School Fees Planning Frequently Asked Questions

Questions about SFIA

General Questions about School Fees

Fee Planning Questions

Questions about SFIA

Why do I need school fees planning advice?

Having decided to educate your child/children independently is it important to take appropriate advice to ensure the continuity of their education.

Good advise will reduce the cost of education by as much as 50% and ensure that your child completes their independent education regardless of a change in circumstances.

Parents must be fully aware of the financial implication and be confident they can afford the fees throughout the selected term. If the costs of an independent education are not planned properly it could prove serious for both the child and the parent at a later date.

Why choose SFIA?

There are many reasons why so many people choose SFIA, please follow this link to a page that decribes all of the advantages we offer.

Does SFIA fund school fees?

SFIA will save you money by finding the most cost effective plan to meet your needs.

Is there a specific plan that you use or advise upon?

Why not use my accountant or existing IFA to advise on school fees?

All SFIA advisors are fully qualified and are given further specialist training. Non specialists would not have the required expertise to forecast, plan and reduce costs.

General Questions about School Fees

How much are school fees?

Basic fees vary widely. They depend on whether schools are educating younger or older children, day or boarding and where they are situated.

Here are some typical figures (per term) for 2009.

Are there any hidden expenses?

It is important to make allowances for uniform, or books, games equipment, excursions and other necessities.

Do scholarships and grants pay for high proportion of fee?

Many senior schools and a few junior schools offer scholarships to attract bright or talented pupils to the school. They are usually awarded after a competitive examination, for academic, musical or artistic merit. Scholarships vary in value but rarely cover the whole fee; they might be worth as little as 10%.

Many schools also have bursaries - grants from the school - to help you pay the fees. These are often awarded after a 'means test' of family income.

Some schools offer grants to children of clergy, teachers and armed forces personnel. Others give help to children of former pupils, single parent families and orphans or concessions for brothers and sisters. You should contact schools to find out the details and how much awards are worth.

What is the child trust fund?

Child Trust Funds (CTFs) became available in January 2005, with the government saying they would be issued by April 2005 'at the latest'. Each child born on or after 1 September 2002 will receive an initial lump sum payment of £250 (£500 for poorer families) from the government. A voucher will be sent to the Child Benefit claimant, usually the parent, which is then used to open a CTF account with the provider of their choice, likely to be a bank, building society or investment company.

Fee Planning Questions

Are there any tax concessions available with school fees payments?

Unfortunately previous covenant schemes have all been abolished therefore we need to consider all remaining opportunities such as:

• Children’s annual income and capital gains tax allowances
• Annual tax-free investment allowances
• Trust planning
• Options to re-assign life policies and investment bonds
• Tax-free returns available through offsetting against a personal mortgage
• Opportunities available through offshore investments

How am I able to save 50% off my school fees?

You are able to save alot of money by careful long-term planning. We can help you realise significant savings by advising you on this. Register your interest for free consultation via our enquiry form.

The fees seem high, will I have to choose a cheaper school?

This is not necessarily the case. SFIA will design a plan to meet your budget.

SFIA has designed bespoke software that allows them to design and amend school fees plans. SFIA has its very own comprehensive school fees database. We use the actual fees from a particular school when designing our plans. SFIA’s administrative team is there to ensure that you receive the right amount of money at the right time.

How could I spread the cost of my payments?

It may be possible to set up an efficient draw down of capital secured against your property to spread the cost of school fees over a longer year period. You only pay interest on the money that is gradually withdrawn. Your home may be re-possessed if you do not keep up repayments on your mortgage.

How am I able to best protect the payment of future school fees?

It is possible to apply for an insurance plan which will pay a monthly tax-free benefit in the event of death or diagnosis of a critical illness. The cost of this cover will depend on the level of the benefit, your age and state of health.

How do I get a bursary, scholarship or grant for my child?

You can contact specific schools about scholarships. We have compiled some useful links regarding funding.

How do I cover the shortfall in savings plans that have not performed as well as I had expected?

This is where personal financial advice is particularly important. The answer to how best to cover a shortfall will depend on your personal circumstances.

What is the secret of Planning for school fees?

The secret of paying school fees is to plan early. Money invested in insurance policies when your child is a baby will provide tax-free sums. Even as little as five years before your child is due to go to school, there are investments which will help to reduce the financial burden.

Have I left it too late?

If you haven't built up enough funds in advance, the alternatives are to pay-as-you-go out of income while your child is at school, or borrow to repay later once they have left. Most people end up using a combination of methods, especially once two or more children reach secondary school, or begin to board.

What are the main factors that determine a good plan?

Every family is in a different position, but the biggest single deciding factor is not the level of fees but the length of time available to build up a fund to pay those fees. Some of the factors that we are fully aware of and will ensure are:

• Is it good value?
• Is it safe?
• It is low risk?
• It is tax efficient?
• What are the hidden costs?
• It is timely?
• Is it flexible?

Should I release equity or take out a loan?

If you own your home, then you may be able to release equity from its value. Alternatively, you may need to borrow money as a secured or unsecured loan. Either way, contact SFIA who will help you take the most effective route.