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A Guide to Paying School Fees The Independent Schools’ Bursars Association (ISBA)
FINDING THE FEES All independent schools charge fees, but they vary widely depending on the type of school and boarding requirements. Extras can add considerably to the bill (approximately 10 per cent), depending on which activities your child chooses to take part in – for example, music tuition or school trips. Allowance should be made for expenses relating to books, entries for public examinations, stationery and uniforms.
Planning for school fees
It is important to prepare for the commitment of paying fees for several years, having in place a strategy that will enable the school fees to be met in the event of death, an illness or loss of income, and considering how fees need not be entirely dependent on earned income, so ensuring that a child will be able to complete their education. Planning strategies can significantly reduce the financial burden of school fees, so take professional advice. Planning can be covered under three headings: 1. spreading the cost of fees 2. invest in a lump sum, 3. setting up a regular savings scheme
Spreading the cost
Having embarked upon a private education many parents experience difficulties in funding school fees continuously from taxed income. There are a number of schemes available that are designed to help parents
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with payment of school fees. The purpose of these plans is to improve cash flow and make school fees more affordable. This involves spreading an element of the school fees over a longer period of time. For example, a parent may be able to afford comfortably 70 per cent of the school fees from income; however, the additional amount may prove to be a strain on finances. In this instance, it may be possible to take out an equity draw-down plan to spread the school fees for the balance of 30 per cent over say a longer period
The lump sum
Early investment of capital can avoid the need to use income for providing for school fees in later years, or goa significant way towards reducing reliance on income. The need for tax efficiency and flexibility of approach can be tailored to individual requirements.
Regular saving
Regular saving for school fees should ideally be started as soon as possible. The longer that