Funding school fees is a big financial commitment for a family and can cause considerable concern for some parents. Gemma Young APFS, Certs CII (MP & ER) – Chartered Financial Planner, Queens Square Wealth Management, offers some expert advice
Providing a good education can be one of the most valuable gifts parents or grandparents can give to children. Parents therefore continue to recognise the value that independent education can offer – but it isn’t getting any cheaper.
The 2019 Independent Schools Council (ISC) annual census revealed that their members’ average boarding fees, per term for pupils at senior boarding schools, was £11,304 – with day fees at £6,634. Member prep boarding school fees are less, at an average of £8,406 per term for boarders and £5,226 per term for day pupils. While the financial implications can be daunting, the key to affording school fees is to plan as early as you can.
Saving soon after a child is born gives ten years to build a fund for their secondary school education.
Generally, parents looking to fund school fees fall into three categories – those who want to invest a lump sum, those who would like to spread the cost of fees and those wanting to set up a regular savings scheme. There are several schemes available to help make school fees more affordable, and an experienced wealth manager can draw up a bespoke investment plan that can be both tax efficient and flexible.
For example, you could consider using your annual ISA allowance. By investing the maximum amount permitted in an ISA and selecting funds run by full-time professional investment managers, a tidy sum could be accumulated in the space of ten years.
It is crucial to make your investments work for you as hard as possible. A measured long-term view is commonly the best approach to investing.
For grandparents, trust* planning can be a useful tool if they wish to make provision for school fees and achieve Inheritance Tax (IHT) benefits at the same time. If they make regular payments from their income without reducing the standard of their lifestyle, then these gifts are not counted as part of their estate for IHT purposes.
Another option is to give a lump sum for their grandchildren’s education: provided they survive for a further seven years, the gift is free of IHT. Grandparents might also want to consider other solutions, such as life assurance, to help increase the funds created for grandchildren. This can be very useful when there is more than one child you wish to provide for.
Today, it is more important than ever to be fully aware of all the solutions available so you can make an informed choice. Speak to us to determine which option is best for you and your family.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.
An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
* Trusts are not regulated by the Financial Conduct Authority.
QUEENS SQUARE WEALTH MANAGEMENT LTD – Senior Partner Practice of St. James’s Place Wealth Management
01225 742 644 | 07894 876784
15 High Street, Corsham, Wiltshire, SN13 0ES
Queens Square Wealth Management Ltd is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website www.sjp.co.uk/products.
The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.