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School Fees Planning

By August 18, 2020August 25th, 2020ELEVATION BLOG

This autumn, many families in the UK will be looking to invest in sending their children to a Private School for the first time or continue down this existing and well-trodden path.

We meet many clients who chose to use their hard-earned savings for education or perhaps have decided to make lifestyle sacrifices, such as not to upscale their home or deferring luxury holidays. Instead, they will look to divert their earned income to pay for School Fees. We also meet clients who as a family have set up a structure for providing for school fees on an intergeneration basis.

In most cases, there is no doubt that because of the economic turmoil that COVID has brought this year, it has put unexpected pressure on many, as to how they will continue to fund for Private Education. Planning, therefore, has never been more paramount.

The average cost of a Private Education (age 4-18) is now over £350,000 per child. If this is generated out of income that could mean parents paying an additional £220,000 in Income Tax.

You may feel that because of the changing economic climate – or because you have not previously fully researched your planning options – that now might be the time to find out how to maximise your position and set out a strategy that can effectively reduce the cost of Private Education. Previously unused Tax Allowances, better use of savings, or the restructuring of debt are all areas where the net difference on disposable funds to pay for School Fees can be improved significantly.

At Elevation – we will review your situation holistically. Here are some of the questions to consider:

  • Have you enquired about Bursaries or other supports provided by schools?

If you have or are intending to have, more than one child attend a school, there might be a ‘family discount’ available?

  • Are you maximising your Tax Allowances, either through Income Tax, Capital Gains Tax or Inheritance Tax?

Very often we can direct you on mainstream planning which can have a massive effect on your retained income or capital.

  • Have you fully reviewed your options around existing mortgages in order to drive down cost? If not we can provide guidance.
  • Do you have a family business? If so, we can show you the options on how to utilise share classes in order to maximise the efficiency of how you extract income.
  • Do you have parents that are completing their own Estate Planning?

If so, we can provide guidance on how to maximise both Inheritance Tax and School Fee planning simultaneously.

By applying a generic planning approach, then it is possible to fund School Fees efficiently, without neglecting other long-term financial goals. In some cases, it is possible to reduce the net cost of school fees by up to 50% by employing a full range of strategies.

Please call us on 0121 411 0488 or email at [email protected] and we will provide a no-obligation initial discussion.

Elevation Investment Management Ltd is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales No. 04794182. Elevation Investment Management Ltd is a subsidiary of Elevation Financial Group Ltd.