Investing in Your Child's Education
There is little doubt that Britain's independent schools provide a world class education, which opens doors for the rest of a child's future. However, there can also be little doubt that the cost of this education is soaring, putting it virtually out of reach of middle class families. If you have a child starting school this year, you can expect to pay out upwards of £500k in total by the time your child is 18, if fees continue to increase as per current trends. Assuming you don't happen to have this kind of money lying around, what can families do to meet the cost of a private education?
Start Investing Early
If you know you want your children to attend a fee paying school, it's never too early to start investing and saving. The more you can invest during your child's preschool years, the less painful the fees will be when the time comes. It's vital that you take professional financial advice about a tax efficient way to invest, and you should also ensure that you are comfortable with the risk level of the investment strategy you choose - but done wisely, good investments when your child is little will give you a fantastic head start.
Understanding Scholarships and Bursaries
Once your child reaches school application age, there are two main options open to families seeking financial assistance - a scholarship or a bursary. Around one third of children in independent schools receive financial assistance, so most schools are well geared up to handle this process, and will make the system as easy for you as they can.
Scholarships are based on merit and talent - often in a particular field such as art, music, drama, science or sport. They are competitive, but if your child is successful, they gain a place at the school which is often (but not always) accompanied by a discount on the fees, which is not means-tested.
Bursaries, on the other hand, are based on ability to pay and are fully means-tested. Bursaries at the top schools are becoming increasingly generous as schools seek to justify their charitable status, so never be afraid to ask. At Eton, for example, in the year 2015/16, around 20% of boys have bursaries reducing their fees by up to 66%, with 73 pupils paying no fees at all. Expect the financial inspection part of the process to be rigorous, however.
Grants and School Fee Discounts
Apart from scholarships and bursaries, you may be able to secure help with school fees in other ways too. A huge variety of educational grants are available from various charitable organisations, and while many of these naturally target low income families, some are much more quirky - you may find that you can receive help with school fees based on what you do for a living, your current family circumstances or where you were born. It's always worth searching for grants on the off chance that your family could be eligible, or you can contact the Educational Trusts' Forum for advice.
Sometimes schools offer other discounts directly - perhaps for children whose parents are in the armed forces, or in the clergy. Many schools offer sibling discounts, and if you teach at an independent school you will probably also be eligible for a discount. Additionally, schools have discretion to vary their fees as they see fit. It never hurts to explain your situation and to ask - schools understand the huge costs involved, and handle such requests in confidence and with care.
Ask the Grandparents
An increasingly popular way to ease the burden of school fees is to ask for help from the child's grandparents. The rules around inheritance tax are complex, however, so you must seek financial advice before settling on a way in which they can help, whether that's with a lump sum, an investment or ongoing payments.
If the child's grandparents have (or can set up) a family business, it's sometimes possible for school fees to be paid via dividends paid to the child, but again this is complex and requires expert advice to ensure that you don't fall foul of the tax system.
School Investment Schemes
If you can afford to pay some of the fees in a lump sum, you may find that your chosen school offers an investment scheme. This is where you pay the fees up front, and the school invests the money, later splitting the profits between you and them, effectively providing you with a substantial discount. Established schemes are usually tax efficient and perfectly legal, but if you're thinking of negotiating this on an individual basis with a school, ensure that your accountant can advise, as you could find yourself having to deal with capital gains tax.
Clearly independent school fees can be a big burden on all but the wealthiest of families. Recent statistics show that nearly 60% of parents with children currently at a fee paying school are worried about continuing to afford the fees, with nearly 40% struggling to pay on time. Independent schooling is, however, an incredible investment in your child's future, and it looks likely to remain a sacrifice which many families are willing to make.
William Clarence Education is the leading education consultancy service in the UK. With an unrivalled reach into the UK Schooling and University network, we help and advise families from around the world to reach their maximum potential and gain access to the very best of British education.
William Clarence put the student’s needs and welfare at the centre of every programme of study we deliver with a focus on integrity and discretion. Services include UK School Placement, University Placement, Residential Tutoring, Oxbridge Applications, US College Admissions and Homeschooling.
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