Private school fee increases

[stripedpenguin]

My DH and I are trying to do the sums to see if we can afford private education for our DC. Last year's fees in a couple of North London schools seemed to increase by 6%. If you have DC at private school, what have been the average percentage increases over the years?

I've seen the recent thread on a similar topic but didn't get a sense of what the average annual raises have been (I confess I skimmed it a bit!)

Thank you in advance

Varied from 2.3 % to 10.5% (this year new bursar). This year with big increase and move into next price band (look close at this) makes a 29% increase for me.

I have seen average fee rises over about 5% per year - sometimes a little more and sometimes a little less, but one certainty is that there will be increases ……

Lonecat is absolutely right that you must also factor in the 'leaps in cost' as children progress through the school years - pre prep, prep and into seniors.

Then its important to check what is included in the fees, will you be paying extra for lunches (sometimes compulsory), educational trips (can be several per term, we pay for all day trips, which may only be £20 - £25 but it all adds up), transport (will you be using school buses)

I would recommend erring on the side of caution and plan to expect the costs to rise and rise and rise ….

Fee increases have tended to be a but smaller in the last 3 or 4 years - typically around or below 5%, but before that had a phase of being close to 10% in some areas for several years.

Apart from building in for the jumps (especially to secondary, which can give you a 50% rise easily in many places) I would project forward with 5% rises for inflation. I would also do it with 6/7% to see what that would look like too.

Incidentally, our increase for next year has been 3% and 3.75%. I'm always pleased if the increase is less than 5% because of course the effects are cumulative over time, so any early big increases have a larger effect.

One tip to save money is to look into paying in advance if you can - schools have a variety of schemes,from those that basically give you compound interest on the money you put with them, to those that mean you pay fees at the current rate, rather than with the increases of future years.

5%, 5%, 3%, 0% this year. Yay!

Why is senior school so much more expensive? Classes are often bigger, aren't they?

Good advice here already.

I'd just add to think about how the facilities are. If there are building improvements and projects in the pipeline you could expect their ability to hold fees down will be limited.

In addition, if the school has a drive to increase the number of bursaries, this will also mean pressure on fee payers to cross-subsidise. After all they are charities!

Habs girls - 10% and 9% last two years. Am fervently hoping it's just a blip due to their big building project - if it continues like that would double in 7 years

Thanks all, really helpful. 10% for Habs - gosh. I am sure they quite prides themselves on having a lower level of fees amongst private schools about 20 years ago. We are looking from junior up to senior and it feels like trying to guess the future - an impossible task!

Basically - more than you think!!! Our school funded bursaries largely out of fee income and lots of poorer schools without rich benefactors have to do this. Building improvement is another cost that adds to fees. Enlarging the school roll can help but if too many leave there will be repercussions regarding the fees. This is why it is so difficult to plan and we know families that have had to downsize to pay the fees because their savings were insufficient due to unforeseen fee rises. I would look at the type of schools you want and do compound interest of at least 5% per annum. Don't forget that the school governors set the fees and they can be out of touch with the parents. Also if you go to a school full of the seriously rich, they don't care anyway!

Senior schools run many more subjects and usually far more sport, music and art, not to mention more extensive grounds. Headteachers get paid more and so do many of the other staff. The school buildings are usually bigger but we found class sizes about the same. 18 at prep and 18 at senior school. Far less in some subjects at GCSE and 6th form. Library and IT costs are more. There are vast differences between day fees too. Our old school is £7500 for day each term. Plenty of others are nearer £4500 for day pupils each term. Depends what you want but obviously there are savings to be made if you choose a lower priced day school.

2010-11 4.00
2011-12 5.50
2012-13 5.94
2013-14 4.31
2014-15 4.01

I have a spreadsheet (either I'm very anal or it's just because I like playing with numbers!) which not only tracks the current costs, it projects forward assuming 6% so we can monitor whether we can still afford it. I also track the senior school that DC is most likely to go to, and university fees based on Cambridge (might as well base figures on an expensive one...). We are very much the 'going-without-everything' parents of the school year so I can't risk misjudging the amounts.

sorry formatting went a bit wrong there. Try again.

2010-11 4.00
2011-12 5.50
2012-13 5.94
2013-14 4.31
2014-15 4.01

So inflation at those rates would take fees of £4k per term up to £5k in 5 years.

Meanwhile inflation for just about all other goods and services has been very nearly zero, as have rises in net incomes for people on ordinary professional salaries unadorned by bonuses or by the other exotica with which people actually pay school fees, as often explained here on MN.

