How much does private school cost and what can you do to save for your child or grandchild’s education?

Everyone wants their children or grandchildren to have the best possible start in life, and that may mean you have hopes of giving them a private education.

But private schools can be very expensive, and with fees set to no longer be exempt from VAT starting in January, the costs are likely to increase.

A study cited in the Times estimated that you would need a salary of £245,000 to afford sending two children to boarding school if you were the sole earner in your household. However, there are several proactive steps you can take to ensure you’re well-prepared to fund your child’s or grandchild’s education.

Read on to find out how much private schools can cost and what you can do to prepare for paying the fees.

It will cost around £350,000 on average to send a child to private school for their entire schooling life

The Times report found that the average boarding school fees are £14,153 a term for boarders and £7,975 a term for day pupils, while private day schools charge an average of £6,021 a term.

However, these figures could change significantly once the government rescinds the VAT exemption on private school fees.

Although many private schools have indicated that they will not pass the full 20% extra on to parents, most are likely to raise their fees from January 2025.

Some schools, such as Eton, have already said that parents will have to pay the full 20%, meaning the boarding school fees will rise to £63,000 a year, up from £52,749.

Without the VAT exemption, the estimated cost of sending a child to private day school for their entire schooling life is around £350,000, and around £694,400 for a boarder.

These figures are around 80% higher than the £194,000 it would have cost for a child who started school in 2010 and finished their A-levels this summer, and the £392,300 it would have cost during that same period for a boarder.

How to ensure you are prepared to fund your child or grandchild’s education

Though the costs of sending your child or grandchild to private school can be considerable, there are several steps you can take to ensure you are well-prepared to provide them with the education you desire them to have.

Choose the right school

The figures you read above are averages and do not portray the wide range of fees among different private schools.

For example, boarders at Eton or Harrow will pay just under £18,000 this term. While day pupils at King of Kings in Salford will pay £1,500, and those at the Cambridge Street School in Batley will pay just £700.

The key takeaway here is that you can give your child or grandchild a private education without breaking the bank. The quality of the school is important, but it’s possible to find excellent schools that are likely more affordable than other, better-known institutions.

So, if you are worried about how you will afford the costs of private school fees, it could be a good idea to look around for alternatives.

Use the state system for part of the child’s education

Using the state system for part of a child’s education could significantly ease the total cost of their schooling.

The Times report notes that it would cost around £149,048 on average for a child to attend a private day school between years 7 and 11 (ages 11 to 16).

This is more than £200,000 cheaper than the average cost of using the private system for their entire education.

So, sending your child or grandchild to a state school for primary-level and sixth form could help you afford the costs of secondary private education.

Establish a bare trust

Many grandparents set up bare trusts as a way of saving for their grandchildren’s school fees.

You can open a bare trust on behalf of the beneficiary (your grandchild), though they can’t access the funds until they are 18. You can, however, withdraw money on the child’s behalf as a trustee to cover school fees.

Any funds withdrawn from the trust are taxed as if the child owned it, presenting potential tax advantages.

The rules for parents opening bare trusts are slightly different, and they tend to be more tax-efficient when opened by grandparents.

Pay the school fees in advance

Some private schools will allow you to pay fees several years in advance. This means you can stagger school fees (in case you have children of similar ages) and could also mean you are able to lock in lower fees.

Apply for scholarships

Many private schools offer scholarships and bursaries for students. Indeed, some of the best-known schools in the country have full fee waivers available for students based on their academic performance and background.

If you are unsure about being able to pay the full cost of your desired school’s fees, you may want to explore the scholarships they have available and whether your child or grandchild would be eligible to apply.

Speak to a financial planner

A financial planner can help you save for your child or grandchild’s private school fees, and work with you to create a plan that prioritises their educational needs.

They can guide you in selecting tax-efficient investment options and setting realistic savings targets to ensure you can cover the costs of tuition and other school-related expenses.

By factoring in the expected timeline for your child or grandchild’s enrolment and future schooling costs, your financial planner can give you peace of mind that the child’s education will be secure without impacting your other goals.

To speak to a financial planner, please get in touch.

Email enquiries@clarionwealth.co.uk or call us on 01625 466360.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Tax planning and trusts are not regulated by the Financial Conduct Authority.