which will hopefully teach DS how to budget!) and then have a pot for postgrad which I am not telling him about until he gets his first degree. Postgrad is the even bigger elephant in the room. It's incredibly difficult to get any kind of funding.

I don't expect to have a very luxurious retirement! if any

Moon regarding postgrad, isnt it too far ahead? I mean your dc could not want to do postgrad or even if they do who knows how things will be then. And also depends on the field: law and medicine are expensive but there is funding for steam.

I would definitely draw the line at one degree! No arse wiping after that.

Jewell what do you mean by a 'rolling contract'?

It is amazing how things change. Scarily, we set off down the fee paying route with DD1 in 1998. Fees (pre-prep) were a shocking £4,000pa (ha ha). University was still basically free (?!) and I admit that although it isn't ethically very sound, I did rationalise that the early investment would pay back in terms of being easier to get into a great university (yes I know). Then it went up to £3,000, then £9,000 (which in fact I am cool with as regards my own pocket, as it is basically a tax on graduate income) plus aaargh living costs totally out of kilter with maintenance loan funding. And worse still, with at least one talented but not terribly employable prospective humanities graduate, internships - aargh - what would 1998 me have said to those?

Anyway, I suspect we haven't finished with all this. If this much must change in the time I have taken to put just one child through school, what's it going to be like in 16 years time? More fee inflation, more interning? and possibly uncapped university fees? What a mess.

Thanks for that cheery note Fig.

In response to the original question - we pay 2x school fees out of monthly income and are working hard to build up a buffer so a period of income drop can be bridged. It needs to be a lot bigger than it is right now!