How do people afford private school?

[PopGoesTheWeaselYetAgain]

Following on from discussion House of Commons today, how do people afford private school fees? Is it by sacrificing holidays and other luxuries? That wouldn't by you a year, but did she perhaps mean a term? How do you pay for the other two terms?

I'd appreciate it if posters refrained from speculation. I'm interested in people's actual financial circumstances and decisions.

It depends. Clearly anyone paying for it from income is a relatively high earner unless it’s help from grandparents / inheritance.

However the things that people typically sacrifice are:

1. they live in relatively smaller houses than they could otherwise afford.
2. no foreign holidays
3. no car / very old car

Re Military families...
The Government only pays a portion of BOARDING fees in very specific circumstances. The Serving parent had to be anticipated to move within 3 years, their spouse can't live elsewhere (unless also serving and posted elsewhere) there's a maximum payment etc. Its not all military families... we don't qualify as I don't live with DH on base anymore for example.

However lots of schools offer Military discounts which have nothing to do with the Government!

Most of my female colleagues in top position pay for private school fees. They work 12-16 hour days, pay huge amounts of taxes (45%) and earn large salaries. They use private schools because the kids can do academic education there, as well as sports, music, drama - basically all the clubs I ship DCs to after school/at the weekend, because I work part time. They also send their DCs on numerous school trips so they can keep working and some even go to boarding school - typically Year 9 onwards. The taxman benefits hugely from my colleagues already. Notably, those now turning 40 don’t live in huge mansions, they live in small London houses. The private schools enable them to do the high flying jobs they do. This is London for you though, might be different elsewhere.
There is also a category of friends I have from South East Asia (India, China, Singapore etc) who also work part time, typically have just 1 child and forego holidays and luxuries to spend on education. Because that is their cultural norm.

I think you have to make a distinction between type of independent . Local ex grammar /direct grant will be completely different from the big ‘public schools ‘ such as Eton, Rugby , Uppingham etc .

We did it like many of our friends , dh salary supported the family and mine went 100% on school fees , or the other way around depending on family set up. One dc also had a small academic scholarship. I’m not sure that would be achievable now given the cost of living rises but that how we did it.

Dc friends’ parents are largely local business people, dentists, doctors , farmers, and surveyors and the biggest group ( you are not going to like this ) are teachers. Either with at least one of the parents teaching at the school to get the discount or with a higher earning spouse/partner. There are a few who commute into the city but not really hedge fund types more actuaries and accountants and marketing people.

I would definitely have more children if the State was paying for it!

@Araminta1003 you could be describing me 😂

Very much I need kids to be learning instruments, swimming, sports etc at school as the weekends are the only time i see them so i want to spend that time together and we go away a lot too so can’t commit to clubs.

It makes sense. We could afford to send one. Two would be a huge stretch.
I went to private school but my parents were quite clear it was only because there was only one of me.
However I'm not sure it necessarily correlates that these families only intended to ever have one child.

I should add that the consultation is almost certainly a box-ticking exercise so that they can say “well, you didn’t want to lose anything, so we will regrettably need to keep charging the same plus VAT.” But my point stands that, in theory, this doesn’t necessarily mean that the total payable will automatically go up to the current amount plus VAT.

Some people are super wealthy and can afford the more prestigious private schools. You then have the not so prestigious independents and here, parents are more likely to be sacrificing their lifestyle to send their kids there. It baffles me that people go without and live a pretty basic and miserable life just for their children to go to a private school. I'm sure most children would prefer more family time, holidays and luxuries and go to a state school.

Correct. It’s a collateral benefit to having an only, unlikely to have been the reason for having an only.

However it probably does correlate a bit more when people say they stopped at 2 rather than having a third.

As I said, in my DS’ school there are lots of 3 kid families. He is only 6 so some kids in his class are only just now gaining their second sibling. It really marks out the super-wealthy ones!

@KingsHeath53 - it is interesting, isn’t it.

