Funding school fees is one of the biggest financial commitments a family can make. As a result, the financial implications can be daunting and a source of considerable concern for some parents.  Latest figures from the Independent School Council (ISC) show that the average fee at an ISC school was £5,562 per term. (Source: ISC Census 2017).

Louise Davies from St James’ Place shares her thoughts on why planning as early as possible is the key to affording independent school fees:

“Generally, parents looking to fund school fees fall into three categories – those who want to invest a lump sum, those who would like to spread the cost of fees, or parents wanting to set up a regular savings scheme to provide funds to cover future fees. There are several schemes available to help make school fees more affordable, for example, you could consider using your annual tax-free ISA allowance.

By investing the maximum amount permitted in an ISA and selected funds run by full-time professional investment managers, a tidy sum could be accumulated in the space of ten years.

For grandparents, trust* planning can be a useful tool if they wish to make provision for school fees and achieve Inheritance Tax (IHT) benefits at the same time. If they make regular payments from their income without reducing their lifestyle, then these gifts are not counted as part of their estate for IHT purposes.

Grandparents might also want to consider other solutions, such as life assurance, to help increase the funds created for grandchildren. This can be very useful when there is more than one child you wish to provide for. You might also be looking at ensuring your estate is correctly structured and protected in the event of death, illness or incapacity.

With interest rates still low it is important to make your investments work for you.

The value of an investment will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.

An investment in equities does not provide the security of capital associated with a deposit account with a bank or building society.

The levels and bases of taxation and reliefs from taxation can change at any time and are generally dependent on individual circumstances.

* Trusts are not regulated by the Financial Conduct Authority.

Louise is inviting School Notices readers to discuss their school fees planning concerns and opportunities in a no-obligation school fee review.  School Fees Planning Surgeries are being held, strictly by appointment only in September and October 2018 in local regions. All surgeries last approximately 40 minutes and are held in the strictest confidence without obligation.

Contact Louise Davies, Financial Planner, on 020 3605 1205 for more information on school fees planning or for a complimentary guide to Wealth Management.