It is when you find out what school your child will be going to for their secondary education. Cue much gnashing of teeth, tears and – for the lucky ones – victorious punching of the air. I am in possession of a Year 6 child.
Every conversation I have had with mothers and fathers of my son’s classmates recently has been about where their kids will be educated from September. My son currently goes to a private primary school. The fees for private secondary schools are much higher than for primary education.
For the one my son might go to, they come in at more than £15,000 a year. Places at the local state secondary school – which is good enough for the local estate agents to highlight if properties are in its catchment area – are hotly contested. We have applied, but might not get a place.
Anyway, at the moment, I am stuck between choosing the good (but enormous) state school or the good (but costly) private school. My son wants to stay with his friends who are going to the private school. He might get a scholarship (we find that out this week too: more pressure), which would reduce the fees.
Even so, the thought of seven years of private education eroding my savings (inherited from my late mother) is terrifying. I cannot do anything more adventurous with the money than leave it on deposit earning less than inflation – because if I lose money, I cannot then pay the fees.
Of course, leaving the cash on deposit means I am losing money. School fees rise by more than inflation – last year, by 3.5 per cent according to the Independent Schools Council. That is five times what I am getting on my savings.
How do other parents manage? My research completed in the playground suggests a few sources for the money: the bank of grandma and grandad; inheritance; long working hours (including husbands sleeping on friends' sofas in London during the week to benefit from the capital’s higher wages) and, for some, remortgaging and relying on the overdraft while praying that their sprog will one day have a good enough job to keep them in their impoverished old age.
Tarnished pensions
Have pensions ever been out of the news this century? These days, employees strike about pensions rather than salaries. Company takeovers are derailed by holes in pension schemes. High street names vanish thanks to their pension pledges. Defined contribution schemes perform badly. Annuities seem consigned to history.
Now the gold standard of pensions, the defined benefit scheme, starts to look tarnished. A government Green Paper out last month proposed that the 11m Britons in defined benefit schemes might get less than they hoped in retirement if businesses were allowed to increase pension payments by CPI rather than RPI.
Such a move could cost the typical defined benefit scheme member about £20,000 over their life. So, those who – possibly smugly – thought they were going to be okay with their nice, safe defined benefit schemes need to think again and start saving for themselves. Welcome to the 21st century guys: if you want to have a happy retirement then it is up to you to sort it. Relying on your employer to look after your needs is so last century.
Too many acronyms
Jisas, Lisas and now Ifisas: all variations on a theme of Isa. And we all love Isas, don’t we? A comfortable shelter from the taxman, non-threatening: easy peasy. Up to a point, maybe.
The problem surely is the old chestnut: over-complication. Okay, Jisas are easy enough I suppose. After all they are just a kiddie version of an Isa, but with lower investment limits and you cannot take the money out until junior is 18 – so, maybe not that easy.
Lisas: lifetime Isas for those saving for their first home and/or retirement. Generous bonuses from the government, but there are plenty of rules to comply with. Now Ifisa (less catchy that): the Innovative Finance Isa – basically one that invests in peer-to-peer lending.
I know very little about peer-to-peer lending, although I can understand how the returns on offer might tempt. I just feel as if I am drowning in a sea of acronyms.
Charlotte Beugge is the joint owner of www.skintedmintedmum.co.uk
