Private School and an Offset Mortgage Account

yus786 · Post by **yus786** » Tue Apr 01, 2008 9:51 am

Your probably wondering what this is?

I intend to send my boys to a private school. Now like every other parent, i too will be applying for a Bursary (or part of one).

Just picked up the "Confidential Statement of Financial Circumstances - In support of an application for a Grant" Application Form.

It says on there i need to enter my

* Mortgage interest (include capital repayment as well)

Now as I have an offset account (which is like a huge overdraft; remaining mortgage plus savings)

For the sake of this application - how do I actually report the mortgage i have left?

If i ask the bank for a statement - this will be incorrect as it'll show the remaining mortgage plus any savings i have

Will they require proof? Or can they check?

Any similar experiences anyone?

Many thanks

Sally-Anne · Post by **Sally-Anne** » Tue Apr 01, 2008 10:48 am

Hi yus 786

Indeed, curiosity drew me to your post!

I hope I'm not being dense here, but if they ask you to declare savings as well, then it makes no difference? For example:

Mortgage (Account A) Â£100,000, savings (Account B) Â£50,000 = debt = Â£50k

Offset account = Â£50k

The problem is that some unscrupulous people will hide their savings for the purposes of a bursary, whereas you can't, so the school may not be comparing like-for-like. A brief explanatory letter could be worthwhile?

Sally-Anne

another mother · Post by **another mother** » Tue Apr 01, 2008 11:23 am

Indeed - we know someone who has just secured 100% means tested bursary despite being in Caribbean for 3 weeks this time last year, running two cars and wife being VAT registered! His business is currently in a bad way, they've run up big debts and they are renting but they own a property from which they get rent...

Given who bursaries should be for (and, selfishly, years of saving and the struggle now) I'm finding it very difficult to hold my tongue.

yus786 · Post by **yus786** » Tue Apr 01, 2008 11:27 am

Thanks Sally-Anne for the prompt response.

Have you heard of the term STOOZING - http://en.wikipedia.org/wiki/Stoozing?

Where we use our 0% Cr3dit Card and put the money into a high interest account, and pay it back before the 0% period ends.

OR many with offset accounts put the money into their Offset accounts to bring the interest rate down for a short period of time.

I too have built up a small stoozing pot. So the savings in my account is not really all saving but a 0% interest loan which will have to be paid back.

For the sake of the application - should i omit the stooze amount?

Will the schools require statements?

Just to clear up - stoozing is not illegal and thousands of people participate.

monstermunch · Post by **monstermunch** » Tue Apr 01, 2008 11:33 am

another mother wrote:Indeed - we know someone who has just secured 100% means tested bursary despite being in Caribbean for 3 weeks this time last year, running two cars and wife being VAT registered! His business is currently in a bad way, they've run up big debts and they are renting but they own a property from which they get rent...

Given who bursaries should be for (and, selfishly, years of saving and the struggle now) I'm finding it very difficult to hold my tongue.

It's another example of middle-classes working the system! Not that we can afford to, but if we had massive savings you can pay fees in advance to the independent school, but I wouldn't because if we ended up in trouble two years down the line we'd just get a means-tested bursary and enjoy the money in the mean time! It isn't right but this is what goes on.

Sally-Anne · Post by **Sally-Anne** » Tue Apr 01, 2008 11:45 am

Hi yus 786

yus786 wrote:Have you heard of the term STOOZING - http://en.wikipedia.org/wiki/Stoozing?

Well, you learn something new every day!

I knew that this was possible (and entirely legal) but I had never heard of the name for it.

I would be inclined to go for as much transparency as you can (even if some others won't, as "another mother" has written). I would include the "stooze" amount in the offset account, but declare the stooze as a further debt.

The school can ask for proof of anything they wish to, and you will probably find that written into the small print of the bursary. (You are not obliged to provide it of course, but I think the bursary might vanish if you refused.) Thus I think it would be best to be honest from the start, to avoid complicated explanations later that might make you sound like a tricky character.

I doubt that the school will query the reason for the 0% loan. They are not trying to judge what you spend your money on, merely how much of it you do or don't have.

