Coping with rising private school fees
Chris Broome – Chartered Financial Planner
Rising private school fees are placing a financial strain on parents.
Many parents consider independent education to be the best choice for their children. But they are increasingly turning to alternative options to make this private schooling achievable.
That’s according to a new survey conducted by CEBR for investment house Kilik & Co.
The latest Killik & Co Private Education Index found that the average annual cost of a day school has risen by 3% since 2015. It now stands at £15,000 a year.
The total cost, including extras, of a 14-year education has risen by 15% to reach £325,600. This is the total cost from reception through to upper sixth form in a day school.
This increase in private school fees has risen faster than wage growth for professional careers, even where both parents are in full-time employment.
Annual private schooling fees, including extras, now represent 39% of an average doctor’s disposable income and 65% of an accountant’s.
But what’s the alternative, if private education becomes unaffordable?
Some parents are sending their children to a state primary school before moving to a private secondary school, as a way to keep the total costs down.
The analysis by CEBR found that around 6,000 more children enter the independent sector when they transition from primary to secondary education.
Choosing to send a child to a state school until either age 8 or 11 could result in cost savings of £63,500 or £117,900 respectively.
These cost savings are expected to continue to rise in the future, and the abolition of the Common Entrance Exam could also accelerate this state to private school trend.
It’s no surprise to see that school fees in London remain the highest in the country this year. Average fees in the capital have risen faster than those in the rest of the country since the turn of the century.
Between 2015 and 2019, fees in Wales and Scotland saw more significant growth.
Wales experienced the fastest growth in private school places in the past year, up 2.4% between 2018 and 2019.
Svenja Keller, Head of Wealth Planning at Killik & Co, said:
“The rising cost of fees is a concern for many UK parents. Even for those parents with established professional careers, our findings show the need for a plan to meet the ever-increasing costs of funding the private education of their child or children.
“Critically, a financial plan is needed to assess what is manageable with a family’s available finances and what is best suited for each child’s needs. With a strategy in place, parents can work out what is most important to them.”
Ensuring a robust savings plan is put in place, hopefully well ahead of time, will ensure you have control over your children’s education costs.
We will always include school fees as an expense within our lifetime cashflow forecasts, with this cost rising by a set amount each year it’s in payment (typically 5%), providing both you and us with a visual representation of whether you’re on track, and if not, what planning actions you should consider.
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