Responsibility of a high mortgage and private school fees

[Iwannabelessfat]

A few months ago I started a new role which I was headhunted for, and for which I received a significant salary increase.

we were planning on moving anyway and so taking into account higher mortgage costs was always on the cards. We have two DC who we are paying for nursery for and we are now considering paying for private education. Whilst my new job means I can pay for the private education, I am worried about the pressure of that and a big house. We can afford it and would still have enough money to enjoy life but I’m worried about the commitments if one of us loses our job etc. is this just a fact of life?

I would make sure that you have savings you are comfortable with and critical illness and life insurance to cover mortgage and fees

DH and I have £300k set aside for the rest of the dc’s private schooling. When we started out paying for private school we had savings in ISAs that were (and still are) for retirement but could have been accessed for mortgage payments and private school fees.

With higher salary and more expensive housing and taking on private school fees it is a lot of pressure but you need to have significant rainy day funds set aside. Job losses do happen; and make sure you have good income protection insurance for illness or disability (as well as life insurance of course).

I would look at the total cost of schooling, from 4 to 18 and Index link this. The older the child, the higher the term cost.

Consider why private over state and if 4 to 18 or primary vs secondary or visa versa is best for you.

We need private primary and state grammar for secondary. With hindsight, I’d have chosen state the whole way. There was no obvious value add that I could see, other than v cute uniforms and small classes. The local state primaries actually seem to have set the children up better for secondary.

Also, consider the additional costs on top of the fees, e.g. trips, music, lunch, uniform and be prepared for private schools to loose charitable status. This will add VAT to the fees.

Losing employment or health is an unknown quantity.

Well it’s all to do with how secure you feel your jobs are and how risk averse you are.

Some people commit to high outgoings and rely on their high earnings continuing. It may all work out fine, but if it doesn’t, then they could end up having to sell the house (maybe at a loss) or move kids into state school (maybe with not much choice of state schools at that point).

Some people aren’t comfortable with that risk and so choose to buy a less expensive property and/or choose state school from the start.

It’s up to you.

Of course some people have back up like wealthy family who can help out if they get into difficulties, which enables them to take more risks.

My husband's health spectacularly failed him (spinal injury). He had eighteen months off work, and is now working in a lower paid job with much much less hours. We started off with state for primary. We have now decided to do state secondary as well. We take each day at a time. I was very glad we've always been cautious with money, and not overstretched ourselves.

Main breadwinner here in senior corporate role. Until about a year ago I never felt uncertain about job security. Now I do, and it’s honestly very stressful.

DH earns 1/10th of what I do, and whilst it’s been great to progress in my career and earn more etc, I’m very conscious of there being way way way fewer opportunities the more senior I become. And whilst we’re not super well off we are comfortable and the minimum needed to sustain our basic lifestyle is still quite high.

So before you take on additional long-term commitments I think you need, or at least my advice would be, to look at the bigger picture. Eg… How secure is your income? Can you walk into another similarly-well-paid role easily if you lost this one? What assets do you have to fall back on if you lose your job and it takes a while to find a new one? What kind of cutbacks would you need to make? I guess it’s about ensuring there’s enough flex in your lifestyle and financial situation to be able to weather a storm.

IMVHO it’s all very well having bigger aspirations on your way up, but when you get there, what happens next? In our case, our life is dependent on my job. Quite frankly if I lose it, we are screwed.

We are in the same boat in that I am the main breadwinner (earn about 8x what DH does) so everything is basically reliant on me. We have no family support. I’d feel comfortable stretching for either the house or the private education but not both.

At the moment we are doing neither with a view to saving and then either moving to a bigger house/better catchment for when DC1 starts secondary (year 1 atm) or paying for private education and staying in this house.

Primary private is a waste. Do the house move and then start building good savings. You can reassess once they’re closer to secondary: live well within your means; don’t be a slave to your job. No one dies wishing they worked more; no big house is worth that.

Some good points here thank you.

I think as someone said it’s both that is putting a lot of pressure. The thinking behind private primary is we really want DC to get a place at grammar secondary, so want to try and invest in that as much as possible. Although I know there are no guarantees and the local state primary has outstanding results.

Maybe local primary and top up with tutoring sessions, musics etc.