I made the choice 10 years ago to not go for partnership but have 4 DCs instead, move to the suburbs to a big house, work part time (60-80%), send DCs to state school. Now with working from home, the part time option is even better as I can drop and pick up youngest DC and really input into her education as well as her sports/music etc. It just takes a bit of time every day.
Had I gone for the partnership and stuck at 2 kids and private school, HMRC would have made millions out of me over the years.
Fact of the matter is for many women and families private education is childcare. Take that away from them and their productivity will lower. Given where we are on productivity in this country at the moment, it may not be the best move. As well as killing a whole sector that we are internationally famous for at the moment.
On the other hand, as a state school parent I would really like to see more investment in buildings, facilities and teachers and class sizes lowered. Personally, I would also prefer selective education like they have in much of Europe. However, again many people here seem to hate grammar schools.

I don't want to derail the original question but can someone clarify the 20% VAT - I see a lot of people suggesting fees will go up 20% as a result of this - presumably the way it will is that schools would increase their fees by a 'normal' annual amount - say 5% - so £10k becomes £10,500 and then the 20% is added so that is then £12,600. The following year, the next 5% rise is added to the £10,500 which becomes £11,025 and then add VAT, to £13,230?
I see a lot of people suggesting fees will go up an additional, say, 25% year on year which is quite different so £10,000 becomes £12,500 which then becomes £15,625 and so on and so forth.

Probably obvious but just wanted some fact checking!

I think we're talking between £3000 and £4000 in VAT added each year, depending on the school. For families with more than one child, that could be an extra £6000 to £8000 they've got to find in their yearly budget. Does that clarify things?

@Heatherbell1978 - yes schools will increase by whatever amount they have to yearly and the VAT will be charged on top of that, at whatever rate VAT legislation states. They might start off with 5/10 or 20 per cent. In all likelihood, it will take a few years to implement and the top private schools will hire specialist accountants so they can set off input VAT. So let’s say they are building a sports centre and builders have to charge VAT on labour and supplies etc. the schools will offset that. The richer the school, the better they will be able to manage it. So the wealthy parents will be fine and so will the rich schools - they will manage their ongoing investment accordingly. Many will give up charitable status voluntarily too so less pools for state schools etc.

More people will just be priced out of private education and people will stop sending their DCs in the first place. Which is already happening due to COL and high mortgage rates and huge housing costs and school fees going up too much anyway. So it will be a double whammy. Because birth rates are dropping anyway, some people say there are plenty of state school places in the younger years anyway (but it really varies across the country).

Some of my younger colleagues are already moving to Dubai, Singapore, back to Germany etc because for the high (on paper) young earner who puts in 12 plus hours a day in London right now, other countries appear to be offering a better prospect of quality of life for them and their future DCs. So they are leaving in droves and we are finding it difficult to hire which translates to less productivity and less cash to the taxman and public services.

I think its cos there is a private school section on Mumsnet and I guess if you are paying out so much money you would want to do some research in addition to speaking to people IRL. I guess those people also wade onto other forums.

I teach in a private school, so get 50% discount. One of our DC is now at uni, and one is going into sixth form. Our combined salary is around 120k (pre-tax etc). We don't lead a "luxurious" lifestyle but aren't struggling either.

(I know this isn't the question, but paying uni fees/top-ups to loans are another really big question and one which people sometimes don't start to plan for until too late!)

We went without holidays, ran cars into the ground, budgeted accordingly, stopped buying the nicer things in life, essentially went to a minimalist lifestyle, focussing on experiences not stuff.

when I had to change from a 6 figure job to nothing for a few months, we used some equity from the house during a re-fixing.

both parents were products of state (gladiator) school systems and wanted what we could afford for our academic youngest.

it paid off…. Class sizes were sometimes 4 students to a teacher - and School didn’t miss a beat due to Covid, when lockdowns started, no classes were missed and she continued from home the morning after her last classroom lesson. She achieved well, is heading to uni, plans to go all the way and do a phd.

