Private school - what percentage of salary do you spend

[cluelessnewmum]

Am currently trying to work out whether we can afford private school without making our lives a misery.

We're lucky that for 1-2 dc we would be OK with fees. However, I'd ideally love to have a third dc, and the fees might be pushing it for 3...

If your dc are in private school, roughly what percentage of your take home household salary are you spending on fees?

Obviously will vary depending on your location, number of DCs etc but I'm trying to gauge when it starts to become a financially stupid thing to do, acknowledging everyone's outgoings are different too. But useful to get a yardstick from others.

Thanks for your help!

In this case I'm talking years' worth in advance rather than individual terms. Yes, there's a discount. I think lots of schools would offer it as an option.

Ah yes our school will allow you to pay in advance - no discount though for doing so since interest rates are so low.

In general terms though OP you need to be aware that the changes in consumer credit legislation mean schools will be less likely to offer the option of paying monthly and so you have to get ahead of yourselves since you pay at the start of a term for the whole term (or sign up to a fee payment plan)

Other thing to bear in mind is that if there are any SEN issues you are likely to be asked for more money since the school can't utilise LEA funding. Fortunately our school doesn't do this but all of the other independents in our area do.

I want to know WHY fees keep going up.

Is it just the cost of getting and keeping good teachers, which keeps rising because housing (including teachers' housing) is getting more and more expensive, and we (including teachers) are all living longer and therefore having to pay more into pension plans?

Is it about schools spending $$$ on gorgeous facilities?

Are they just doing this because they can--because there are more wealthy overseas families prepared to pay incredible amounts?

Is someone, somewhere making incredible amounts of profit from all this?

I don't use private schools. I'm just genuinely curious about all this.

Our fees (south west) have gone up by 4-8% each year for I believe the last 10 years.

And as others have said - if your child needs any extra help then that is usually payable on top.

I have 3 children and it is expensive. But you know if at any point it became untenable - leaving to go to a state school is not the worst thing that can happen to a child by a long way.

Some schools will let you pay a block of years in advance but personally I would be very wary of doing that in case I wanted to move schools.

kokeshi123 there's a huge element of an "arms race" of facilities

most allow you to pay in advance - ours will compound your money at 2.5% if you pay a year or more in one go. some will let you forego the annual increases if you pay in advance. but it's a big chunk of money to find! You'd get it back if you left (assuming the school hasn't gone bankrupt)

Moving to popular state schools is tricky outside the main admissions years and/or catchment areas.

We are both working full time in the city on moderate (city) income (we are in mid 30s and still junior) and plan to send my yr5 to private in about couple of years now(if she manages to get any place at any school at all). I have 2 with 5 yrs gap which makes it might be do-able. We will be starting saving from this year, we spent good £8k this summer in nearly 3 weeks South France. I have just cancelled our Xmas skiing( which was £5k last year) when I got my calculation added up and reminded me her coming fees. Which means if she goes to private we wont be able to afford all 3 oversea holidays as of now(summer, winter and spring when we usually bring her back to our home country for a week to see grand parents). Reading your post I am thinking of remortgaging locking 5 yrs rate which was offered to us at 2.99% and prepay for 5 yrs. We might then over pay into our mortgage each year to reduce the debt. That might be the only way we could hedge again the fee increase without a pay rise(which cant be predicted). For us we are paying £9k/yr now for all her activities even she goes to state primary, this I dont expect to drop when she is in secondary. We will be likely paying for the second one too however its ok because there will be no nursery fee by then. My spreadsheet is just getting alittle bit more complexed with scenarios :).
One thing for us that we are happy to pay for her education, there isnt a question about it. We will have to cut holidays, concerts, theatre trips etc...all the entertainment until things get more predictable.

Remember children at private schools still want to do the extra curricular activities though...