If it’s a competitive area for grammars you will find that everyone aiming for grammar is doing extra work outside school - even the ones at private primary.

IMO if you have a bright enough child then decent state primary plus some extra work outside school (eg grammar prep classes, tutor, Atom learning or just lots of parental help) is enough. If they wouldn’t get in with that kind of set up, I suspect they wouldn’t get in from a private either.

Plus, around here at least, the private primaries are focused on private secondary entrance which happens several months after the grammar exams - so you might find you have to do your own prep for grammar entrance anyway. May be different where you are though.

TL:DR - I wouldn’t choose private primary for the sake of getting into grammar.

There is no guarantee a child, any child will pass the 11+. This is another thread, but it’s largely down to tutoring. My son did pass. Many of his friends didn’t. They were within points of each other. My son just over the magic 121. Just. His best friend just under. His parents immediately regretted paying fees. 🤷‍♀️

Until recently my friend taught at a private primary in a grammar area. She has said its a waste of money and state primary is better. If you have access to an outstanding state I would suggest doing that and having money to do tutoring if needed or extra curricular activities. Or save for private secondary if they don't pass 11+.

We have a large mortgage and are paying for private primary school fees out of income. But we have enough assets that we could sell if we needed to, that would cover school fees. So it didn't feel like a risk. We can cover costs on one income as well if needed.

If we were less secure financially then I'd reconsider private school. Personally I think that academic difference between the excellent state schools in affluent areas and private is marginal and it can often make more sense to be very targeted in moving near a top school than paying for school fees (where we are in London, it would have to mean moving to the same street for the most sought-after schools, and might mean moving twice to get a place and then moving again for a bigger property). Going private meant we had more freedom to choose where we live rather than having it dictated by school distances. And I do think it offers more than a state primary, but the extras are a nice luxury.

I wouldn't want to be relying on a grammar school place. No guarantee of a place and likelihood of getting one isn't correlated to the amount of money/time spent prepping. If you are planning to move anyway, the top comps would get you the same results with more peace of mind, as long as distance is the main criteria and you moved within a few streets.

I absolutely wouldn't start a child in private unless I was guaranteed to be able to see them through. You've seen the Inbetweeners, think of poor Will.

Does your school not let you pay the fees in advance in return for a discount? Ours gives 4%.

I recommend this approach. Much more flexible.

@HolidayHappy123 yes they will, we haven’t paid yet as dc2 isn’t in seniors yet so we don’t know which one, and dc1 may switch for sixth form so we’ve only paid up to the end of yr 11

OP I just saw you’re looking at grammar for secondary. In that case I’d not bother with private : grammar isn’t interested in extracurriculars, just the exam results. And my dc private prep schools didn’t teach to the grammar tests, they prepped for the private secondaries. You’d be better off spending the money on private tutors (and saving for private secondary if grammar place doesn’t materialise)

I think a good education is worth its weight in gold, but I don't know if I would extend both with the house and in the education. Could you make compromises on the housing situation and limit the mortgage increase? Perhaps not have any surplus rooms?

IIWY I would:

Go for the house you want
Stay state for primary, especially if you have a good local option, which is seems you do; unless you're going for a really expensive private school and need to consider common entrance, in which case you might need to go private sooner to a prep school that goes to age 13
Tutor for the 11+ and if you get into the grammar go for that
Keep savings aside
Plan for private school fees to go up by 20% if Labour get in and put VAT on fees

We paid for private but just for secondary, it honestly wouldn't have been worth it for primary and we had good local state primaries. Good luck.

@kaenert a very measured and sensible post. Thank you.

It's hard going from private to state. You tend to stand out like a sore thumb and can lead to terrible bullying.

Depends on the amounts and your other financial commitments. We earn £160k joint and pay 3k a month total on mortgage + fees. The rest after bills is saved or invested.

@Iwannabelessfat how much would the mortgage and 2 children's school fees be as a percentage of your current take home?

We are in exactly the same position as you. We are supposed to be exchanging on a very expensive house soon but they are making so many cuts at work that I'm getting really anxious. We don't have any outstanding state schools in our catchment so are relying on private. I absolutely love the house but getting nervous.

We do have a lot of savings but ultimately this is our pension pot and if we dwindle these down to pay for school fees and mortgage we will have nothing left at the end of it 😨