Which would you financially prioritise?

[Newbie1011]

If you had a substantial savings pot (or the potential to create one by the time you would need it) which of these would you / do you prioritise?

• savings for you and your partner to have a comfortable retirement
• private schooling for your children (if this would eat up your savings and make helping your children later on difficult)
• No private schooling but help for your children while at university and possibly a contribution towards a house deposit for them

It feels to me like if we save as much as I hope to in the next ten years or so, we might be fortunate enough that we could afford one of these things - but not more than that - and I’m curious as to what people would prioritise.

@Moonshine5 why do you say B out of interest?

I place a lot of importance on a well rounded education and in terms of priorities family is everything to me so 100% B.

@Newbie1011 what I would say is 'house deposit' is often used on MN as a comparable or alternative to school fees. In my view it isn't. Giving my DS a house deposit in 15 years time (he's 9) isn't going to solve the problems he's having in his state school now. I'd rather move him to private education and put him in a position where he can thrive and hopefully not need my support! A good education is priceless in my opinion (and I'm state educated).

Always B. Without a doubt a good education is priceless.

I would say A and then chose between B and C. If you can'f fund your lifestyle in retirement are you prepared for it to drop or work into you seventies.

Fair enough you do the best for your children within your means - but the definition of "means" includes paying for your own needs now and in the future.

First post nails it.

If the state schools in your area are not great, can you consider moving to the catchment area for a better school?

We're doing A and C.
But, we also bought in area that gave us a realistic choice of 2 outstanding state schools, and i understand this was a very weird quirk of geography. As is it, DS1 walked into one school, and declared there was no way he was going there. So he went on the bus to the other outstanding option. In some ways we are paying for education by buying in a more expensive part of a very cheap part of the country!

A. Put your own oxygen mask on first. It doesn't feel right, but it's important. Then you can always 'c' at a later date. It's never not going to help.

B I understand your feelings, but I wouldn't prioritise it over being as financially stable as you can be in your retirement. Mainly so as not to be a burden on your children.

Retirement. If it goes well you'll have enough to help your children anyway .

Unless you're loaded private schooling is a gamble , your kids could still end up working in McDonalds.

First priority for me would be a secure retirement

@Offthepath this is definitely something we have looked at, but it’s not straightforward. Moving would also mean a big financial outlay, and we also really love where we live - it’s a nice area in everything but the schools! - and prefer living there to the idea of living in to the areas where the school catchments are really good. The houses there are also more expensive, so it would be spending hundreds of thousands of pounds to live in a smaller house, with longer work commutes and losing our local friends/ community, to be in an area we like less, JUST for the school - which seems like a bit of a gamble of our whole lives just for a school place. I also think it’s a bit of a dangerous game where we live in London as catchments are very tiny and shrink and expand all the time as things change. It would also be incredibly difficult to buy a house that is in a good catchment for schools of both genders, plus the age gap between our kids would mean quite a disruptive and unpredictable primary school move for the younger ones in order to sort out the older one with a good secondary catchment. After a lot of thinking about it and researching it we sort of decided it wasn’t the best option for us and that we should try and work with what we have got in terms of opting for one of our (very average) local state schools, or sucking up the cost and going private. We could just afford the latter on paper but I’m worried about the potential implications for our retirement and ability to support them in the future. Then again, education is incredibly important to us too- we were both state educated but had really good experiences at state schools whereas the idea of sending our DC to the local schools where we live now, even though they are not the absolute pits, does make me feel a bit uneasy and like I’d be letting them down a bit. Lots of people where we live think that’s silly though and that they’ll be fine. I don’t know what to think!

I guess the amounts are relevant too. I am clearer on the cost of B than I am of A and C.
if we do B - private schooling - it will cost several hundreds of thousands of pounds and really wipe out our savings.
I suppose in my head B is equivalent to A and a bit of C.
But I don’t know how much people feel we need to have in savings (on top of average pensions) for a good/ comfortable retirement.
And I’m also not all that clear on how much we should expect to spend supporting each DC through Uni or how much we should plan to try and help them with a deposit.
I’d love to have a better plan on all this stuff, though. I would love to pay down a bit more of our mortgage too but feel like I don’t want to wipe out my savings doing that when I don’t know what our plan is for them.

It very much depends on your ages! I have always ‘saved’ for my retirement by paying into my teachers pension. I don’t think of it as saving as such because I can’t use that money for anything else. Alongside that, I also saved for my DD’s university fund from the day they were born, setting up regular payments into an investment ISA. This meant that by the time they were I, I had a decent amount saved for each of them which supported them through Uni. They both received the remaining lump sum after they finished Uni, both using it towards house deposits. By that point I was in my early 50s. From then on, all our savings went into different ISAs and to overpay the mortgage. I retired early, although I still work part time, we are financially comfortable with some savings behind us.

A with some C - c isn't optional though? You are required to help your children with university unless you have a low income (my income was low for the first two years but will be over the threshold next year).

I do know some people who sent their children to private school and although it can be brilliant, I am really not convinced that it offers something genuinely worth the truly astounding amount of money they spent. I flirted with the idea of going for scholarships but it was never really an option and tbh I'm glad we didn't put ourselves under that stress.

I am in my fifties and we are at early retirement stage. So we have actually carried through A and will be doing C.