Elder sister despised school and we now understand, was simply ahead of the curve in what they were teaching, remonstrating and ideologically programming them to be sheep and conformance. she rejected it all very young, despite their attempts to bully her into submission and we now understand how we didn’t support her as well as we could have. I recall at age 11 she turned to me and as part of a discussion about secondary school, explained very calmly and coherently, that they were being trained to conform as sheep, by sheepdogs and she was curious as to who the wolves really were. I rejected it at the time, thinking blooming teenagers and what now…. How right she turned out to be, But She would not entertain private school at all, whereas the youngest was at home in ‘hogwarts’ as she called it, being a people pleaser and simply couldn’t get enough of it, choosing to board with her friends on occassion too, which gave us some adult time. Win win.

Ultimately, private school, it was a cash flow issue for us, between us we will leave a 7 or 8 digit inheritance to her and her elder sister but that money wasn’t readily available to us at the time - so we skimped, never upsized or overstretched - then borrowed against the house for the final 2 years fees, and when the fixed rate term ends in May, we will clear the mortgage. We simply saw that the youngest would thrive with that investment and brought forward some of her inheritance. We will do similar with some of the Uni fees too, to prevent it being a millstone around her neck for the rest of her life. Between us we still only earn about £80k these days because I’m only working a few days a week now, but without access to our prior wealth uni would be almost unaffordable, and I can’t see how people are going to live with the debt mountain that’s about to be created by uni fees etc in its newest form, it will never be cleared, so we will offset the non tuition aspect as she goes through the first few years, so she only has the tuition debt.

The eldest, will be balanced out in other ways financially.

(I should add that I'm Oop North so full fees are £15k.)

Thanks yes that's helpful. It's a huge amount in any case but I do see a lot of flippant remarks when someone says they're budgeting a 5% annual increase and lots saying 'that'll be 20%' It won't be a 20% year on year increase.

Lots of doctors & lawyers make 20k a month...easy to afford a school if it's just 1-2 months salary out of a whole year. A 20% raise won't make any impact as they still have a solid 9 months salary to live on.

Many international organisations (eg United Nations) pay nearly 100% of their employee's children's private education & university fees. In some international schools, 80% of children are subsidised and only 20% of parents pay out of pocket.

Working as a teacher at a private school also entitles your children to free or heavily discounted tuition.

@User3253625 I don't know any doctors on £240k but agree with rest of your point

Many will give up charitable status voluntarily too so less pools for state schools etc.

VAT has nothing to do with charitable status .

Schools do not charge VAT on fees because education is an exempt supply. Many independent schools are not charities , many are also registered for VAT they do not charge VAT because just like nurseries and universities they do not make a chargeable supply. If they make education a chargeable supply that will apply to anyone supplying education so they will need to create exemptions . VAT is also a tax on the end user, independent schools cannot reclaim VAT suffered currently but once they are making chargeable supplies they will be .

That is a good point about doctors paying school fees in UK.. pushing them further into private work, yet again, less doctors on the NHS for the rest of us. These hate policies are so dumb!

Your last sentence I believe has been mentioned as to the reason why there will not be such a tax windfall that the labour party suggest they will get. I think there was an interview with KS on radio 4 a few weeks ago and he was asked about this issue and he just repeated that everything had been 'costed out' but refused to answer the question. I only turned on the radio half way through the convo though so am fuzzy on it.

“Many will give up charitable status voluntarily too so less pools for state schools etc.

VAT has nothing to do with charitable status .”

Yes I know that, on paper one has nothing to do with the other. However, in reality, once they have to charge VAT due to the redrafting of the VAT legislation (which will have to be done carefully to only catch 4-18 year old private education and exempt e.g. SEN specialist schools) - many will take that as an excuse to become all out businesses with profit making in mind. So if they can easily give up charitable status, of course they are going to do it.