If you’re paying for private school how are you doing it?

[thesadmaggot]

We have some options:
1 sell down our investments
2 remortgage/use low interest debt
3 reduce pension contributions and pay out of income

i’m trying to decide on which would be most efficient. option 3 increases our income tax bill quite significantly so I think likely to be the worst.

so I wondered if you’re in this situation what would you do?

The plan was to pay out of income. However, we wouldn’t have done it unless we had savings enough to cover a good chunk just in case. We worked out that we had enough in savings to cover at least 5 years (assuming a rather pessimistic 10% growth each year) without needing to touch ISAs or our relatively small amount of other investments.

Those savings are our early retirement fund, and we figured if we had to use them, we could work a couple more years and not go quite so early. (The intention is to use the saving to bridge the gap between retirement and being able to take the pension, so working a bit longer would not only replenish the fund, but also reduce the amount of time needing to be covered).

DP was made redundant shortly after accepting the school place. I think I should be just about OK to pay the fees out of my income alone if he can’t get another job, but I’m very glad we have that cushion as it takes the pressure off.

With this happening to us, I am not sure I would advise planning to pay out of income alone unless you have an alternative plan in case income suddenly drops significantly (in our case, it will have halved unless DP can get another job).

We pay out of income, we have enough in savings/investments to cover both DC schooling but would prefer to leave that alone to grow and the upfront discount is not sufficient to change that