Can you put a price on your child’s education?

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Can you put a price on your child’s education?

They say you can’t put a price on education but, actually, you can. According to the Independent Schools Council census for 2020, the average annual fee for a place at a UK boarding school now stands at £35,289, while the average cost for a day place at boarding schools is £19,908, or £14,940 for independent day schools.

Not that the cost, which rose by an average of 4.1% last year, seems to be putting parents off. There are now 537,315 independently educated pupils in the UK – the highest number since records began in 1974.

Yet even for those in a comfortable financial position, it’s clear that independent schooling represents a significant investment over several years – particularly if you have more than one child. And that’s without factoring in all the associated costs such as uniforms, sports equipment, musical instruments, clubs, school trips etc.

The clock is ticking

As the mother of a nine-year-old son, Hampden & Co Banking Director Clare Ansell understands the potential financial commitments all too well.

“Even if you’re only thinking about senior school, once your first child starts primary school, the clock is ticking,” she says. “When we researched our options, I was struck by the variation between fees at different schools. And with the costs being so high, there’s a lot to be gained from starting to plan when your children are very young, or even when you’re just thinking about having a family.”

“School fees represent a big commitment over many years. We understand the importance of being there for the long term.”

Helping where other banks can’t

Stephen Buckland, a Hampden & Co Banking Director based in London, helps clients manage their school fees – sometimes for the length of the children’s education, and sometimes just for a short spell when the parents need a little extra to tide them over. Options that often come into play are remortgaging, personal loans, borrowing against investment portfolios, or even a simple overdraft facility.

“We can’t give advice on investments but it’s well worth getting in early to speak with a financial adviser or a wealth manager that you trust,” says Stephen. “There are tax savings that can be made with a bit of forward planning and we’re always happy to join in those conversations from a banking perspective.”

“We often help the whole family as their lives evolve, with solutions that span generations.”

There are also other options beyond banking. If you have cash available you could, for instance, offer to pay your school fees for a few years in advance, in return for an appropriate discount. Schools also offer discounts, sometimes significant, if you send more than one child to the same place. And then there’s the option of scholarships and bursaries. A third of all independent school pupils now receive help with their fees, with the vast majority of that help coming from the schools themselves.

“School fees represent a big commitment over many years,” adds Stephen. “We understand the importance of being there for the long term. We enjoy getting to know our clients personally and develop a full understanding of their finances and priorities in life. It means we can often help them when other banks wouldn’t be interested – and that’s even more important in this uncertain era, when circumstances can change so quickly.”

“It’s about reassurance,” agrees Clare. “We often help the whole family as their lives evolve, with solutions that span generations. For instance, we have a few clients who had paid off their mortgage but have since taken up our Retirement Mortgage to help their children and grandchildren at a time when they need the money most. It provides the older generation with the satisfaction of seeing the impact their generosity has and can enable significant inheritance tax benefits that advisers can help them with. Money is a sensitive subject but opening up that conversation with the wider family can be very helpful when it comes to schooling.”

Clare is a banker in our Edinburgh office.

More about Clare

Stephen is a banker in our London office.

More about Stephen

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