Making it all add up
PUBLISHED: 17:27 27 August 2009 | UPDATED: 16:12 20 February 2013
Paying for your child's education may seem a daunting prospect, but there are options, as Maheesha Kottegoda explains
WHEN it comes to paying school fees, the best advice is to plan ahead. Start saving as early as possible and adopt a financial strategy that will enable all fees to be met in the event of any financial crisis. Seek independent advice and ideally put plans into place before the child's first birthday. Long-term planning ideas suggested by financial advisers, Edward Jones, include shares, mutual funds and corporate bonds. Those with less time to play with may want to consider ISAs.
There are many ways to pay fees, as few can afford the cost outright. If you can stump up three years' cash in one go, you might qualify for a discount. Lumps sums let schools take advantage of their charitable status by investing the money and earning interest tax free, but most families may not be able to do this. Shrewd parents must juggle assets, butter up grandparents and harness any available bursaries. A third of all the pupils in Britain's independent schools receive some help with school fees, mostly from their own schools, in the form of scholarships and bursaries.
Bursaries and scholarships
Bursaries can cover anything from 10 to 100 per cent of the school fees. Many schools offer bursaries based on a particular talent. The Abbey School in Reading, for example, offer music scholarships at year 7, 10 and 12 as well as academic ability. Standards are high. On music, for example, the school tends to advise that the child should be up to Grade 5 standard on one instrument (with the caveat that if she shows "great promise" this might be enough).
Many schools award scholarships for academic, sporting, musical or 'all-round' excellence. Few are now worth more than 10 per cent of the fees, though most can be topped up with means-tested bursaries if parents are hard up. Most awards are available at secondary, rather than prep, level and the older foundations, such
as Eton, tend to be the wealthiest.
The Educational Trusts Forum offers information about the very wide variety of organisations which provide grants for a whole variety of reasons. It also offers
an advice line each morning (05601 503 524).
The grants are wide-ranging, including those from the Girls' Day School Trust (which mentions on its website that awards are usually for those whose family income is less than £16,500
There are also awards for military personnel (HM forces bursaries), clergy, siblings of pupils already in the school, and teachers' family bursaries (for children of those teaching in the school itself).
Saving and investing
Obvious solutions to reliably raise money will include remortgaging the family home and unlocking pensions, but according to Kris Garwood at Edward Jones, those looking to cover educational costs could consider investments such as shares, mutual funds and corporate bonds.
Kris says: "When choosing a particular investment, consider both the time span and your attitude to risk. Generally, the longer you have until your child begins education, the more time your money has to potentially grow and weather any market fluctuations.