Can I afford to send my kids to private school?

Private school fees have shot up in recent years and Labour plans to scrap tax perks if it wins the general election. How big a bill are you looking at?

Three schoolchildren doing sums on the board.
(Image credit: XiXinXing via Getty Images)

Private school fees have been in the spotlight in recent months, with Labour promising to scrap tax perks if it wins the 4 July general election

Eligible education bodies, including private schools, are currently exempt from VAT, which keeps charges down for parents. However, any change to this policy could see school fees soar by up to 20%. 

This would come on top of other, inflation-related increases parents have already suffered in recent years. The latest figures from the Independent Schools Council (ISC) reveal that fees for the 2023/2024 academic year increased by 8%, on average. 

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Against this backdrop, we look at three key questions. How much does private school cost? How much further could fees rise? And how much do you need to earn to send your children to private school? 

We also delve into some strategies parents can take if they are struggling with the rising cost burden. 

How much does private school cost?

The latest ISC census reveals that private school fees amount to £18,063 per year for the average day-school student. This increases to £23,925 for day pupils attending boarding schools, and £42,459 for the average boarder.

Of course, these figures vary depending on the school and region of the country. They also change slightly depending on the age of the child. 

The most expensive region to send your child to private school is London, while the cheapest region is Yorkshire and Humber for boarders and the North West for day pupils. 

It is also worth remembering that some of the most exclusive schools in the country bring the average figures up. For example, attending Eton college will cost you almost £50,000 per year. Likewise, boarding at Cheltenham Ladies’ College will cost you £48,600 per year. 

Smaller, less well-known schools often come with considerably lower fees while still boasting a strong educational track record. Nevertheless, sending your child to private school remains an enormous financial undertaking. 

Imagine average fees remained frozen at their current level – an unlikely prospect. Even then, you would be looking at a total bill of around £126,000 for sending your child to a private day school between the ages of 11 and 18. 

In the real world, fees tend to rise each year in line with inflation – and parents now face the prospect of being slapped with an enormous VAT bill too. A recent survey from the Saltus Wealth Index suggests this could result in as many as one in four parents pulling their children out of private school. 

How much further could fees rise?

We asked Jason Hollands, managing director at wealth management firm Evelyn Partners, to dig into the numbers.

He said: “Given the history of school fee inflation, it would be wise to make some assumption fees will continue to rise next year, plus factor in the prospect of 20% VAT on top.” 

“Below shows an estimate of what ‘average’ senior school fees could be next academic year in the event costs inflate by 5% (which is possibly too conservative) plus 20% VAT is added.”

Swipe to scroll horizontally
Header Cell - Column 0 Boarding schoolDay pupil at boarding schoolDay school
Termly fees (2023/4)£13,954£8,287£6,363
+5% inflation£14,652£8,701£6,681
20% VAT£2,930£1,740£1,336
Annual cost£52,746£31,325£24,052

Source: Evelyn Partners. Termly fees sourced from ISC.

Hollands points out that an annual cost between £24,000 and nearly £53,000 is a “formidable sum” to find out of taxed income.

How much do you need to earn to send your children to private school?

Based on the above figures, Hollands says that a parent with a child at boarding school would need to earn £73,000 before tax. This would cover tax, National Insurance and the school fees, with nothing else to live on. 

“Of course, in reality someone would need to earn a lot more to be able to live,” he adds, explaining that the situation is even more complex for high earners, as they are taxed at 45% and begin to lose their personal allowance once they start earning more than £125,000. 

“Someone earning £250k will have a post-tax and NI take home pay of £144,286 – this means that if they have two children at boarding school, the fees will eat up 73% of that leaving a very modest sum to live off.”

As far as parents are concerned, this means building up a “substantial financial war chest”. Even the highest earners will struggle to fund these expenses out of income, Hollands explains. 

He adds: “In reality, it is often asset rich grandparents who end up helping finance private schooling, gifting assets that would otherwise eventually be subject to Inheritance Tax on their estates on death.” 

“There will be a lot of frank conversations going on within families at the moment who want to avoid having to withdraw their children from private schools due to Labour’s VAT plan.”

What can parents do if they are struggling to pay rising school fees?

In a recent MoneyWeek article, we shared four strategies parents can consider if they are struggling with rising school fees and the threat of VAT. The highlights include paying fees up front to lock in lower prices before inflation, and reading up on inheritance tax rules to avoid any nasty surprises if grandparents are paying. 

Many parents will be considering the first measure in an attempt to circumnavigate VAT costs, if Labour wins the general election. However, it is worth pointing out that a new government could legislate retrospectively to close off this loophole.

Many schools offering upfront payment have introduced legal disclaimers to clarify that they cannot be held responsible if this happens – so make sure you bear this in mind when planning ahead.

Katie Williams
Staff Writer

Katie has a background in investment writing and is interested in everything to do with personal finance and financial news. 

Before joining MoneyWeek, she worked as a content writer at Invesco, a global asset management firm, which she joined as a graduate in 2019. While there, she enjoyed translating complex topics into “easy to understand” stories. 

She studied English at the University of Cambridge and loves reading, writing and going to the theatre.