RICHMOND borough financial planner Jason Lurie, from Hampton Wick firm Holland Hahn & Wills, gives his advice on what to consider when planning for school fees.

You can also watch the video above for a fireside chat on the topic by Holland Hahn & Wills financial advisers Simon Ainley and Amyr Rocha-Lima

School Fees Planning

In the UK, like many countries, it is a requirement that children go to school, as a minimum, from age 5 to age 16. This can be done, very broadly, 4 ways:

Home schooling

State school – basic schooling is free

Grammar school – usually by entrance exam – basic schooling is free

Private school – paid for education Therefore, when you hear the headline: 'School Fees Planning' you immediately think of private school. It is undoubtedly the most expensive; as a rough guide for a day pupil (i.e. not boarding school) over a 13 year period, fees in the order of £250,000 + will be required, per child, which is a daunting funding commitment for most of us to contemplate. (A good guide to secondary schools can be found here: https://kidify.co.uk/blog/top-state-secondary-schools-in-london-2022-sunday-times-parent-power-league-table – there are more guides, including primary schools, that can also be found on this website.) Common considerations to consider include:

Payments

From income

From capital

From a combination of these

Who can pay?

Parents

Grandparents

Combination of these

Time horizon

The commitment once begun, is difficult to stop, so if you are contemplating paying school fees you need to think about paying right to their end, and potentially university afterwards.

Inflation

The cost of school fees usually increases at a greater rate than inflation, so this needs to be factored in

Health

Ill health could harm your ability to continue with funding, so life and health insurance needs to be considered, which is an additional cost to contemplate. At Holland Hahn & Wills, we believe that creating a long term cashflow forecast, taking all the above into consideration is the best way to plan for school fees. As financial planners, it is common for us to meet clients and receive enquiries from people who have heard of school fees products, usually packaged, neatly bound and with glossy pictures. It is fine of course to purchase school fees products, however, these are merely packaged ways of making payments. Plan first, pay last is our recommendation.

Funding methods

There are a few items to consider, and I would be happy to explore these options in more detail as needed: Consider using ISAs, income cash flow, lump sums, and mortgages, these methods are usually more flexible and often have less charges than packaged products

Grandparents who wish to pass capital to their children and grandchildren can do this by lump sum or potentially from surplus income, which can be extremely efficient (gifts out of normal expenditure)

Grandparents could also assist your children to move house to a location into popular grammar schools catchment areas. Properties in these areas are usually more expensive because of the school connection.

Trust options can be considered but care is needed here. wherever possible, we believe that 'keeping it sweet and simple' combined with careful planning is most effective.

Scholarships and bursaries are also worth considering – each school has it's own arrangements (https://www.goodschoolsguide.co.uk/choosing-a-school/independent-schools/fees-financial-assistance-scholarships-and-bursaries) If you are a parent or a grandparent and want to know more about how our financial planning process can help you, or perhaps want a second opinion on the way your own wealth is managed please get in touch: 020 8943 9229, or via email at [email protected] You can visit our website at www.hhw-uk.com Feel free to share this article with a friend. This article is for information purposes and should not be treated as advice. Individual circumstances should always be considered prior to purchasing any financial products. For further information please contact your Wealth Planner. Any views expressed above are based on information received from a variety of sources which we believe to be reliable but are not guaranteed as to accuracy or completeness. Any expressions of opinion are subject to change without notice. Past performance is not a reliable indicator of future results. Investing involves risk and the value of investments and the income from them may fall as well as rise and is not guaranteed. Investors may not get back the original amount invested. Holland Hahn & Wills are a sponsor of Richmond Nub News. Their community-minded sponsorship means we can publish our local, high-quality journalism without intrusive adverts or clickbait. Read more about their support for the local community