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How to keep up with paying school fees

This article is part of
Guide to paying fees for education

How to keep up with paying school fees

Putting a child or children through private education is a huge financial commitment.

For most parents and grandparents, it may require years of planning and saving to make sure the funds to pay for their education do not run out – particularly when the costs of private education are rising faster than inflation.

Even if clients do not want to put their children through the private education system, making sure they can afford the costs of nursery school or private tuition means setting aside a reasonable sum of money.

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Lisa Lloyd, wealth planner at Sanlam UK, points out a 2018 census conducted by the Independent Schools Council (ISC) showed a record number of pupils at ISC member schools – 529,164 pupils at 1,326 ISC schools, up from 522,879 in 2017.

As demand for private education places rises, so too do the fees.

Average fee increases this year were 3.4 per cent, the census reports, down slightly from 3.5 per cent in 2017 but still ahead of the UK’s rate of inflation.

Ms Lloyd says: “With an average term of fees now costing £5,700, educating a child privately through senior school will cost around £85,500 (assuming five years at today’s average fees). 

“Of course, those are just averages. In my experience working with clients in London and the South East, senior school fees can often exceed £10,000 per term, not including extras such as uniform and trips.”

She warns fees are only likely to increase, so planning is crucial.

“If current education inflation of 3.4 per cent persists, the average cost of private education will be nearly £26,500 per year, per child, by the time a newborn today reaches their thirteenth birthday,” Ms Lloyd sets out. 

“The total cost for five years of senior school will be over £141,000 per child. 

“That means you need to start putting aside more than £11,000 per year from birth to cover these fees (albeit assuming no growth), and the later you leave it, the more you will have to save.”

Start early

She confirms the best strategy for saving is to start early.

Myles Edwards, membership director of Foresters Friendly Society agrees: “When saving for life’s financial milestones, such as your child’s higher education, it all boils down to starting the process early so your money benefits from the time it is invested to have the chance of providing higher returns.”

Kay Ingram, director of public policy at LEBC Group, observes: “School fees inflation, like nursing homes, is higher than RPI inflation, reflecting the mismatch between supply and demand and the fact that private schools are labour intensive.”  

For that reason, most clients with ambitions to send their offspring to a private school will be looking for inflation-beating investments.