Private School Fees Planning - Macbeths Insurance Brokers

Planning Ahead for Private School Fees

The cost of sending children to fee-paying schools has risen around four times faster than the rise in wages since 2009, according to a 2014 study by Lloyds Bank.

These figures highlight the fact that more and more parents are going to have to carefully plan how they pay their children’s school fees. A certain number will no doubt be able to take the considerable financial outlay in their stride, but for the majority it will be necessary to reduce the cost burden as much as possible through careful financial planning.

There are several options you can consider:

 

School fees plans

These are a way to save that are usually promoted as tax-efficient, and usually offer some kind of protection. While they’re intended to provide for school and university fees, the money can be used for other things if you choose.

Capital schemes

These involve investing a lump sum. The earlier you invest (when your baby is born, or even before, is best), as the more chance you have of making your money grow.

Income or regular savings schemes

Here, you make regular monthly or annual payments to a savings scheme. Again, the earlier you start saving the more money your investment could earn.

Combined schemes

Under these schemes you invest a lump sum at the start of the plan and top it up with regular or irregular payments over a short term.

Payment Protection

You can insure for a tax free monthly income to cover school fees.  The income would be triggered and payable for the rest of the term if parents were to die or suffer a critical illness such as a heart attack, stroke or cancer etc.

However, a school fees plan isn’t the only option, and it might not be the best one. There are a wide range of different savings and investment products available that Macbeth can advise you on that are perhaps more suited to your needs. They may also be worth considering for future university fees. 

Learn more about our financial services for private clients

Author: admin | January 6th, 2015

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