How to save on school fees

Guaranteeing a base level of literacy for your children has never been more expensive than it is today. Gordon Brown has poured billions of taxpayers' money into the state system over the decade: spending on education and training has gone up from £37bn in 1997-1998 to over £73bn in 2007-2008 an increase of nearly 70% in real terms.

Brown has used the cash to push up teachers' salaries (220 head teachers earn over £100,000) and to hire another 40,000 of them for good measure. He has also pledged £45bn for Building Schools for the Future programmes and invested massively in equipment and facilities.

Unfortunately, it hasn't done much good: A-Level and GCSE results may look superb but, as David Craig points out in Squandered, an international study of children's literacy levels showed that England has fallen from third to 15th place since 2001. Scotland has fallen from 14th to 26th.

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No wonder then that so many parents despite the massive taxes they pay into the state system are desperate to go private if they possibly can. The problem is that, increasingly, they can't. School fees have risen 13% in the last year alone, with the average day school now costing just under £10,000 (of post-tax income, let's not forget) and the average boarding school costing £22,000. Add it all up and if you have four children to educate, you aren't going to see much change out of £1.5m, says Barclays Wealth.

Clearly, this means an awful lot of savings, or, failing that, a few nasty personal loans and a lot of remortgaging. But if you really can't come up with the money when you need it, you have to find ways to cut the cost.

The best way to do this is to look for bursaries and scholarships. Most schools offer them: some will pay 100% of the school fees for very gifted children and anywhere from 15% up even for less able children if circumstances merit it (see www.isc.co.uk for details).

The next best way, recruitment consultant Heather McGregor told The Times, is just to pay as much as you can upfront. Wellington offers a discount of 4% on lump sum advance payments equivalent to 6.6% for a top-rate taxpayer (if you had put the money in a savings account you would have had to pay interest on the income) and girls' school Roedean offers 4.5% (7.5%).

Finally, you could give up on the UK and send the children abroad. The Sunday Times quotes the case of the Wiggins family who have sent their sons to South Africa's Hilton College. It might be far away, but with its "school spirit", out-door lifestyle, reputation as South Africa's Eton and fees of under £9,000 a year, they reckon it's worth it. For more on English schools abroad see Cobisec.org.