Rising private school fees – and threat of VAT – could see 26% of children removed from private school

  • If a future Government started charging VAT on school fees, 26% of parents say the extra cost would mean they’d have to remove their child from private school
  • In any event, just over one in four (25%) high net worth parents say they will have to pull their children out of private education as a result of rising school fees, according to the latest research from Saltus 
  • One in five also say they will have to take on additional borrowing to be able to afford rising school fees, and of those, almost one in ten (9%) will turn to friends and family to help cover the shortfall

Rising school fees are forcing parents to take out loans, turn to the bank of mum and dad, and even move house to continue to keep their children in private education, according to the latest data from the Saltus Wealth Index Report.

The report – which surveys 2,000 people with investable assets of more than £250,000 – found that of those with children either already at private school or due to start, more than seven in ten (71%) say that rising school fees will impact their choices around private school education for their children in the future.

For almost a third of those parents, the rising costs mean they will no longer be able to give their child or children a private education. Over one in five (21%) say they will have to move their child or children out of private school and enrol them into a state school, just under half of whom say they would consider moving house to be in a better catchment area for good state schools. Almost one in ten (8%) say they will no longer be able to enrol their pre-school child or children into private school, due to the increase in fees. 

 
 

Almost one in ten (9%) parents surveyed say they may have to move house in order to keep their child or children in private education, either to enable their boarding children to become day pupils at the same school, or so they can move them to a more affordable private school.

A further one in four (25%) say they will have to borrow money – either via a bank loan (11%), by extending their mortgage (5%) or from friends and family (9%) – if they are to continue to be able to afford the fees. 

The reliance on family to cover education costs is further backed up by the fact one in seven (15%) of older parents surveyed say they have started providing their adult children with financial support as a direct result of the cost-of-living crisis. Of this group, 7% are helping specifically with school fees, i.e. paying for their grandchildren’s’ education, whilst 18% are supporting with higher education costs for their adult children. 

 
 

Potential VAT rises would cause further financial problems

The report also explored the views of parents with children currently attending a private school on what they would do if a future government started charging VAT on fees.

Almost a quarter (24%) said they would be unaffected and would continue to send their child or children to private school, but for the rest, the additional 20% cost would cause issues.

 
 

Half (50%) said they would be able to keep their child or children in private education but would have to make changes – either moving them from boarding to becoming a day pupil (26%) or removing them from their current school and enrolling them in a less expensive one (24%).

The rest (26%) said they would be forced to remove their child or children from the private sector completely and instead send them to the local state school.

Commenting on the findings of the report, Mike Stimpson, Partner at Saltus, said“On average, private school fees increased by 6% from 2022 to 2023 and these are likely to rise by a further 5% this September. If Labour wins the next general election and carries out its pledge to impose VAT on school fees, then we could see the cost of private tuition rise by at least a further 20% ** in the years to come. 

 
 

“According to our latest research, price rises over the past few years are already having a significant impact on parents’ ability to pay and further rises will almost certainly price some families out of private education completely. 

“For those parents who are worried about affordability, seeking financial advice is key. A financial adviser can help provide a clear view on the current shape of your finances and outline ways in which parents – and other family members if they want to help support – can most effectively finance their school fees.” 

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