I asked my father-in-law many years ago how on earth he managed to privately educate all four of his children. He replied with a wry smile, “We had to beg, borrow and steal.” School fees have risen by almost 40% over the past five years. (In London the cost of sending your child to private school rose by 5.8% this academic year to an average of £3,827 a term.*) This, combined with the credit crunch, has made it increasingly difficult to fund fees out of everyday income, although so far the recession does not appear to have sparked a mass exodus from the private sector.

Scholarships
Scholarships are a varied species ranging from sporting to music, art, drama and even technology. It is rare to find a full scholarship these days; schools generally offer 10–50% and some are only honorary. “The best way to ascertain availability and eligibility is to contact the school directly,” says Liam Butler, ISC Information Officer. Increasingly there is a trend to move away from scholarships and into bursaries. “Why give financial help to the most talented when you may be giving it to families that don’t really need it?” questions Tim Meunier, Headmaster of Colet Court, the prep school of St Paul’s boys school.

Bursaries
Bursaries are means tested and, in general, awarded to children with high academic or other promise, although some are awarded on social need alone (contact the Joint Educational Trust (JET) jetcharity.org. Parents will have to fill out a financial declaration and bursaries awarded are reviewed annually. There are awards for military personnel (HM forces bursaries), clergy, siblings of pupils already in the school, as well as teachers’ family bursaries for children of those teaching in the school itself.

Deferring fees and payment schemes
If you are having trouble paying the fees then the key advice is to talk to the school as soon as possible. “If someone loses their job, for instance, we may be able to consider a short term arrangement until the parents are in a better position to pay,” says Maureen Bosch, Head of Communications at the Girls’ Day School Trust (GDST). Most independent schools ask parents to pay each term but some are happy to be paid in monthly instalments. Boys’ prep school Northcote Lodge in Wandsworth Common gives parents who pay their fees early (usually a few days after each term finishes) a small discount on their fees.
Ask the bursar what payment methods the school has.

Buying in bulk
Many schools automatically give discounts if more than one child from the same family goes to the same school. A number of London private schools give discounts of between 5–20% so find out when you go to visit the school. For example the St James School group in West London operates a sliding scale offering parents a 5% discount for 2 children at the school, 10% for 3 and 20% for 4 or more.

Time to save
If you have time to save up for school fees then it’s definitely worth getting advice from an Independent Financial Adviser. There aren’t any investment trusts that specifically cater for the school fees market and it is much better to have something that fits your needs. Firstly, parents should ask themselves what level of risk they are prepared to take. With interest rates so low at the moment putting your cash into building societies and banks is certainly safe but not going to give you much growth. “Once your risk level is established you can save as little as £25–50/month with any unit trust and it will make a difference,” says Kevin Tooze director of Equity Partners (equitypartnersuk.com). ISAs are the “best vehicle for most parents as the growth within the plan is tax free and so are the proceeds,” adds Tooze. If you have used your ISA allowances, consider investments that are chargeable to capital gains tax. “You can make a gain of up to £10,100 on for example a unit trust or investment trust and put this profit towards school fees,”  says Tooze. This allowance is annual and applies to children and adults.

Pay in advance
If you’re in the fortunate position to have some spare cash and want to pay for your child’s school fees in advance then get in touch with the school’s bursar to find out what discounts they have on offer. “Some schools may be able to offer a discount and there may be substantial savings over time because of fee inflation,” says David Hanson CEO of the Independent Association of Prep Schools. You can generally pay lump sums prior to entry or at anytime during your child’s time at the school. But Tooze warns: “Make sure you can get your money back if your child changes schools, gets ill or the school goes bust!”

Ask your parents
Why not ask Granny and Grandpa to help? Grandparents can often invest more tax efficiently than parents and help cut their potential inheritance tax (IHT) liability.

Find a cheaper school
The New Model School Company, founded in 2004, aims to be the “no frills” of the private education sector. At £1,711 a term parents are queuing up to get places at Maple Walk in NW London, says Headmistress Sarah Knollys. “We keep the costs as low as possible by not having high property overheads and using local facilities,” says Knollys. Children follow a traditional curriculum plus French, music, dance, drama and PE. The company intends to open another two schools.
See newmodelschool.co.uk.

The GDST schools, such as Wimbledon, Putney and Notting Hill & Ealing, not only have an excellent academic reputation but they are also are well known for charging a lot less than other private schools. Bosch says that the GDST tends to pay for capital investment in buildings and facilities from income, not by borrowing and it doesn’t offer staff or sibling discounts preferring to channel discounts into bursaries.

DIY
If all else fails, then you could join the other 50,000 families and educate your children at home – just think of the savings you’d make! Seriously, though, you have the legal right to educate your child at home and don’t have to be a qualified teacher to do so. Government website direct.gov.uk has lots of useful information as does the Home Education Advisory Service heas.org.uk and education-otherwise.org.uk. Alternatively, wait for our ‘Home Tuition’ special feature in angels & urchins’ autumn edition.