Can we afford private school?

[Minimalistmamaoftwo]

Hi,
I want to get a sense of whether we can afford to send our 2 (potentially 3) children to private school.
Ideally I would want to send them from 8-16. We currently have a household income of £100k, I am at home with the children. By the time my eldest is 8 this should be around £180k due to my husbands guaranteed promotion and me going back to work. This should rise to around £220k around five years later and probably peak there. We also have two properties worth around £450,000 with equity of £300k which currently net us £13,000 a year in rent. We also own our own (mortgaged) home. Fees for the schools in our area range from £10-17,000 per annum.
Is this manageable? Many thanks

Hard to tell without knowing your outgoings. How much free money would you have left each month (after bills, food etc)

What are your other outgoings?
say your kids are at the upper end of the fees it could be £60,000 per year for a decade dependent on ages of kids
fees won’t be going down

Personally I wouldn’t
it’s a financial weight around your neck
what if your DH loses his job etc
You can’t go back to work?
you’re basing it on best case everything going swimmingly scenario

i would look at post tax take home income + what your outgoings are. remember fees rise above inflation each year generally. so you may be looking at £25k x 3- £75k fees per year for a while out of taxed income. This before uniform, trips, exam fees etc.
you may well be able to do it on your salaries & rental income, but without knowing how much your mortgages cost etc it’s an impossible question

Do you have excellent state schools closeby for at least Primary so as to save those fees for their university?

Outgoings would just be the usual mortgage/food/utilities etc, we don’t have any other debt. I would definitely go back to work for my own sanity and am in a career where this is always an option. My husband is on a specific pathway re salary so that wouldn’t change even if he moved to a different company it’s more the is it possible with these numbers? Thank you for the feedback

Do the £10k-£17k fees include VAT?

If you’re going to do it, pick a through school (3-18) and pop them in the school in year 6 and pay up front for the full 6yrs up to yr 11.

Inclusive of vat yes. We have an outstanding state school where they would go until 8 but certainly for my eldest I would want to move him at that point. Could possibly wait until 11 for the other one (two)

Thank you @AgathaMystery this is helpful. I had considered selling a rental to do this but seems short sighted

Don’t underestimate the relief of knowing you’ve paid up and the children’s education is secure. Honestly. If I could have done the same I wouldn’t have hesitated. You can usually get a discount too for paying in advance. Not a huge one, but a bit.

are the figures pre or post tax? How big is your mortgage?

you really need to build an excel model to calculate post tax income, expenditures and fees in a way that accounts for ~5% growth in fees over time. I would also start saving now - with 3 kids I would feel much better knowing I had one child’s fees in savings (invested) before initiating the commitment.

Just make sure if paying fees up front it’ll definitely be the right school for them x

We’ve put 2 through private secondary on a similar level of income without feeling stretched, though our mortgage was quite small. However that was pre-VAT and they both had 10% scholarships. We’ve always agreed that we wouldn’t have managed 3 without an unacceptable impact on our lifestyle (holidays mostly). Those are very low fees and I’m surprised at a school being acceptable until 8 but not up to 11. Having the rental properties does mean that you have an insurance against unforeseen problems at least.

Figures are pre tax for salary and post tax for rental income so realistically could put our first through using just the rental income. Mortgage is just under £200,000 we won’t move again as we have plenty of space. Fees are standard for our area in the North. Sorry I should have been more specific regarding our eldest, he is a very quiet and sensitive child and I feel like he would be better moving at eight and making friends before secondary and then going up with the same children than at 11. My second is a bulldozer so I have no concerns about him going at 11 if necessary

we could of course sell both rentals in a few years when the remainder of the mortgages are paid (currently at £85,000 across the two) and fund the majority of their education with the proceeds but would rather not have to do this

What age are you both ?

I’m 36 and my husband is 35

Are you and DH well insured? How secure are your jobs? Personally I am very risk averse so wouldn’t want to commit unless I was very sure that I had a watertight plan for redundancy/ill health/death. Sorry to be morbid.

If you have a good State option use it, especially at Primary.
Unless The primaries near you are very bad then save it for Secondary in case its needed, we did this and the DC integrated into Private seamlessly in Y7.
We also had a few years fees saved up
Plus I think they benefitted from being in a mixed Primary and were far more mature and emotionally intelligent than a lot fo their peers who had been in Private since age 3/4
If you do that I am pretty sure you can afford it without too much trouble

@redgingerbread no it’s a good point. We have life insurance and my husband has provision via his work for illness/death. I guess the real insurance would be the rentals which we could sell if we had to. We also have a wealthy parent on each side (both sets are divorced) who have already offered to pay fees for eldest but we have said no however we could fall back on this.
@Hoppinggreen I have no issue with my youngest being at the state primary until 11 really but would want to move my eldest at eight which is a standard intake point at most of the local through schools simply because of his personality type

Sounds like it should be doable with some lifestyle sacrifices, and you have the option of selling the rentals as back-up. Bear in mind that as your husband’s gross pay rises his take home will rise much less as he’s now in the 62% marginal tax bracket.

I’m slightly surprised you are so confident of his future earnings. Unless you’re public sector there is no such thing as a guaranteed salary pathway. Anyone could lose their jobs tomorrow, and struggle to get a comparable one. Not necessarily a showstopper for you, but keep that risk at the back of your mind.

My school fees are just over £40k per child per year - roughly £14k per term, 3 terms a year.
So potentially- you’ll be spending £120,000 a year. If you have a combined income of £220k, that leaves you with £100k. So doable- without having to sell any properties. But that’s a day student. But all the extras do add up and school fees are going up again next year.

It’s more that the role has specific bands which command specific salaries and he is scheduled to progress to the next band. This applies to similar companies across the board so he would be able to move into the same role within many other companies although I understand that it’s not guaranteed it would be highly unlikely for him to lose the job and be unable to find the same role elsewhere. I imagine this is the same for anyone really unless you already have the fees saved you are always vulnerable to events outside of your control. I suppose really in that eventually we would sell the other properties and this would almost fully cover fees for all the children for their time at school.

@Solobanana are you in the south? The fees in our area range from 10-17k, one is actually just under 10k. Our current favourite is £14k per annum at secondary level though I know this will go up. We are therefore looking more at £60k per annum with all extras I imagine and would only have all three (if we have a third) at school together for about three years