With a few honourable exceptions, eg City, CLSG, JAGS and the GDST, the London independent schools have basically abandoned their natural constituency (local middle class professional families) and have betrayed the principles of their founders and the social consciences of the vast majority of their staff and former pupils, as their "Tatler" and "Sunday Times" award winning heads seek to pander to the super rich, letting them have whatever luxuries are in vogue, money no object and regardless of educational benefit.

As a supporter of independent schools, it just makes me sad to see some of the best ones in London so spectacularly badly led.

Cue the usual tirades about how the market can bear it, schools are businesses, granola is hopelessly out of touch etc etc.

Moonbells love your spreadsheet idea, but I would change your project uni. Oxford and Cambridge are often relatively cheaper as colleges have owned their property for centuries so halls and food costs are often cheaper plus they often give students money for books etc. I have based my calculations on Imperial so projecting London accommodation costs anywhere will seem cheap in comparison.

I can't comment on Cambridge but Oxford certainly wasn't cheap for rent, college or private. Cheaper than London, yes. But it came a pretty close second! It's true that there were hardship funds, but they are given on an ad hoc basis and not something to bank on.

And the fees are almost the same everywhere, the (current) full whack of £9k per year, with a few exceptions, if it was the fees you thought might be more at Cambridge...

Cambridge is pretty good on living costs and has hardship funds that other unis do not have (get travel scholarships etc). London uni budgeting is probably the wisest.
We have had less than 5% each year, but there have been significant jumps in fees depending on the age and which part of the school DS is in.

London does seem a different world away sometimes so (I hope) there may not be as large a jump in school fee increases else where. At least, I hope DS's school does not start a hugh building project.

Looks like I shall have to fiddle with my figures again then Lone and others! I have even worked out as far as six years if he wants to go medical/dental/vet but so far he is looking like an engineer so I can possibly get away with 3 or 4. It's the living costs that are the killer! And postgrad... argh.

At a pinch DS could study at home if he gets in a London Uni, if things get that desperate! But given he's still in single figures, there's an awful lot of water to go under the bridge first!

Anywhere between 5-8% each year

If anyone wants the really scary/pass the gin bottom line, it's that the projected school fees total from Reception to Y13 are a shade under £300K for a selective London prep and a good senior day school of the Habs/Merchant Taylors ilk.

I'm a bit anal too, so also did a spreadsheet a while back. The key shock is that although 5% inflation sounds sort of ok-ish, this works on a compound basis (so 100 becomes 105 then 110 then 157), meaning it doubles every 15 years, not every 20.

So, if you have a 5 year old now, and boarding fees at the senior school are £34k now, then by the time your child transfers in year 9 those fees will be more than £50k and will be more than £60k by the time they go to university. Obviously you can scale these down quite a it if your child is in a day school with lower fees, but it is still sizeable.

We've found, many years into the system, that although we've been lucky in our careers, many friends who could easily afford stuff at the start have really struggled in recent years, because their earnings haven't increased at anywhere near the rate of the fees.

I did the same as moonbell as I have 2 DCs and it was from Pre prep to seniors so we needed to know if we could afford it right through. Also I have assumed no pay rises for me and DH just so it meant we weren't stretching ourselves too much.

Our fee rises,tend to be smaller, around 3% but last year was a bit more but next years is less so overall my projection is looking ok (sad I know).

I also factored in school dinners and 1 lot of music lessons each.

Thanks all. I love the spreadsheet idea!

We have two DC and are looking from reception so compound interest of 5-7% would be a killer for us (assuming no significant jumps in salary/ inheritances etc). If they go up consistently by 5% or so a year, in 10 years time or so I would have thought that only a handful of families would be able to afford out of London day schools (ie not counting big name boarding schools, or private schools in very rich areas of London).

I think we will be turning down our selective prep place and go for our local state (which is ok but not great), and hope to succeed at the 11+ stage into a good independent. Hard to turn down the amazing facilities though!

I'm beginning to wonder if looking at universities abroad maybe the way to go. In the USA for instance they are more used to high cost fees but have good grant/scholarship programmes.

OP it is probably worth you consulting a financial adviser, preferably one whose company has experience with school fees planning. They can often find ways of making it affordable by using various tax breaks, and even make it so you're better off in later years.

We did, remortgaged the house at a very low deal, and invested the proceeds in investment ISAs. They're earning more than the 6% we need, even after allowing for the amount of interest we pay back to the bank for the mortgage. So far we've managed to pay fees out of earnings (very tax inefficient) but at some point we'll have to tap into the main investment which by then will be able to cover all the subsequent fees. Feeding DH's pension with as much as we can means we'll get a tax boost and 25% tax-free at some point which should pay off any remaining mortgage, and give us a better retirement.