Planning and saving for school fees

[Heatherbell1978]

For various reasons we're seriously contemplating private school for DS1 (P4 now) with a view to him starting for P6 or P7 and then DD following in a few years time, ideally for S1. That would give us 5 years of one child fees before having to consider two lots together.

We're in Scotland so I'm talking annual fees around £13k rather then some of the London ones I see quoted on here!

We know we can afford one child fairly comfortably - we're not 'wealthy' but would be able to pay fees for one as well as have an annual holiday and a bit of contingency for things.

But we need to plan ahead for DD and I'm interested to hear how people did that if you're in a similar point. I've worked out we could save a bit of a pot and then potentially take a bit of equity out the house to give us a pot to drawdown every month. DD would start in 2029 fir context.

And yes I know state schools exist. My catchment one is performing awfully just now and DS is behind as a result of Covid so just thinking about what's best for him.

How many years of double fees would you have. As a minimum it’s recommended to have a few years of school fees saved in case of a change of circumstances you can get through any critical periods without moving them (like exam years) until it’s easier. I’d say as a minimum use the next few years to save the full amount of fees you’ll be paying in future so you get used to it and then you’ll have a few years to at least cover the double fees when it happens. Do budget for labour adding VAT and above inflation annual increases as well.

The trouble with private education, it’s not just the fees you have to consider, the uniforms are vast and expensive and the school trips/holidays that are offered are very expensive too. Would you consider getting a tutor to give extra lessons. You certainly don’t want to be taking out equity in your home unless you are moving.

Taking equity out of your home sounds like a fairly mad and inadvisable idea.....possibly indication that this isn't something you can comfortably afford?

There are financial advisors who specialise in school fee planning - probably worth seeking one of them out and getting proper advice.

FWIW, my siblings and I were all sent to private schools when my parents couldn't really afford it. Imo it was the wrong decision as we had v few holidays, secondhand everything and were very aware of being the poor ones. I would have much preferred to have family experiences like holidays and days out, and a helping hand with a house deposit etc. We are all still friends with people we grew up with who went to the local schools and did fine If you're taking equity out of your own house, are you going to be unable to help with driving lessons/uni/house deposit? Those were all things that really held me back as an older teen and I wished my dp had prioritised those.

You have to bear in mind that the fees will go up every year as will the cost of uniforms and trips. I would suggest that you would be better off sending DC to State school and enriching their experience - tutors if needed, music lessons, trips, holidays . If your DS is behind, as you say. He might not get into a good private school. Bear in mind that Your local school can only improve.

You have 2 years with no school fees ahead (if I understand correctly?) and can easily afford one set of fees, so start by putting those two years aside in a high interest account. How many additional years would you have to save for with 2 sets of fees? If you think one is ‘comfortable’ that implies there is room to tighten a little without becoming‘uncomfortable’ - what does that look like?

personally I would prefer to save a little over a long time, and hopefully have a few pay rises along the way, than struggle / face really difficult choices. Personally I would not touch home equity unless it was a really small proportion of equity accrued, and I knew I could pay it back in 5 years (So to deal with short term cash flow)

I've only got one child but have a lower income than you.

It began to emerge around y3/4 primary that a fee paying school would be necessary by y7. We started by putting approx 2/3rds of the expected fees into an ordinary isa account and gradually built up the savings level by redirecting every pay rise into savings and gradually tightening our belts. Once y7 came around we were able to pay about 80% of the fees from income and 20% from savings, and the savings pot will be depleted to nothing by the end of school.

We just used an ordinary savings account with a marginally higher interest rate and a withdrawal limit of maximum 3 times a year with 60 days notice. if I was starting now, given what interest rates are doing I would consider using an offset mortgage as a vehicle for the savings so that the pot of money waying around to help with fees in 10 years time would be doing some good in the meantime.

Thanks all. We would have around 2 years before DS starts school so we could save the first 2 years of fees before he starts as a buffer then we can afford fees out of income. We could also continue to save while paying his fees out of income with contingency in there for other extras.

