Parenting

How much do private schools really cost?

Youssef Darwich

There are currently 630,000 children in independent schools (also known as private schools) — just under 7% of the total number of school children in the UK.  For some of the parents who choose private schools, the fees represent a considerable expense in their life. 

We trawled through the websites of all independent secondary schools to find out exactly what those fees are, and the variations between the different types of schools.

At Hapi, we’re building a dedicated account to help you afford these costs (or any other goals you have for your children). Whether you want to send them to private school, help them with their uni fees, or just have a pot of money for them to go explore the world when they turn 18, we can help you get there.

UK independent school map

The map below helps you quickly find out average termly fees, total costs and how much you need to save (and invest) every month to fully cover the costs (if you started saving from the day your child was born).

Notes: The above map only shows secondary school and sixth form fees (11+). Some schools begin boarding at a later age (e.g. 13). In these cases, the total boarding costs only include the years where boarding is actually possible. Our suggested monthly savings assume you start investing when your child is first born.

Looking for a dedicated investment account for private school fees? Sign up to Hapi below.

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What’s the total cost of independent day school?

Fees can really vary from school to school with term fees at the lower end starting around £2,000 for day school and going all the way to over £14,000 (boarding rates).

It’s also worth noting the differences between the HMC schools (a professional association of heads of the world's leading independent schools) and the remaining independent schools.

The average total costs to educate your child at an independent school was £110k for secondary school and sixth form (11–18). HMC schools were on average £29k more expensive than non HMC schools costing you £125k and £96k respectively.

The range, however, was much wider with the most expensive day school (Wycombe Abbey) costing over £210k for secondary and sixth form education and the cheapest (the group of OneSchool Global schools) costing just £23k for the seven years of education (11–18).

The average term fees are around £5.5k (HMC schools cost nearly 25% more than non HMC schools) with over 80 schools costing less than £4k per term.


What’s the total cost of independent boarding school?

If you’re interested in sending your children to boarding school then be prepared to pay a little more.

The average total costs to educate your child at boarding school was £211k for secondary school and sixth form (11–18) with little difference between HMC schools and non HMC schools (£218k and £203k respectively).

Dulwich College (which costs £310k) was the most expensive option and Tettenhall College (costing £106k) was the cheapest option for a boarding school education.

The average termly fees came out at £10.8k with little difference (10%) between HMC and non HMC schools.

As you can see, independent school can come with pretty hefty sums, so as a parent, how can you best prepare yourself to afford these?

How can I afford independent school fees?

For some of us, being able to afford school fees straight from our annual pay check isn’t really an option. In those cases, a feasible alternative would be to come up with a savings & investment plan to help you get there. You save up for years to buy a house and to retire. Why should the hefty sums of school fees be any different? Especially if you’re planning to have multiple children.

In the map above, for every school, we’ve calculated how much you would need to save (and invest) per month if you started saving for school fees the day your child was born.

In summary, to afford the average price of secondary & sixth form school fees you would need to put aside roughly £180 per month (rising with inflation each year) from the day your child is born. This figure rises to £344 per month to send your child to boarding school. As with anything — the later you start saving, the higher the monthly amount you need to set aside.

If you treat your child’s education just like you’d treat a house purchase it suddenly becomes much more affordable.

What’s the best way to save for independent school?

If you start putting money aside from the day your child is born you have just over 11 years until you first need the money. Given the long time frames and if you are prepared to face the risks, then it makes sense to invest this money and give it the best chance of earning a high rate of return.

If you’ve decided to invest the money, there are a few options available for you.

  1. Your own stocks & shares ISA: This is probably the most easy to understand option. Your savings are tax efficient(you don’t need to pay tax on any income earned from the investments or on any profit when you sell the investments) and you can withdraw them at any point. However as the money is in your own name, it becomes very easy to “dip into it” to cover other expenses you may have. You’ve got to ensure you’re disciplined as you could very quickly find other things in your life popping up (e.g. a house renovation) which ends up taking you back to square one. You also have to be careful of the current £20k annual limit

  2. Your own general investment account (GIA): With a GIA you don’t have an annual limit — making this option attractive if you already max out your ISA every year or want a separate pot just for your child’s savings. The account is still in your name and so you still need to be careful, but by separating it from your ISA you may be able to be better disciplined. If you do end up choosing a GIA, make sure you manage it correctly to avoid paying capital gains tax (CGT). The CGT annual allowance is currently £12.3k meaning that at the point you sell the investments (e.g. when you need to pay yearly fees) any profit you make over £12.3k is taxed.

  3. A bare trust: The third (and our favourite option) is a junior investment account within a bare trust. We like this option as it; (i) places the funds in the child’s name meaning you can’t use them for your own benefit and (ii) uses the child’s CGT allowance —   decreasing the chances of you having to pay tax. An added bonus of a bare trust is that any contributions from non parents (e.g. grandparents, godparents, aunts & uncles) are also exempt from income tax. This is really useful when you move the funds and savings accounts to reduce risk the years before you need to pay the fees.

‍Please note that tax treatment depends on the circumstances of each individual, and it may vary in the future.

How can Hapi help?

Saving up for school fees is very similar to saving up for retirement. You build up the funds over a period of time and then gradually draw down on them. Because you don’t use the funds all at the same time (e.g. you pay fees over a seven year period) it’s important you manage the funds optimally to give them the best chance to grow. A sensible strategy would be to start off in riskier assets (e.g. equity) and gradually move the right amount to bonds and savings accounts 2 or 3 years before you need the money.

If financial planning isn’t your full time job then this can be a little difficult to manage (it’s the reason a large portion of us don’t manage our pensions ourselves). At Hapi we help you navigate through all of this:  you can create an account, we calculate how much you need to save every month to reach your goal and even give you a unique link that you can share with Grandparents (or anyone else) who wants to help out.

This is just one of the many ways we can help you give your child a head start in life. To find out more information visit us here or sign up below for early access.

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If you're looking to start saving for your children but don't know where to begin, get in touch or read our guide on saving and investor for children.

 

Disclaimer:

All writers' opinions are their own and should not be read as personal financial advice.  Individual investors should make their own decisions or seek independent advice. As with any investment, your capital is at risk and may be going up as well as down which means you may be left with less than your initial investment. Past performance is not a reliable indicator of future performance. Please note that tax treatment depends on the individual circumstances or each client and may be subject to changes in the future. 



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