School fees - How do you do yours?

[dependsreally]

Do you save in a particular account, so the fees are always there, or pay as you go, or are there other ways of putting the money by?

Just starting down the road and have 2 years to get the money together to start with all this, so looking for experience in how to go about it.

TIA

We pay termly. We just have the money in our normal savings account (part of our normal savings) and pay it as and when it is due.

Termly for DD as Hulababy describes, and then monthly on DirDeb for DS from current account.

Different schools, different processes.

Not sure I would ever want to pay years and years up front though, you never know if you might need the money for something.

ours would be termly too. Was wondering if there was some account you may use to get the best return, hence saving a smidgen here and there!

We pay termly, but are considering going on to monthly direct debit - the termly fee seems so huge when it goes in a lump sum, and as we'll have two fees from next year the monthly option may soften the blow!
You can take out insurance to pay for your fees incase of ill health etc. Your school will have info on this or you could shop around.

we pay termly
you can pay monthly at our school but this incurs a premium

yes verity - ds will start next september, so looking to put some money by in advance so there is a cushion and then add to it. It is also for secondary i.e from 11.

I don't but I have a friend who pays 800 pounds a month per child and has two so 1600 a month still souds like a huge hit to me but then we couldn't afford that in a billion years.

Yes, the tax thingy was what dh was talking about. He said he doesn't want it to go in his own name because of the tax. So do you open the account in the childs name this way? Then just put a direct debit from your account into that each month? Is there a good one you could recommend?

There's a limit though, isn't there, as to how much a parent can pay into a child's account in one year? The taxman is wise to parents putting ££ in kids' names - it doesn't matter if it's grandparents or other relatives, just parents.

Sorry, I got my facts muddled - there's no limit to the money you can give, but if the interest adds up to over £100 per year then it will be taxed as though it were yours. There's some info about it here.

I guess you'd have to have a pretty big pot (around £10000) to get interest of over £100 if you are in a standard savings account at the moment with interest rates at about 1%, but if interest rates go up and you are planning to save a couple of years' worth of fees, say £20,000, you need to watch it. Once the £100 limit is breached, you pay tax at whatever your rate is on the whole lot unless you can prove the money came from granny or someone other than the parent.

To answer the OP - we also pay termly, and have 3 dcs at independent school. We use an ISA to save ahead to certain extent, but when the bill comes in, there is also a good deal of nail-biting and robbing Peter to pay Paul!

direct debit for ds - there's no extra charge for it and it's just easier to spread it around

however when dd starts in September we'll pay termly from mortgage overpayment account (we put money by every month) as the instalments scheme for her school is very expensive

We pay over 10 months with the other two months being used to pay school extras. Works well and we get a very small discount for doing it by direct debit.

Each of the 10 months by cheque. We wanted to do direct debit but they said don't worry about that (we used the nursery so they know us well).

We pay monthly by DD. Veritytb can I ask - how will you get the money out of the account to pay the fees when you need them? (ie. if it is an account in her name?) We were told not to put school fees in an account in our DDs name for this reason???

Before ours started school we made big overpayments on our mortgage and got it down as low as we could - this seemed a more cost effective way of "saving" than a savings account. The extra money we've saved goes partly on two sets of school fees, and the rest into an offset mortgage account, which has a tax advantage for us.

The dcs do have savings accounts in their names - we can access these easily, but would only use as an emergency fund. Interest on them is pretty poor.

It all depends on the relative interest rates that you are paying on your mortgage + whether both of you work and which tax band you are in. Also how old your children, if you children are little then shares for secondary school fees makes sense.

We have an interest rate on our mortgage below 1% (amazing I know) plus I am not working so its makes sense for us to save not pay down the mortgage.

There is no right way to save it depends on your circumstances. There are lots of good deals on regular savings - Barclays 4% for adults (max £250 per month), Halifex 6% for children (max you can put in is £100 per month though for each child). Look up moneysavingexpert.com

We are investing the max in share ISAs each for secondary and using fixed rate bonds, mortgage, savings depending on the rates for prep.

thanks all, lots of interesting replies to digest and find the best way forward. As usual with us, we should have thought about all this years ago! ho hum .

The current school accepts them monthly via direct debit, the school he's hoping to attend in September monthly at the start of each term.

wilbur - was reading your link, and came to the bit about parents not being able to give more than a certain amount but that grandp's could give any amount, and thought, that is ok, will pass the money via my parents until i read further down that you must not give to your parents to give to the grands as it can be traced!

Oh well, seemed like a good idea at the time!

Worth asking about fees composition. We paid three years upfront and so not affected by the increases.