August is the month when many parents as well as pupils nervously await A-level & GCSE exam results. The grades achieved can have a massive effect on those pupils lives and future careers. Ensuring their child gets the best start in life with a good education can be something many parents start planning from the moment their child is born.
With pupil numbers at their highest since records began in 1974, it’s clear an independent education is the preferred choice for many families. Parents choose independent schooling for their children because they value the broad all-round education on offer, the high academic standards and the learning opportunities offered outside the classroom.
However, after buying a home, school fees could be a family’s largest expense, especially if there are several children to put through school and college.
The average fee for a day pupil attending a top private secondary school has risen past £17,000 a year for the first time, despite climbing at the slowest rate for more than 20 years the increase in fees has still outstripped inflation.
In order to put aside the money needed to cover fees, parents and other family members who want to help out can make use of their annual ISA allowance (£20,000 for the tax year 2018–19). Money invested in an ISA grows in a tax-free fund and can be withdrawn to meet fees without incurring tax.
Consider starting to save from the day the children are born, and encouraging family members to contribute to accounts. If there’s more than ten years to go before schooling starts, then it’s worth thinking about stock market investments. Your money will be exposed to risk, but has the potential to outstrip the returns available on an average savings account.
Increasingly, grandparents are helping out with education costs too. Many are choosing to pass wealth to their families during their lifetime as a way of reducing the value of their estate for inheritance tax purposes, either by giving a lump sum or setting up a trust for the benefit of the child or children.
SCHOLARSHIPS AND BURSARIES
Scholarships are not usually means-tested, but can reduce fees considerably. They are often awarded by schools for academic achievement, art, sports or music. Bursaries for children from disadvantaged backgrounds may also be available to help widen access, but they tend to be means-tested.
If you’re considering a child’s education, an independent financial adviser can help you plan effectively for the years ahead.