Planning for your children's education

Paying for your children's education is arguably the most important investment you will ever make. But with costs constantly on the rise, it makes sense to think carefully about how and where to spend your money in order to give them the best possible start in life.

The Centre for Economics and Business Research has revealed that average day school fees per year are £13,194, with boarders paying on average £30,369. The total average cost for schooling two children privately as day pupils over a fourteen year school career adds up to £553,000, rising to £890,000 if they transfer to boarding school at 13i.

Even relatively affluent parents are increasingly faced with the difficult choice between making sacrifices to cover the cost or considering a good state school as an alternative. It certainly makes sense to think carefully and early about how and what to pay for in terms of education, and to have a plan in place to fund this.

Analysis by the Higher Education Funding Council shows that students who attended a state school are significantly more likely than their private school peers to graduate from university with a top degree gradeii. The obvious answer might therefore seem to be to send your offspring to the nearest decent state school. However, the reality is more complex. Entrance into private school is often not just a matter of being able to pay the fees, but getting into the right state school can be a nail-biting process whereby even years of forward planning can end in disappointment.

What’s more, when you finally wave goodbye to your child at the school gates on that long-anticipated first day, you may find yourself little better off than the parents of their privately educated friends. Why? Because the money you are now saving on school fees could be going towards your mortgage. Research by the independent think tank Reform Scotland published in 2014 indicated that within the catchment areas for eight out of ten of the top performing state schools in Scotland house prices were at least 34% higher than the local authority averageiii.

You should also bear in mind that cost and performance in the school league tables do not represent the whole story. A recent report by The Herald revealed that a quarter of all medical students in Scotland attended private school, despite the fact that the independent sector educates just 4% of all pupils in the countryiv. And although there are plenty of individual state school success stories in almost any work environment, research by the Sutton Trust shows that privately educated UK graduates earn an average £4,500 more than their state school counterparts three years after graduationv.

When it comes to university, unlike the rest of the UK, if you and your children live permanently in Scotland they will normally be eligible to have university fees for a first degree paid by the Scottish Government, regardless of your income. However, you should also keep in mind that fees are paid only for study in Scotland: if your offspring is looking to study at a university in England, Wales or overseas, fees of up to £9,000 per year are paid by the Scottish Government as a non-income assessed loan and are repayable.

Given the expense, setting aside money early in your child’s life will make a huge difference later on – even if you decide to send your child to a good state school you may still end up paying extra for the area, so you need to think carefully. But in the end, securing the best education for your child is about more than just money. By taking a holistic approach and planning ahead you can ensure that giving them a real head start in life is eminently affordable and need not come at the expense of other comforts for your family.

Early financial planning with a Private Banking and Advice Manager could help secure the education and future you’d like for your children.

i, “Professionals risk being priced out of private schools, as fees continue to rise”, July 2015

ii ‘State students outperform private in degree grades

iii, “The best catchment areas: more expensive than going private”, January 2014

iv “Quarter of Scottish medical students from private school”, May 2015

v “Privately educated graduates ‘earn more’ than state school colleagues”, August 2015

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