We both work/worked in higher education and due to our subjects could tutor our own child. DH actually ended up doing some maths tutoring with DS mates at A level, it was a sort of homework club.

Unless a child is in a dangerous school or subject to bullying, which can happen at any school they will do well if motivated and clever.

DS then delighted us by being accepted on to a fully paid degree apprenticeship. This means zero tuition fees, a salary of 28k whilst doing his apprenticeship and as long as he passes a guaranteed job.

It’s just deciding how much to gift DS when the time comes to buy a house. DH doesn’t want to make him lazy so he has never been told this is happening. But we are now aware that he has cost us nothing as he didn’t go the traditional degree route and he actually gives us rent. We do not need it at all but he will get it back many times over when the time comes.

@Newbie1011 your situation sounds very similar to mine. DC are 7 and 9 at local state primary and eldest is struggling. It's meant to be a good school but for various reasons it's not working for him. Local state high school isn't a total dump, just average. We could move but don't want to. We'd be paying at least £200k more to replicate what we have house-wise now in a great school catchment.

We've decided to move DS this August. However we might not move DD. They're very different kids - if we do move her it'll be secondary only (DS moving in upper primary). But I'm very open to doing what's right for each.

Not sure if you can do something similar ie secondary only, wait to see how kids get on etc.

We're doing A and C. Both DC have had private tuition in one subject - DD got a 9 and DS has had 9 in mocks and will be doing GCSE this year. His school teacher told me last week that she was proud of the progress he'd made in the subject and our investing in a tutor was worth every penny. If needed, we'll get other tutors. DD is at 6th form but will take a gap year after A'levels. We have paid off our mortgage, managed to save into pensions, and will continue to do so. We are now saving to cover a mix of uni expenses and help for the future. They will have student loans though, but we want to cover all living expenses. We are very lucky though, as one grandparent (abroad, legally done, no deprivation of assets) has put aside a sum of money for dc, which they'll inherit. I hope we can do the same for our DGC. We are 49.

@CharSiu your DS sounds great, you must be very proud of him. That degree apprenticeship sounds like an amazing option. I’d love it if my DC did something like that!
@PermanentTemporary thats a fair point although I guess I meant some support over and above whatever is the standard, something that would avoid them ending up in a lot of debt etc. I’m not exactly sure on what support I mean or the likely cost of it to be honest, I need to do more research!

Well, the house deposit thing in C is definitely a consideration. Like most Gen Xers I wold prioritise that rather than avoiding student debt, though I also think it's possible to buy too early in life - owing a place is a responsibility, I wasn't ready for it for a few years. Lots are though.

As for saving for retirement- I just haven't a clue about what amounts are really needed, except that it's a lot. Get a pension forecast. And without wanting to sound brutally mercenary, prioritise your relationship- two very definitely live cheaper than one. My mum and dad split as they entered their 60s and it is hard paying for life alone at that age. (Though it has to be said both made it work and it was a huge relief that they were apart).

@Heatherbell1978 sounds like a very similar scenario! I feel the same as you re: moving!
My older DC1 is struggling academically at primary a bit too, even though we really like the school in other ways (she is very happy there, loves learning and has lovely friends and the community is wonderful). I am getting the sense she is a sensitive kid who I fear won’t shine academically unless she is in the right environment and will really struggle in the wrong secondary school- whereas younger DC2 is doing great, seems more robust and like the archetypal ‘bright motivated kid who will do well anywhere’!
When you say you are moving your DS- you mean to a private through school sort of thing? Would you consider sending one child private who they felt needed it more, and not the other? These are exactly the same sort of dilemmas we are pondering!

@PermanentTemporary thats such a good point about prioritising your relationship - even though I know what you mean about thinking about it in those terms! My parents split late in life too and I often think it’s a shame my mum doesn’t have a more comfortable retirement because of being alone (even though there was no way they should have stayed together!)

Retirement

Why do you need to decide now? Just see a financial advisor to look at different options which you could access as necessary. But I’d prioritise A, with C if you can. State school is fine, and free, and pay for tutors if needed, whereas uni does require you to top up. And help with a deposit is invaluable

Absolutely A but we both have always contributed to a pension from our first jobs post university. Assuming good investment growth the pension pot would allow us to make gifts (ticking off C in the future). Those early contributions have really paid off so we are now at a point where we could drop pension contributions down if needed and know we’ve got time on our side for investment growth based off our existing pots.

But… we are also at the point now where we’d prioritise B for secondary over pretty much everything else now. The gap in our local area is significant at secondary but we didn’t think it would be worth the financial stretch at primary. If we had to, we’d be willing to remortgage and use pension to pay off remainder but hoping it wouldn’t get to that and we can pay from savings/income.

What are your pensions looking like at the moment?

I have gone down the private school route - I absolutely didn’t want to, but all the schools nearby are oversubscribed and pretty dire. I have to say, as someone who went to a state school I am really impressed. It’s not just the grades, it’s the confidence and they absolutely love going to school. I’d consider only fans to continue paying if I had to 😂

Just to say I have a DB pension so that’s maybe why I’m a bit more chilled about the fees. I’m putting little bits in JISAs to help for Uni and part of my ISA is for their house deposits (all S&S, no cash so they have increased by a lot on their own, hardly put anything in now which means I can just focus on the school fees)