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?

Evidence?

@threefiftysix combined it would be around 45% of our take home. The mortgage being about 27% of that. I think because we are paying for childcare at the moment anyway and it still feels comfortable it makes it feel doable.

Our savings would keep us afloat for around 6 months if one of us lost our job. Plus I do have family I could fall back on in the worst case scenario.

We are also contemplating private school for our DC. I want to have a minimum of 1 years tuition in addition to the standard 6 months expenses before she starts. I don’t want to send her if we’d have to stop or reduce the contributions towards pensions we’re currently making (20% of pre tax income currently). Our current childcare is just a little less than private school and our mortgage plus school would be 50% of our current income, but after 20% retirement contributions, healthcare and taxes. It will be less than 30% pre tax. We also have family with very deep pockets who would bail us out, but I don’t feel comfortable being on the hook for any more.

It's all anecdotal but seen in the school I went to and from 2 friends I have as adults who it happened to.
I went to a large comprehensive in Oxford where we had quite a few kids switch in from private school. Fine at 6 form but in the years before it was a social suicide. It might be worse in Oxford where town and gown/ posh v not is strong. And being seen as posh at my school was a big insult.
Interestingly I have a couple of privately educated friends as adults who say the same thing. One from Eton who works in my industry and says he is conscious of people not judging him.

I would send to a good state primary and tutor from the end of year 4 for the grammar tests. Are you in an area where the top 25% get in like Bucks/Kent or are you super selective?

When I asked high flying DiL if she had enough money to cover three lots of private school fees 4-18 she looked at me as if I was stupid. But replied that she had. She couldn’t imagine not being in the high earning profession she was in. A few years later her career fell apart (not her fault) and I felt thoroughly vindicated and not so stupid. The trouble with private school fees is they are always going up and there are always extras. We know because our DS went to one. In 7 years the fees doubled. Our salaries didn’t.

I have 4 DC all privately educated from 3, two now at uni.

MN is full of threads about how you must only ever contemplate private schooling if you have the entirety of the fees squirrelled away, but IME that is both highly unusual and unrealistic.

when the eldest first started I was paying out of salary and had your worries. If I’d lost my job and stayed out of work, then the long term payment of fees would have been almost impossible. But I took the view that it was unlikely and years later it turns out I didn’t lost my job and our financial position changed.

that’s not to say there is not some stress about being responsible for significant financial decisions, but generally i have a pretty positive outlook and just decided that we’d go with what worked in the here and now and if worst came to worst we’d cross the bridge when we came to it.

It could well be area related. Sixth form isn't a problem as so many use state 6 forms (once all the riff raff go my friends mother famously said to us 😁)

Your position (from an anxiety perspective) is similar to my current one. I do laugh when people come on these threads to say you have to have £300k sitting in an account or else you shouldn't bother with private. In reality no one has that and is taking some kind of risk.

We earn £160k joint - bonus and shares potentially adding another £10-15k. DS is starting this year at upper primary (age 10 when he starts) and DD will start for secondary 5 years later at age 12.

For the next 5 years our mortgage and fees together will be around £3k per month. Gives us enough headroom to save, pension and some not flashy holidays. Then we'll have 3 years of double fees which will be a stretch but we do have savings for that (mix of house equity from remortgage and savings).

Redundancy for either of us will be a challenge but on the flip side we're both paid quite low for what we do so opportunity for increasing salaries seems good. I'm very risk averse so it's hard for me to do this but I'm also very good with money and we're not flashy people at all.

I think there's an element of checking on your lifestyle. So many people come on these threads to say you need to be earning huge amounts to do private but those same people likely have a very expensive lifestyle which they don't want to compromise on.

I totally agree with PP who say you really don't need to have £300k put away to go for a private school. We paid all our ours x 2 out of earnings. AND had an expensive house.

@Wanna17 DC is in state comprehensive. Everyone is from one of the handful of state schools in the area. I know all the kids change friendship groups etc. But sometimes, being different just makes it harder to fit in. There are a lot less kids going from private primaries to state secondaries.

@Longma A lot more here go from private secondary to state 6th form. Rightly or wrongly, many parents I heard think it's good for university application to have come from a state 6th form college. It's known to have quite a lot of posh kids according to DC.

I think psychologically draining stretching yourself that mich, especially as your already worrying. I'd try to save a £250k rainy day fund as a minimum.

Disagree with previous posters, too many people rely on their incomes to fund their lifestyles, particularly private education. The goal should be to acquire a decent pot of money and use the annual investment return to fund private education (or at least partly fund). That way life's less stressful.

A £250k rainy day fund? Classic MN😂

I did exactly what you’re doing OP, without a £250k rainy day fund lol, all out of income. It was a risky strategy for sure, and stressful, but I just got my head down and worked hard, budgeted v carefully and hoped for the best! Nothing ventured and all that…

What those parents completely forget is that the University application will show GCSE grades and where they were sat. So there is no way to hide that the person has been at an independent school up until sixth form.

My DC are now privately educated. They started in state and we didn’t send them private until we had built up a decent buffer, and we decided not to make a move to a more expensive property to prioritise that.

I’ve had colleagues who have been paying for fees out of current income without much savings and they often say it is stressful living like that. It also reduces your optionality - you can’t decide you hate your job and leave or downscale to a lower paid job as on a treadmill. Also bear in mind private schools typically require a term’s notice to withdraw them - if you will run out of savings within 6 months of one of you losing a job then you’re going to have to make quick decisions following a redundancy as to whether to give notice.

Also look careful at leaver destinations of proposed Indy primaries. If you’re in an area where parents do private primary and then state grammar (common in parts of Bucks and Kent for example) they will be focussed on those outcomes. Other places they will be focussed only on private secondaries. I certainly wouldn’t advise an all through school as they will not teach to a state 11+ and it is actively against their interests to facilitate your kids leaving.

I agree with posters re state primary, plus top up tuition- and possible extra clubs re hockey/ netball/ rugby etc if your dc are sporty. I have three at Indy and fees at now £5k per month. With mortgage of £2k and joint income of £10k things are tight. When labour get in and the extra 20% is added we will dip in to our £150k pot that was going to be our extension fund but we could see writing in the wall. My advice is don't over stretch. Life gets stressful and it's an awful feeling to be counting down the terms!

We’ve done big mortgage and fees and do it out of self employed income. We’ve just used the last of our savings to cover this terms fees and it is so stressful! But 5 years to go and I don’t regret the decision to live where I live and see my son go to the school he does. Whilst we don’t want to count down the days, every term we get under our belt, is a relief.

Another point - maybe already made, sorry if I missed it. If your plan is grammar because you couldn’t afford private for both primary and secondary, then definitely save the money for private secondary. Nobody can guarantee their child will get into grammar, certainly not when they aren’t even 5 yet, and if your child doesn’t make the grammar cut off you may be grateful to be able to afford options. (Plus you will have been able to invest and grow the money not spent on private primary in the meantime).

@ReadyForPumpkinshigh performing state school children are penalised too. My son goes to a grammar and it’s well known that the offers are more challenging. I think k there is a postcode algorithm.

@Variedviews I am sure the universities improve their algorithms to widen admission overtime because people are gaming the system. I have no doubt they can access the performance of your state schools, the schools proportion of pupils on free school meals, your application address etc.

I mean that data is publicly available. All they need is for the applicant to provide the schools where they sat their GCSE and A level and their postcode. I guess the later you can fake by using a rental address. Similar to how people cheat to get into a state school catchment.