Latest news with #education costs
Telegraph
6 days ago
- Business
- Telegraph
Cost of private school to double in a generation to £380k
The cost of educating children in private schools will almost double after Labour's VAT raid, analysis suggests. Parents of a pupil joining reception this September would be expected to pay £377,000 in school fees up until Year 13, according to Weatherbys private bank. By comparison, for privately-educated pupils collecting their A-level results this week, parents would have spent £205,000 over the course of their education. These figures assume annual inflation of 3pc, which accounts for two thirds of the price increase, with Labour's VAT levy responsible for the rest. For children attending boarding school, the cost of sending a child from Year 3 to Year 13, assuming they spend the first three years of their education at a day school, will reach £763,000 – up from £413,000 currently. Weatherbys said that while the increase is just under double what today's school leavers would have paid, parents should budget for a 100pc increase. Oliver Barnett, head of private clients, said: 'This degree of uncertainty may make parents feel concerned. The key thing is to be realistic about the costs of private education from the start and to make robust plans with your adviser. 'Often grandparents help with school fees and this can be part of their inheritance tax planning.' Mr Barnett also warned parents to think carefully about the long-term viability of any school chosen. The Telegraph is aware of 48 schools that have so far closed citing Labour's 20pc levy as the main reason. This week, Our Lady's Abingdon, a 160-year-old Catholic school in Oxfordshire, announced it was closing with immediate effect, leaving hundreds of pupils without a place for September. Governors for the school blamed the VAT raid for its 'sharp decline in pupil numbers' as well as the rise in employers' National Insurance. Mr Barnett said: 'Pupil numbers have fallen by 5pc in the key intake years of reception, Year 3 and Year 7. In addition to falling rolls, private schools have lost their eligibility for business rates charitable relief – and then there's the increase in employer National Insurance contributions. So costs are rising sharply. 'Many established schools will sail through this, but for others it will be tough. You want your child settled in a school, and if it closes partway through their education, that can be terribly disruptive.' Alice Haine, of wealth manager Bestinvest, said the fee increases left parents facing difficult choices, with some choosing to only educate their children privately for the most important school years. She said: 'Private education will become a luxury reserved for the ultra-wealthy, rather than aspirational professionals willing to make sacrifices elsewhere. 'More parents may choose to shorten a child's private education stint, opting for primary only, secondary only, or until their child finishes GCSEs, or even just sixth form.' The Weatherbys study also shows how school fees can quickly rise further if the rate of inflation increases. In a scenario where annual inflation is 5pc, the cost of sending a child to boarding school is close to £1m at £907,000, while a day pupil would cost £443,000. Analysis by The Telegraph found private school fees will rise by more than 17pc in the upcoming academic year. The average Year 13 day fees will jump from £21,035 to £24,600 between September 2024 and September 2025, according to an audit of fees for 228 independent schools. Rathbones Asset Management has forecast that parents will pay an extra £77,000 over their child's school life because of VAT, rising to £96,000 if they attend a London private school where fees are higher. For boarding school pupils it could cost parents £111,000 extra, assuming the school passes on the 20pc levy in full.
Times
6 days ago
- Business
- Times
Total cost of private school to almost double to £380,000
The cost of sending children to private school will almost double after the introduction of VAT on fees, analysis suggests. The parents of a privately educated child leaving school this year after A-levels are likely to have spent an average of £204,622 on fees, according to Weatherbys Private Bank. The cost of putting a child of the same age through boarding school is estimated to have been £413,471. However, costs vary widely with the Good Schools Guide putting the highest annual fees at £75,000. Weatherbys says that for a child starting in reception at a private school this September the cost could ultimately reach £377,000 — £763,000 if they were boarding. This assumed annual inflation of 3 per cent, which accounts for two thirds of the increase, with VAT responsible for the rest. Last September private schools put up fees by an average 6.7 per cent. When 20 per cent VAT was imposed in January, many schools initially cut fees by 5 per cent to cushion parents from the immediate impact, but overall, the average fee rose by about 22 per cent. Oliver Barnett from Weatherbys said: 'I'm sure sending out invoices with VAT on was a nailbiting moment for some heads, nervous about losing pupils. We expect that schools will attempt to recover some of the discount they gave in January. Historically, schools increase fees above inflation, so our 85 per cent growth estimate is conservative.' Barnett said there were other pressures on schools. Some years had a 5 per cent drop in pupil numbers, while schools have lost their eligibility for business rates charitable relief and are dealing with higher employer national insurance contributions. Although many schools are expected to manage these pressures, others may struggle to remain financially viable. Barnett said parents should consider the long-term stability of a school to avoid disruption during their child's education. Fiona Fernie from the accountancy firm Blick Rothenberg said: 'Labour's intention to target wealthier families with VAT on school fees overlooks that many families making sacrifices to afford private education are not necessarily very wealthy. 'Some send their children to private schools because local state schools are inadequate or cannot provide necessary specialist services. These families will be hit hardest, with many likely to be priced out over the coming years. 'While the revenue from VAT on school fees is intended to fund state schools and hire 6,500 new teachers, there is little evidence that this teacher pool exists or that funding will cover additional classrooms needed for increased pupil numbers. More pupils in state schools with fewer resources will create challenges.' Rathbones Asset Management has estimated that parents will pay up to £111,300 more per child over their school life because of VAT. Richard Cook from Rathbones said: 'The earlier parents start saving and investing for private school fees the easier it is to spread the cost and manage finances. Investments may help beat inflation and compound returns over time, unlike cash savings. A qualified financial adviser can help families plan cashflow and investments aligned to their risk appetite, ensuring education goals don't compromise broader financial resilience.' Julie Robinson, the chief executive of the Independent Schools Council (ISC), said: 'Schools will always do all they can to keep fees affordable for parents. A third of pupils at ISC schools receive some sort of fee assistance, and the amount spent on bursaries is at an all-time high. However, the government's decision to tax education will inevitably have an impact on cost, with a cumulative effect over several years.'
