School Fees
The advantages of being able to provide your children with private education are evident, however the financial implications are significant. Generally, for long term private education to be feasible, one or more of the following will apply to you:-
- Higher Rate Tax Payer
- Significant spare income to save for future school fees
- Significant equity held within property
- Lump sum to immediately invest
If you would like us to quantify the level of monthly savings or size of lump sum required to implement a Templegate School Fees Plan to fund your child's education, please request via email or telephone the Templegate School Fees Funding questionnaire. You will need to provide the following:
- The year in which your child will start and leave each school
- An estimate of the current annual fees for each school
- The year in which they will leave the final school
Why do I need planning advice?
Having decided to educate your child/children independently is it important to take appropriate advice to ensure the continuity of their education.
The Parent/Grandparent must be fully aware of the financial implication and be confident they can afford the fees throughout the selected term. If the costs of an independent education are not planned properly, this could prove serious for both the child and the Parent in the long term.
At Templegate, we are able to offer comprehensive financial advice as to the best manner to meet and protect future school fees.
Our clients fall into two categories: those Parents looking to invest a lump sum; and those who are wishing to regularly save.
Templegate is the appointed Independent Financial Advisor (IFA) for the Independent Schools Network.
Lump Sum
If you are in the position of having a lump sum that you can "earmark" specifically to meet the cost of future school fees, there are a range of plans open to you.
Early investment of capital can help avoid the need to use future earned income to provide for school fees. With all investment options, the monies are only earmarked for school fees and it is at the investor's discretion how funds are used.
In all instances, we embrace fully the need for tax efficiency and investment flexibility when tailoring individual arrangements. Portfolios and recommendations are constructed to take into account clients' attitude to investment risk.
Your bespoke school fees plan will take into consideration the following points:
- Professional management of your capital
- Diversified spread of assets to suit your risk attitude
- Minimising the burden of higher rate tax via tax sheltered investments
- Benefits of composite fees paid directly to the school
- Opportunities for effective use of trusts
Regular Saving
Regular savings for school fees can help pay for future costs and should ideally be started as soon as possible. It is prudent to commence school fees planning before your children are born. The longer that you save, the less the impact there will be on income when school fees fall due.
Options might include the following:
- Saving from earned income
- Investing a lump sum to make it last longer than if left on deposit only
- Re-mortgage a property to release cash for investing, as in the 2nd option above
- Protecting the school fees plan payments in the event of death, serious illness, the inability to work or, loss of job through redundancy.
There are many plans available that can be tailored to individual needs and requirements. This leaves individuals with flexibility to use funds at their discretion.
Spread the cost
Having embarked upon a private education for their children, many Parents have trouble in funding school fees wholly and continuously from taxed earned income.
There are schemes available, designed to help Parents over the longer term by providing greater growth than a deposit account, thereby making the money last longer and saving you money.
In essence, this involves spreading an element of the school fees over a longer period. For example, a Parent may be able to afford comfortably 70% 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% over say a 10, 15 or 20 year period.
Features of this plan include:
- Flexible drawdown facility
- Loan facility either secured against property or unsecured
- Repayments spread over an affordable period
Note that if a mortgage is involved, your home may be re-possessed if you do not keep up repayments on your mortgage.
We offer a free initial consultation, without obligation.
So what next?
The only thing left for you to do is pick up the phone and call Templegate on 0845 833 8837 or, email info@templegatefinancial.co.uk or, complete our enquiry form.
Templegate Financial Planning Ltd is an appointed representative of Sage Financial Services Ltd, which is authorised and regulated by the Financial Services Authority. Sage Financial Services is entered on the FSA register (www.fsa.gov.uk/register) under reference 150452. The FSA do not regulate will writing services or some forms of mortgages and inheritance tax planning. The information and content of this website is intended for UK consumers only and is subject to the UK regulatory regime. Templegate Financial Planning Ltd. Registered Office: Winton House, Winton Square, Basingstoke, Hampshire, RG21 8EN Registered in England No. 04416499.