Can you afford the rising cost of tuition?

For generations my family has been educated in private. Many of us saw it as a positive experience, but not all of us. Children were often expelled from an early age. We have a letter written from a residential school in the 1930s by a desperate parent. It starts with: “Dear mom and dad, I hope you had a good Christmas.” He was five years old.

Privately funded schools have many advantages, mainly due to the extra money they can spend per child. They have smaller class sizes and better facilities and therefore can often support the average child, as well as gifted children and those with special needs. It is therefore understandable that many parents want to pay the required fees, especially if it is the system that they themselves have experienced.

However, although the proportion of children attending fee-based schools remains fairly constant at around 7 percent, funding this choice becomes more difficult. Rising house prices mean that mortgage payments take a larger proportion of household income, leaving less to cover school fees. So how can parents who favor the private option but have financial difficulties handle this challenge?

On average, the daily fee costs between £ 5,442 and £ 6,895 per quarter, depending on age. There are three terms a year, so add that to over 13 years of schooling and you are probably planning to head for £ 250,000 to educate every child. This does not include daycare costs, which in London can approach £ 30,000 a year. If your child were to embark during their retirement years, the fee will be £ 11,763 per quarter on average. This adds another £ 100,000 to the total.

Remember, these are averages. Eton, for example, will set you back £ 14,698 per quarter (plus £ 400 registration fee and £ 3,200 “acceptance fee”).

Be prepared for fees to exceed inflation while your child is in school. The main costs for schools are staff salaries, which are increasing every year. In addition, schools with a good reputation and facilities are in high demand by wealthy families overseas, so they may increase the fees, knowing that this will not deter many “clients”. In 2019-2020, fees increased by 4.1% on average.

Don’t underestimate the extras. Celebrate your child by earning a spot on one of the school’s sports teams, but expect to pay several hockey tours to major European cities during their school life. Uniforms can also be expensive. I’m still pissed off that I have to pay £ 300 for a blazer my daughter barely wore.

You will also have to pay for the exams. And this final term can seem especially expensive, as students are often sent home as soon as they finish their exams – no school wants them to go wild and paint bad words in weedkiller on the cricket pitch.

This is a major financial decision that will shape your entire life. If you’re thinking badly about finances – or if your circumstances change – you may have to take your children out of school at a critical time. You and your partner must be united in this decision.

I’ve heard that you should have half the money in savings before you go down this route, hoping to pay the rest out of your income. This money will have to be managed – we generally assign a higher risk to the assets intended to pay in the following years and a lower risk to the pot you will dip into in the next five years. Managing this well can help deal with the risk of fee inflation.

More and more, many depend on grandparents. As a financial advisor, I advise clients who want to pay their grandchildren’s school fees to only commit if they are willing to offer the same support to all of their grandchildren. (And how many will you have?) They should also think about how to compensate any childless offspring. For those who are unable to start a family, it must be doubly painful to see their inheritance consecrated to the children of their siblings.

If you engage in private education, think about what would happen if you and / or your partner died. Are you going to plan that the guardians will continue the education of your children? Do you have a will in place and sufficient life insurance if necessary?

There are ways to cut costs. Not getting on board helps. If you find the right school, it may mean getting closer to it. Starting later – at the next level or even for the sixth form only – is another option. However, at this point the children have formed friendships, which makes change more difficult.

You may be able to win a means-tested bursary or, if your child has special talents, a bursary, to help keep costs down. About a third of the pupils of the Independent Schools Council (ISC) establishments receive some form of assistance. Also think about haggling. Some schools may offer a discount if you can pay multiple terms in advance, although you can then commit to the school, so this can be a risk.

Some will look at these numbers and say that it is better to pay the premium over the price of housing that comes with moving into the catchment area of ​​a very good public school.

I have clients who, being in the watershed of a school rated “good” by Ofsted, the watchdog, chose to save money, creating an “education budget” that provided their children had almost anything they could claim to be educational: musical instruments, art supplies, tutoring, computers, and travel. What was left was for the house deposits after graduation.

While this is not the end, the couple’s two children have gained places at Oxbridge, showing that the public school option is not to be ignored. Indeed, the share of pupils arriving at Oxbridge from UK private schools has fallen from almost 37% ten years ago to less than 26% today.

Certainly, it should not be assumed that a private school will be suitable for your child. They vary enormously and it is difficult to find the right one for each child. You can find them in different schools miles apart. And the half terms rarely overlap.

The obvious question is: is private education good value for money? Many families undoubtedly think this is still the case. But success is not guaranteed.

Beware of unintended consequences. Your kids may find themselves in the company of much richer families, with kids driven to school with a driver (or, in one case I know of, arriving by helicopter). Vacations with friends can become trips to the Caribbean; the party bags are loaded with hundreds of pounds of gifts. It can be difficult to follow and it can skew children’s expectations.

Worse, they can find the wrong peer group – wealth is no guarantee against emotional problems and can even facilitate the adoption of negative behaviors, such as drug use.

In an ideal world, there would be no private education sector. Public education would be of a universally high standard. Maybe one day we will. Until then, many will be prepared for the sacrifices they deem necessary to pay for a good education.

But those who can’t afford what they loved shouldn’t feel like they are giving up on their own children.

We put our five children in private education. Would we do it again? I don’t think it would be affordable now, given the fee increases. It was then a fight. We don’t expect our grandchildren to go to private school. I am happy that this family tradition is fading.

Charles Calkin is a financial planner at James Hambro & Partners

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