Planning

Paying for your child's education

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Budgeting for school expenses doesn't have to be daunting

The price you pay for your child's education will vary depending if they go to a private or state school. According to the Independent Schools Council census in January 2013 the overall average termly fee is £4,765 (excluding nursery fees) up by 3.9% from 2012.

When you take into consideration the whole time your child will be at school, total fees could be tens of thousands of pounds - or hundreds of thousands at the most expensive schools. Even at free, state-maintained schools, the costs can add up.

Extras can add considerably to the bill, one estimate is 10% of total school fees. The amount of extras you'll pay varies depending largely on activities your child chooses to take part. Extras can include:

  • Instrumental tuition
  • School trips
  • School lunches
  • Books
  • Public examinations
  • Stationery
  • Uniforms
Budgeting for your child's education can give them the best start in life

Planning ahead

The costs may seem daunting, but if you're realistic about your financial situation and plan well in advance there's a better chance of giving your child the education you want.

Our checklist can help you plan how to fund your child's education:

  • Calculate the total cost of your child's education. Ask the school for a copy of average school fees for the past five years.
  • Work out what you'll have to spend on other extras. Calculate the cost of school uniforms, lunches, travel, trips and spending money.
  • Keep a budget. Write down all your money coming in (salary, property and inheritance) and going out (mortgage payments, bills, pension payments).
  • Subtract the school fees from your income. Work out if the remainder is enough to live on comfortably now and in the future.

Funding your child's education

There are a number of options for financing your child's education. Some options might include:

  • Investment funds. Your money is pooled with other people's funds and invested by an expert fund manager.
  • Shorter-term savings. When your child is heading to school in less than five years.
  • Scholarship. Many fee paying schools offer scholarships for academic, sporting, musical or "all-round" excellence. Scholarships vary in value but rarely cover the whole fees.
  • Bursary. A grant from a private school to help you pay the fees. They are often awarded after a 'means test' of family income.

The value of investments (and any income received from them) can fall as well as rise and you may not get back what you invested. For some investments this can also happen as a result of exchange rate fluctuations as shares and funds may have an exposure to overseas markets. You should aim to invest for at least five years.

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Everyone's circumstances are different and what applies to one person may not be right for someone else. The suggestions above are based on a general assumption of each circumstance and they are not intended to provide advice or recommendation.