Paying School Fees in Advance

Wenfy · 2023-04-26T09:08:57+00:00

We are considering paying for DS’ private primary fees in one go. Has anyone done this and typically how did you fund it & what discount did you get? I’m just trying to figure out if it’s worth pursuing. If we do it do we only want to look at fees from 5-11 (100k) or is it better to do it from 5-18 even if entry into secondary is contingent on passing an entrance exam?

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ejbaxa · 26/04/2023 10:11

I'd be really careful.

You might not like the school, problems could develop (eg bullying).

Also, the school may shut or experience problems due to increasing costs/VAT etc.

bellswithwhistles · 26/04/2023 10:14

Christ. Absolutely not. You have no idea what could happen. The school is a business. If they go bust, there's your £100k gone. Madness!

Invest it instead. Jesus.

3peassuit · 26/04/2023 10:15

I did this for my DDs 6th form. I had the money and the discount outweighed the interest I would have received. I wouldn’t have contemplated doing it for more than a couple of years at a time.

Nimbostratus100 · 26/04/2023 10:16

what if the school goes bankrupt, you will lose eveything

TillyTollyTully · 26/04/2023 10:20

The school is a business. If they go bust, there's your £100k gone. Madness!

This x 1000.

Do you not read the news op? Read the threads on mn about school fees shooting up, kids being withdrawn?

I wouldn't bank on any private school being safe to hold a large chunk of my money, but especially now. If they go bust you'll be at the back of a long list of creditors with next to zero chance of ever getting money back.

Hoppinggreen · 26/04/2023 10:22

I would never consider this unless the discount was huge!!
Even then I would worry

Justanothermum01 · 26/04/2023 10:24

Surely the money would go into some sort of protected funds scheme….? Or no- one would do it??

Original poster

Wenfy · 26/04/2023 10:25

Justanothermum01 · 26/04/2023 10:24

Surely the money would go into some sort of protected funds scheme….? Or no- one would do it??

Yes it does. It is administered by KPMG so even if the school goes bankrupt the money is safe.

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Original poster

Wenfy · 26/04/2023 10:28

3peassuit · 26/04/2023 10:15

I did this for my DDs 6th form. I had the money and the discount outweighed the interest I would have received. I wouldn’t have contemplated doing it for more than a couple of years at a time.

What discount did you get and did it protect against fee increases?

DS is my second DC going through private - with first we didn’t really need to worry too much about fee inflation. Fees rose max 3k pa over 5 years. For DC there’s a chance it could increase by 1k each year do I’d like to lock it down if possible.

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Surpriseparty · 26/04/2023 10:30

You would be far better consulting a good financial advisor, who will probably advise against this, and suggest that you invest the money instead. You will earn quite a bit of interest, which can then be put towards the fees.

As others have said, once the school has your money, you stand very little chance of getting it back if things don't work out.

3peassuit · 26/04/2023 10:36

I had a 7% reduction and it covered increases but it was just a 2 year period, I don’t know how the school would factor in fees rises for a longer time. I was originally offered 5% but pushed a bit and got 7.

Original poster

Wenfy · 26/04/2023 11:08

Surpriseparty · 26/04/2023 10:30

You would be far better consulting a good financial advisor, who will probably advise against this, and suggest that you invest the money instead. You will earn quite a bit of interest, which can then be put towards the fees.

As others have said, once the school has your money, you stand very little chance of getting it back if things don't work out.

It’s the financial advisor who suggested exploring this approach. The money is already invested but I’m only really getting a 7% return (in total) across 5 years. Potentially could use a mortgage to fund instead & invest what we would normally have paid monthly. If a substantial discount is available either option might make sense for us financially

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Original poster

Wenfy · 26/04/2023 11:10

3peassuit · 26/04/2023 10:36

I had a 7% reduction and it covered increases but it was just a 2 year period, I don’t know how the school would factor in fees rises for a longer time. I was originally offered 5% but pushed a bit and got 7.

Thank you this is super helpful.

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TizerorFizz · 26/04/2023 13:07

@Wenfy At the moment you should expect a higher annual return. Do you mean compound interest is only coming to 7% over a 5 year period? So in 2028 you have £107,000? Or 7% per annum? If the former, that’s poor.

Original poster

Wenfy · 26/04/2023 13:36

TizerorFizz · 26/04/2023 13:07

@Wenfy At the moment you should expect a higher annual return. Do you mean compound interest is only coming to 7% over a 5 year period? So in 2028 you have £107,000? Or 7% per annum? If the former, that’s poor.

It’s the former for nearly half of it. So depressing.These are my life savings - been investing since I was 16. But since we’re going to pay for school fees anyway (and no longer have to pay for DD) I was tempted to try and use them (or potentially the mortgage) to negotiate.

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Totallysinking · 27/04/2023 08:26

Our school only allows a year in advance for a minimal discount. If you pay upfront, you won't pay the annual increase and this is not good business for the school

Original poster

Wenfy · 27/04/2023 12:17

Totallysinking · 27/04/2023 08:26

Our school only allows a year in advance for a minimal discount. If you pay upfront, you won't pay the annual increase and this is not good business for the school

Ah ok. I suppose that makes sense. Lol probably not looking good for a discount then. I’ve asked the school anyway to explore 2 and 3 year options. If not will research the best fixed rate accounts available.

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