I think it is even possible that a school bursar might be impressed by your prudent financial management!

Sally-Anne

Post by **hermanmunster** » Tue Apr 01, 2008 12:08 pm

Having juggled offset mortgages when developing my property empire

ho ho !!!!!!! I reckon the best thng for the OP to do would be to get a statement of the outstanding mortgage and the current interest rate of that mortgage and a calculation of what the NORMAL payments would be in the absence.

After all you should not miss out on an allownance for the mortgage interest just because you have the savings offsetting the mortgage, as it is you are missing out on the interest on the savings anyway (I know there is tax advantage doing it this way but that all gets Veeeeery complicated!!). also bear in mind that the interest rate on offsets is slightly higher than other mortgages.

Herman

KES Parent · Post by **KES Parent** » Tue Apr 01, 2008 4:33 pm

another mother wrote:Indeed - we know someone who has just secured 100% means tested bursary despite being in Caribbean for 3 weeks this time last year, running two cars and wife being VAT registered! His business is currently in a bad way, they've run up big debts and they are renting but they own a property from which they get rent...

Given who bursaries should be for (and, selfishly, years of saving and the struggle now) I'm finding it very difficult to hold my tongue.

Can't you shop them to the school bursar? - this is exactly the kind of information they like to know about. Some of them do clandestine home visits as well to see how many Mercs are on the drive - they are well aware that the richer people are the better they get at concealing assets!

another mother · Post by **another mother** » Wed Apr 02, 2008 11:03 am

Believe me - we've been tempted! But I am glad to see that someone else thinks this is just WRONG! Can't work out whether you really do, Monstermunch! I don't incidentally think you can condemn all the middle class, many of whom really struggle to pay fees but wouldn't cheat the system - this is sharp practice by those who see themselves as without any wider social responsibility.
We've supported the bursary fund precisely to get a better social mix in the school and to let people who've never had advantages, benefit. If people just can't live - as our erstwhile friends - without designer gear, wide screens and foreign holidays, I really don't want to bail them out - particularly after years of careful budgeting and making choices. Nor am I sure that I want my children educated with theirs!
I'm not sure KES mum quite how to shop them!?!

monstermunch · Post by **monstermunch** » Wed Apr 02, 2008 11:26 am

another mother wrote:Believe me - we've been tempted! But I am glad to see that someone else thinks this is just WRONG! Can't work out whether you really do, Monstermunch! I don't incidentally think you can condemn all the middle class, many of whom really struggle to pay fees but wouldn't cheat the system - this is sharp practice by those who see themselves as without any wider social responsibility.
We've supported the bursary fund precisely to get a better social mix in the school and to let people who've never had advantages, benefit. If people just can't live - as our erstwhile friends - without designer gear, wide screens and foreign holidays, I really don't want to bail them out - particularly after years of careful budgeting and making choices. Nor am I sure that I want my children educated with theirs!
I'm not sure KES mum quite how to shop them!?!

Actually I do think its wrong and I have never cheated the system, nor would I. What I was saying is that I would never pay school fees years in advance while this system is in operation, however I hope that I will be fortunate enough to pay school fees for the duration of my childrens education, but if we land on tough times then we all have a right to apply for these bursaries regardless of how we lived our lives previously. Jobs can get lost, businesses collapse but to not enjoy our means in the unlikely event that things go belly-up? - that is not living.

It is an unfortunate fact that we live in a very selfish society, and anyone who says they are not selfish when it comes to their kids is lieing. We all put our kids before everyone. Come admissions time people miraculously find God, need a rental property for investment purposes, or feel its their moral obligation to become a governer for the school they want their kid to go to. The fact that I mentioned middle-classes working the system is only because they have more knowledge when it comes to finances, tax aviodance etc. I don't know how to work the system but I know I could find out tomorrow due to connections in my partners work and people I mix with. I don't know if anyone watched the BBC2 programme about the rich last night. Thats a prime example of billionaires paying less or no tax on earnings while their working class cleaners pay more tax on their pitiful wage - the whole system is disgusting, but most people are out for themselves and will happily take what they can.