Yes I agree with pp that to your child school is just school and they don't necessarily appreciate the cost. They still want to do xyz and will still want to have an iPhone Nike trainers etc.

if you look at all the press around private schools less and less people can now afford them. For example years ago a high street solicitor could probably afford it whereas today that is very unlikely.

We've actually moved our son from his prep school not solely for financial reasons but we just didn't think it was very good!

I felt like I was throwing him to the wolves but so far I have been blown away by his new (state) school. Obviously there's good and bad in both sectors.

Our plan now is to save the money we were spending and buy them somewhere to live which I think is going to be their biggest challenge unfortunately we can't afford to do both.

I agree - those who can afford private school nowadays are very different to when I attended one 30+ years ago.

In fact they're more likely to want to do the expensive after school activities because their school friends are doing them.

I think that it's possible to pay school fees for people with a moderate income (Around 75k - I know this is great riches for many!) if the following conditions are met;

• very low or no mortgage
• careful planning ahead, so savings which mean full fees don't have to come from income
• frugal life style
• one child

Clearly fees vary significantly across areas and types of school. In my example above, if the income comes from 2 adults working, so 2 tax free allowances and a post-tax household income of around £4K I think it would be possible to spend £1k-£1.25k per month on fees.
If the fees start lower than this, but the extra is always put away to help with later years when fees increase it may be doable, but will require salary increases, even if these don't keep up with fee increases.

As far as I know, many years ago fees could be offset against income tax so that made it more affordable for a lot of people.

Figures are 2 years old but school fees for one child from "...2015 to 2028 will set you back an average of £286,000, says the Centre for Economic and Business Research."

I went to a talk recently which suggested that the majority of private school parents had a household income of £150-200k.

Lots of small Prep schools are closing, but there seems to be an increasing demand for the some of the more well-known indie schools.

19% of net

About 10% of post tax income for two DC and day school in London. When they started, however, it was more like 50% of post tax income.

We do expect as they get older it’ll go down. Wish we sat at 10%! These fees are a perpetual worry of mine!

@Bosephine did the % go down over the years due to increasing income?

We have 2 DC and it will be ~30% post tax for both which makes me nervous with the annual fee increases and extras.

@Avidgardner Yes- sadly the fees didn't get cheaper! Our experience has been that fees have risen above the rate of inflation.

@Bosephine lol, I was secretly hoping there was some magical scholarship that arrived part way! I’m the middle of a big debate with OH on what we can/can’t afford and is it really going to be worth it given there is also uni etc to consider!

@verystressedmum

Just out of interest, those who send dc to private school what do you earn? And how much are the school fees?

I am not sure you will get many answers to this.

I can say that ours would be 30% of total net income (24% if you count the extra I earn, which is regular but not guaranteed).

Grandparents currently pay for one set of fees, so really it is 12% of net income but we plan pessimistically.
Neither DH nor I will lose our jobs.

We have insurance to cover loss earnings should ill health stops us working or either of us die. In the case of the latter, the mortgage will also be paid off.

Net joint income is £127k fees £25k

Fees for two are 25% of our income

Currently around £30k on 2 DC, gross income about £150K. But soon to be much more expensive with DS1 off to boarding school in 2 yrs. we are lucky to be able to earn more quite easily doing private work (both doctors) and I own half a flat (jointly inherited with my sibling) which we can sell if either of us needs more capital. I am grateful to be in a privileged financial position.

Suspect you will from 1% upwards in terms of what people spend. Just at our prep there is everyone from the can’t quite afford it to the Uber rich,

None of our local schools offer sibling discount; tends to be the less popular ones I think.

This is really interesting. We’re trying to work out if we can afford it. I earn about 145k gross so that’s about 85k net. I’m in SE with one child so it’d be about £22k a year right now. Sooo around 25%. I have enough in savings that I could pay about half from income but then I’ve got no savings.

I’m really not sure what to do. Maybe move house into catchment of a reasonable school. There is nothing we’d get into on distance if we were applying now. We’d get a random undersubscribed school miles away.