- Wealthy Brits are generally in favour of the Government adding VAT to private school fees – 43% of all high-net-worth respondents in the UK agree it should happen, while 27% disagree
- Remarkably, parents who send their kids to private school are more in favour of the VAT addition than those who don’t – 64% of people who plan to send their children to private school think VAT should be added, as do 46% of those with kids currently in school. That’s higher than the 40% of parents without private school kids.
- Men are bigger proponents of the VAT addition, at 48% vs 39% of women, and non-parents agree slightly more than parents (46% vs 42%). Those with grandchildren are less likely to agree (31%)
What impact would the VAT addition have?
- Of those with privately schooled children, just a fifth of parents (22%) say an increase in fees would not impact them
- More than a tenth (12%) say it would price them out of the private sector, and they’d move their children to state school. 9% would move their children to a cheaper private school.
- Others would make lifestyle changes. 13% would cut back on their social life, 12% would look for a higher paying job, 12% would downsize, and a huge 11% would go back to work.
- Financially, 10% would use their own inheritance, 6% would use their children’s inheritance, 8% would ask their parents for financial support, and 7% would ask their grandparents for the same. Concerningly, 9% would dip into their pension.
Harry Bell, Director of Financial Planning at wealth manager Charles Stanley, comments: “Parents – even wealthy ones – make major sacrifices to be able to send their children to private schools. Whilst it may seem surprising that those parents are in favour of what is, in practice, a 20% fee hike, many feel it is their responsibility to accept a higher tax burden for the privilege of sending their children through private education.
“However, it is critical that parents make the right financial decisions to account for such changes. Paying school fees at the expense of retirement savings or using up savings or an inheritance is a very big decision and shouldn’t be taken lightly. With appropriate planning and professional advice, parents can make informed decisions, understand the implications of their actions and make their wealth go further.
