What Price A Good Education 

More and more members with young families, school age children or grandchildren are benefiting from the considered advice being provided by this service. It is always prudent to plan early. However, it is never too late to ensure that the best possible financial strategy is in place to meet the ever rising cost of private education.

Let’s face it providing a good education for our children never was, and almost certainly never will be an inexpensive option but it is worth considering what we get for our money. Smaller classes, more personal attention and tuition and generally a better chance of a good start in life are just a few among the many benefits.

For those of you who have decided to opt for private education the remaining question will be finding the most effective way of paying for it.

HOW MUCH?

So what sort of cost are we discussing: Well the Independent Schools Council, in a recent survey, showed that the average boarding school charged £6,854 per term with day schools fees averaging £3,136. But parents will be well aware that the fees are not the end of the matter, there are always the ‘extras’ to consider.

It is interesting to note that school fees have increased at a rate well in excess of inflation for a great number of years. This trend continues and fees have increased by between 6% and 12% this autumn. There are many reasons for these increases however I am confident that any of you opting for private education for your children would wish to ensure that, having started on that route, you would wish to be able to follow it to a logical conclusion.

The estimated total cost of sending a child through prep school, public school and university, based on a fairly conservative estimate of 6% inflation, would be in the order of £300,000.

HOW?

The cost may have to be met from income, but, providing the decision is made soon enough, it may be possible to build up some savings to offset the cost in the later years; the cost is not the same at all stages of education; fees for secondary education are normally higher than for Preparatory schools.

Let us identify some other potential sources of funding

Earmarking capital: By putting a lump sum to one side and investing it wisely a good proportion of the cost can be generated from investment returns. Combining this strategy with tax efficient investments and the use of suitable trusts can greatly ease the burden over time.

Grandparents: lump sum gifts to suitable trusts for the education of grandchildren can not only assist with the payment of fees in a very tax efficient way but can also be a useful way of reducing the Inheritance Tax liability on their estates.

Mortgages: Some lenders now offer schemes which only charge you interest on the difference between the amount you are currently borrowing and the amount you hold in current and deposit accounts and have flexible schemes allowing you to increase your borrowing to a predefined limit when required.

For more information call now on 0845 643 5056