The mortgage release would only be in an emergency and I'm talking about taking out no more than £50k against a house worth £500k with a mortgage of £150k so it's not quite as drastic as it sounds!

Probably need to speak to a financial planner and see if they had any suggestions.

And we'd have 3 years of them both at school together.

Out of interest what are you basing your comment around local school only improving on? I wouldn't hesitate to send DC there if I thought that would be the case but I'm assuming with Covid impacts on children and general funding challenges that there's no guarantee? The gulf between our local schools and others in the area seems to be widening too. It'll be interesting to see what the next couple of years holds.

Have a look at your traget school. in our case, uniform for private is actually cheaper than the one for the decent state schools (who use uniform costs to filter out parents they don’t want), and all kids wear second hand anyway which reduces costs further.
Trips, food and some before/after school care is inclusive, so is some instrument, drama and sports tuition. So is substantial extra tuition for our SENDs child (state schools offer 15 minutes per week…. he needs 5 hours plus). It all sums up, in our case it reduces the “actual costs”, i.e. what we pay additional to a state school by about £1000 per term. Still a massive cost, but not quite as bad anymore.
We had originally planned on state schools, but we then realised that we can’t afford a good state school. Houses in catchment of any remotely decent school are 1 million plus (SW england), and we can’t afford that. Private is much cheaper than good state schools unfortunately .

Thanks - there are 2 schools I'm looking at with similar fees and ethos. DS is very sporty and all the sports he'd be interested in are inclusive so that's helps - at the moment we spend a fair amount on things like that! We also spend around £300 a month now on breakfast and after school clubs for DC but given DS would get the school bus (collect 7.30/ drop 4.30) that will half the costs too. So despite the fees (c£1000 per month for 1) there are definitely 'savings' that would reduce that.

Definitely factor in fee increases, we're at a Glasgow private school and the fees are going up 8.5% next year

We have also looked at moving into the catchment of 'a good school'. Where I am you're talking £600k-£700k for a 4 bed with no frills. Crunching all the numbers it's actually cheaper for us to send DC to private school (£200k in fees total), not to mention the fact we don't want to move! We've invested a lot in our house and have an LTV of around 40% so room to take out equity. Stamp duty and fees to move house are alone around equivalent of what I'd remade equity wise!

Gulp! I have factored in around 5% a year and no salary increases for us in that time but I think I need to stress test a bit more...

It won’t be just £200k, extras at school, music lessons, trips and uniform.

Then please consider rises in fees. I’ll find a good spreadsheet for you.

Thank you! Yes I have a contingency for 'extras' in my budget - £200k is fees alone.

We saved up 2 years fees before she started as a buffer and then put some additional lump sums into investment ISAs for Yrs 12 + 13 if she decides she wants to stay on for 6th form.
At DDs school lunches and books/stationary are included so the exreas are: transport, uniform + trips. Uniform you can get 2nd hand but it cost 1K to start in Yr7 but buy larger sizes so you don't have to replace as often .

@Heatherbell1978 we are in the same situation- private school for 2 kids is cheaper than a good private (i.e. a school who's results are slightly above national average, not way below). And for SENDs kids, its often the choice between private school, and giving up completely on them. Its incredibly unfair, but unfortunately true.

Edit: private is cheaper than good state school!

https://www.candidmoney.com/calculators/school-fees-affordability-calculator

here you go!

You will be fine if you start saving now. And 5% annual increase is probably about right. This year’s increase has been significantly higher due to general rises in cost of food, energy, everything.

Our fees increased 6.5% last year. Not sure what it’ll be this year

This was way off for me (as in under estimated), as doesn’t factor in differences in junior, senior and sixth form fees. Maybe okay if you are just planning for 3-4 years

@Heatherbell1978 we have just had notification of fee rise for 2023/24 and it is has gone up 1.5K ie just under 10%. I think you should budget for 10% rise each year in current economic climate and many schools froze fees during Covid so need to recoup now.

I wonder if there's a way to find out if the schools I'm looking at froze/stopped their fees or not as that presumably will make a difference going forward. I'm talking Edinburgh if anyone here has any insight on fee rises over recent years!