School fees

[hermanmunster]

It's monday morning TIPSY - confusion is the name of the game... one week away and they have moved all the doors and plastered some of them up!!!!!

re school fees, I think the whole planning of how they are paid is very complex - plenty of advisors out there but can they be trusted?? I had several saving policies for school fee payment, when I decided not to go down the independent route at senior level I realised that the policies would not have been much help and I would have been better on the PAYG route!! One of the problems is estimating the increase in fees over the whole time at school, bit like house prices - very unpredictable. If you do the sums with x% increase year on year for fees, the figures look awful and you tend not to quite believe it can happen, but it does!

[Loopyloulou]

Re school fees advisors, I don't think they offer anything special, just savings bonds of various varieties. The one method of school fees planning which is worthwhile is the "Composition Fee" arrangement - most schools provide this via the bursar's office. Basically if you pay the entire 5/7 years fees up front (yes, spot the obvious downside!), the school will invest the monies for you tax-free and use them to fund the fees as they fall due. So you save the 40% (soon to be 50% ) income tax otherwise payable.

[Thea]

LLL - composition arrangement has worked well for us - I worked out theat even when interest rates were at reasonable levels, by paying 40% tax on it reduced the value significantly. Our school only offered it for 3 years, no more.

[coolmum123]

Re the composition fees arrangement - how does the school know what the fees are going to be for the next 5 odd years? What happens if the fees are higher than forrecasted / there is a shortfall in your investment vehicle?

[hermanmunster]

they generally will take any amount off you as a composite fee and use it to pay the fees until it runs out, you can either top it up then or go onto PAYG

[PB Mum]

The quote we had for the composite fees (from Sept 09) was 1.1% discount for 2y, 2.6% for 5y and 3.7% for 7y. This last being the only viable return (even allowing for 40 or 50% tax relief on interest), it is currently too much to find ( not enough under the mattress), and not worth borrowing, as the interest rates won't stay this low for that period of time - we'll enquire again in a few years' time...

[hermanmunster]

The quote we had for the composite fees (from Sept 09) was 1.1% discount for 2y, 2.6% for 5y and 3.7% for 7y. This last being the only viable return (even allowing for 40 or 50% tax relief on interest), it is currently too much to find ( not enough under the mattress), and not worth borrowing, as the interest rates won't stay this low for that period of time - we'll enquire again in a few years' time...

certainly doesn't sound very generous does it! particularly as the amount for 7 years would be substantial (big mattress) and no predicting what the future economy will be like. Also lots to tie up if you don't end up using it. I took out several school fees saving policies for senior level while doing PAYG for junior, in the end I decided not to go down the fee paying senior route.

[T.i.p.s.y]

Well as I said a long time ago I would only pay a years fees in advance (if I could) and bank the rest (if I had any) because if you lose your job or fall on hard times then this money could be vital. Some schools offer hardship bursaries for current pupils who have been there for some time. I'd hate to think all that money was tied up in 7 years of school fees and yet we could barely eat or clothe the kids. I would never spank the banked lot on flash cars or extravagant living to abuse these hardship bursaries.

[SunlampVexesEel]

soon to be 50%

Soon to be 60%. NI is effectively just a form of Income Tax.

[Ed's mum]

Yippee! Heard today that our contribution to fees will remain the same for next year, even if fees increase! He can stay there next year!

Crack open the nettle wine!