Advice sought re. school bursaries and property

[AssetRichIncomePoor]

Our children are currently at prep school, which is just about affordable as one has an 80 percent choral scholarship. In due course, they will move on to private secondaries - whereupon the fees go up so much that we can't afford them. We are hoping that DC1 will get another scholarship - but that is likely to be worth only five percent of the fees, which leaves us with a mere 95 percent of around 5k per term to pay.

Our gross income is around 40-50K (most of it from holiday lets), so we would in theory qualify for a bursary on top of any scholarship.

However, we own property: two holiday lets, one rental property (with a mortgage) and our own house (with a mortgage), so fear this will exclude us from bursaries. In total, we probably have 550K of our actual money invested in property. If we did sell all our property, that would enable us to pay some fees (though not for long, as DS is wanting to board). However, it would leave us with no income and no pension.

Does anyone have any idea how we can get round this problem? Any advice would be most gratefully received.

we got a bursary for dss while:

dh earned a good wage (highest rate of tax, substantially more than 40k)
we "owned" 2 properties (they were mortgaged)
had new-ish cars
and lots of other htings that people have said disqualify you.

it was not a huge bursary, mind you, but that, together with re-structuring the fees, was enough to keep dss at his school.

but I think that was the difference - he had already been at teh school for a couple fo years. we woudl have had to take him out for 6th form. dh spoke to the school, they had a htink, and after exhaustive forms (yes, they really do want to know eg value of jewellery and electronics in the house, as well as more standard investmet stuff etc) a plan was formed to keep him there.

we had a flat in london, which was let out, and our house, which we had just finished substantial building works on (in order to be able to live in it, not luxury stuff). BUT crucuially both were mortgaged to the hilt already (well, we had about 50k equity in the flat, but once Capital Gains had been paid etc we woud not have had enough to pay the school fees - this was why it was discounted as an asset for us, I think (the rent we got from it paid it's own mortgage at that point, and nothing else)

it can be done, but the school needs to want your ds, iyswim. dss' school wanted to keep him (and, once you are in a school, they will try their hardest to keep you there) - this might be an option for oyu? but I am not sure I could deliberately put a child into a school knowing I did not have the means to keep him there, and hoping against hope that the school came good.

According to the Harrow website, all scholarships (except the Peter Beckwith) are normally worth 5% - with eventual aim of reducing to 0%, but scholars can be considered for means-tested bursaries (which can go up to 100%). They reduce the value of bursaries if parents do not realise capital assets.

Stowe website says its maximum scholarship is 25% (though a pupil may hold more than one award). Means tested bursaries are available to a higher %age.

Silverfrog, that is all very interesting. Your building works sound rather like ours - making the house fit for habitation, rather than adding a lifestyle kitchen and conservatory. As I say, we will be fine with jewellery/electronic equipment and so on. I possess one piece of jewellery, which is my wedding ring. It cost £25.

Coconutty, DH and I were gripped by that Harrow programme!! Thanks for the good wishes.

Meditrina - all grist to the proverbial mill. Thank you.

Why don't you call one of the specialist financial advisors for school fees? They have some really astonishing legal ways of getting fees paid, eg through tax-efficient schemes, remortgaging and using pensions to get lump sums etc.

They always say in the articles I have read (mostly in the Telegraph) that the sooner you call, the easier it is to work out an appropriate solution. Most parents only call when they've realised that they're in the deep end and floundering.

The case studies (which of course are always the successful ones!) usually seem to manage to give the parents a decent pension at retirement while paying both the fees and any mortgages off.

Excellent idea, moonbells. Thank you.