How do you Agree Your Child’s Future Education together?

October 23, 2017 by Sue McArthur

How do you agree your child’s future education together?

Co-parenting following the breakdown of a relationship can bring with it a number of challenges for parents. One subject that is likely to be close to the hearts of all parents will be the matter of educating their children perhaps through to the end of university education. Can you agree your child’s future education together?

Discussing these issues and expectations in a supportive environment following a relationship breakdown can ensure that both parents reach the best possible outcome for their children.

The Collaborative Law process can provide a forum to have open conversations about a child’s education, where they should attend, how the costs will be paid and by whom!

The cost of education

Education, as every parent knows, can be a costly business. The average cost of sending a child to private day school is now over £14,000 a year.

 University tuition fees alone cost up to £9,250 a year. Add in maintenance costs for the likes of food and rent and the expense of a university education can soar.

Many parents are happy to make financial sacrifices to ensure their children receive the best education. What they are buying for their offspring isn’t just academic excellence, but world-class sporting, drama and other facilities, as well as a solid preparation for a fulfilling later life. On top of that, nobody wants their children to leave university saddled with debt.

School fees have soared in recent years. The average overall fee for private education, excluding nursery fees, increased by 3.5% between 2016 and 2017. This was the lowest annual increase since 1994, but still outpaced inflation.

Average day school fees are now £13.419 a year. The average boarding fee in 2017 was £32,259 a year3 60% higher than a decade ago.

Headline fees are not the whole story. Bespoke school uniforms, musical instruments and potentially expensive school trips can significantly add to the already substantial costs.

 Chart 1. Average school fees (excluding nursery fees)

 

Age group  Boarding fee Day fee (boarding schools)  Day fee (day schools)  Day fee (average)  Overall average fee
Sixth form £11,243 £6,791 £4,846 £5,277 £7,304
Senior £10,618 £6,325 £4,701 £5,002 £5,943
Junior £7,850 £4,788 £4,172 £4,223 £4,290
Overall £10,753 £6,043 £4,473 £4,702
 % change 4.1% 3.7% 3.6% 3.5% 3.5%

Source: ISC Census and Annual Report 2017, 28 April 2017

 University challenge

The pressures don’t end once your children reach the age of 18. University tuition fees for courses beginning this September are up to £9,250 a year and few universities charge less than this maximum.

Living costs – accommodation, food and so on – still average £12,160 a year, according to the National Union of Students.

State-sponsored loans exist to cover university costs, but that means many students complete their degrees heavily in debt. Interest starts to accrue on the money your child borrows from the moment it arrives in his or her account. Students graduate with average debt of £44,500, according to the Sutton Trust.

Student loans are not loans in the conventional sense, as repayments are linked to how much the graduate subsequently earns. Unlike a mortgage or bank loan, if isn’t repaid after 30 years it will be written off.

However, during those 30 years, being heavily in debt can severely narrow opportunities. It makes getting on to the property ladder harder, making it more difficult to save for a deposit and get a good-value mortgage. By reducing take-home pay, student debt also hampers the ability to save for the future.

How much will you need to pay?

This is the first question you need to ask when building a school and university finance plan. Establishing how much you are likely to need will involve estimating costs and taking into account inflation perhaps decades into the future. This can of course seem daunting however it is necessary if you want to be fully prepared for what is ahead.

If school fees increase by an average of 5% a year, it will mean fees per term could double from the time your child first starts primary school to when they finish the sixth form: better to be prepared, than potentially put your children’s futures in jeopardy.

Collaborative Law

The above information highlights the need to plan and agree how these commitments are to be met. If you are going through a relationship breakdown and would like to ensure that your children’s education needs are a priority, then you can do this by committing to the Collaborative Law process.

Your Collaborative family solicitor in conjunction with a Financial Planner acting as a neutral professional, can ensure the requisite consideration is given to this matter. You as parents can decide to allocate appropriate financial resources to ensure that the educational requirements of your children are agreed and met.

The good news is that the cost of education need not be a financial burden with careful planning.

At Brewin Dolphin, our experts can work with you during the collaborative process to develop a tailored education fees plan. We will do the hard work, building an action plan that makes the most of the resources available to cover education costs.

Fiona Newborough (FCSI – Chartered Wealth Manager) & Michelle Chambers (Chartered Financial Planner) Brewin Dolphin

fiona.newborough@brewin.co.uk

The value of investments can fall and you may get back less than you invested.

 The above information is for illustrative purposes only and is not intended as investment advice.

 The information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.

 The opinions expressed in this document are not necessarily the views held throughout Brewin Dolphin Ltd.