The cost of private school (age 4-18) is now over £300,000 per child, with most parents paying an additional £200,000 in income tax.
A School Fees Plan will show you how to fund your school fees efficiently, without neglecting your other long term financial goals.
There are often many alternative ways to fund school fees which can also facilitate your other financial goals. Improving your tax efficiency for example, will have a major impact on your long-term wealth.
Whether you consider yourself in a good financial position or not, we believe every parent can benefit from a school fees plan.
Paying for education
On average, private school fees can range from £15,000 – £30,000 per child per year. This is a significant sum of money and this is before they consider university and other further education costs.
Setting up a trust may be ideal for those parents or grandparents who may wish to save money over a period of time to fund these expenses or if they wish to transfer a lump sum as part of their estate planning.
The Office of National Statistics reported that in England in April 2020, 89 per cent of deaths due to Covid-19 was in the 65+ age group.
Therefore, it wouldn’t be unreasonable to assume that grandparents falling within in this age category could be thinking about providing for future generations.
What type of trust should I set up?
So it is important to consider the type of trust to suit the needs of the family.
Different trusts have different tax consequences. Beneficiaries’ rights to the income and capital of the trust fund will also differ among different trusts.
There are three main trusts which could be appropriate in setting up a trust to fund a child/grandchild’s education.
- Bare trust
- Discretionary trust
- Interest in possession trust
Please contact us for more details.