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Plan early to deal with school fees
Posted on: 27th Jul 2023 by: CamOuse Financial Management Limited
Wanting your children to get the very best education is one of the most natural impulses a parent can have. So it’s no surprise that many are willing to pay big money for the privilege.
But since private school fees can be extremely expensive, how do you make sure you can afford them without putting yourself under too much pressure?
Careful planning is crucially important if you’re to avoid financial strain and stay on course to achieve your wider lifestyle goals.
Understand the costs involved
Fees are just one expense when you’re sending your child to a private school. For example, you may also have to foot the bill for extracurricular activities, textbooks and uniforms.
Different schools will also have their own fee structures and payment plans, which may affect what you can afford at any one time.
It’s therefore well worth weighing up the overall costs involved over the period you want your child to attend your chosen school, so you can start planning with an informed idea of how deeply you’ll have to reach into your pocket.
Start saving early
Once you have a clear idea of the costs involved, you’ll be able to work out how much money you’re able to and want to save. It’s really important to start putting money aside as soon as you can, so you have more time to let your pot of money build up.
You could also use this time to take advantage of interest on savings, use tax-free savings options such as ISAs, and invest money in assets that are likely to offer healthy returns.
Assess your wider finances
If you’re planning to spend a large sum of money on your child’s education, it’s important to know how this affects your wider financial situation. With that in mind, look at your finances in the round, including your income, outgoings and how much you’re putting into savings, pensions, investments and other expenses.
By looking at the bigger picture, you can clearly see what you can afford and establish how much you can realistically save without compromising on other aspects of your life – and putting your longer-term objectives at risk.
Look into different funding options
There are many funding options available to parents to help make school fees less of a burden.
For example, many private schools will offer discounts for early payments and instalment plans. Parents may also be able to take advantage of grants, bursaries and scholarships to help them get their child into a particular institution.
So it’s well worth researching what options are open to you, as this could fundamentally influence what financial decisions you take next.
Of course, taking a detailed look at your finances in order to cover such a large expense can be a time-consuming, complicated and daunting process.
That’s why it’s well worth speaking to a professional financial planner, as they can work with you to develop a sound financial strategy that reflects your needs, circumstances and objectives.
If you have any questions on how to manage your finances so you can send your child to private school, please don’t hesitate to get in touch with us.
We can help you make sure your child gets the education they deserve – and that it’s financially sustainable at the same time.
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Camouse Financial Management Limited is an Appointed Representative of Quilter Financial Limited which is authorised and regulated by the Financial Conduct Authority.
None of the information contained in this website should be considered as personal recommendation and is for information only. Should you wish to make a financial transaction we recommend that you take personal financial advice after a thorough review of your personal and financial circumstances.
The guidance and / or information contained within this website is subject to UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
Inheritance Tax Planning, Estate Planning, Small Self Administered Schemes, Trusts and Tax Planning are not regulated by the Financial Conduct Authority”
Registered address: Unit 111, Lancaster Way Business Park, Ely, Cambridgeshire, CB6 3NX
Registered in England and Wales. Registered No: 05662116.
Approver Quilter Financial Limited May 2025
Understanding the true cost to your business
Pension arrangements must be available for all employees. There are three categories of employee:
Eligible
Aged between 22 and State Pension Age (SPA) with qualifying earnings over the Auto Enrolment earnings trigger
Non-eligible
Entitled
Important Notes
- Eligible jobholders must be auto-enrolled
- Non-eligible jobholders are allowed to be auto-enrolled if they want to
- Entitled workers are entitled to join a pension scheme, but the employer doesn't have to contribute
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Qualifying Earnings lower threshold |
£5,772 |
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Qualifying Earnings upper threshold |
£41,865 |
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Automatic Enrolment earnings trigger |
£10,000 |
Minimum contribution level options:
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8% of Qualifying Earnings of which |
3% is employer's (starting at 1%) |
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9% of Basic Salary of which |
4% is employer's (starting at 2%) |
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8% of Basic Salary of which |
3% is employer's (starting at 1%) |
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(Where basic salary is at least 85% of total earnings) |
|
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7% of gross earnings of which |
3% is employer's (starting at 1%) |
Pay reference period
Essentially the frequency that the jobholder is paid e.g. monthly, weekly etc. but with reference to the tax month, week etc. therefore it may not be the same as the payroll period.
Deduction and payment of contributions
It is the employer who is responsible to calculate, deduct and pay all contributions to the AE scheme. NOTE – the first and last contributions are likely to be for less than a full pay reference period and should be adjusted accordingly.
Payroll services
It can be seen that it is very important that the payroll system synchronises with the AE scheme otherwise the employer will not be carrying out all requirements and then penalties will be incurred.
Staging date
Based on the employer’s payroll size as at 1 April 2012 and can be found at www.thepensionsregulator.gov.uk/employers using your PAYE reference. The Qualifying Workplace Pension Scheme must be registered with The Pensions Regulator within 4 months of the staging date.
Compliance and communication
Postponement
Auto-Enrolment can be postponed for up to 3 months:
- For current eligible employees
- For workers that meet the criteria in the future for the first time e.g. avoid joining temporary or lower paid workers
Opt-Outs
All eligible employees must be auto-enrolled, but can, with the correct notification, opt-out within one month of joining the scheme and be treated as never having joined. They can opt back in and will automatically be auto-enrolled every 3 years in any case!
Communication
There is a wide range of information that must be provided to all employees at certain times, such as:
- The date auto-enrolment took place for eligible jobholders
- That non-eligible jobholders have the statutory right to opt in
- Entitled workers have the right to request the employer to enrol them into a pension scheme
Salary sacrifice
Contributions can be paid by effectively reducing salary, which saves on NI contributions, but employee must choose to do this – they cannot be forced, so a contractual variation will need to be implemented.
Default investment fund
Investment Options
All eligible employees will be automatically invested into a default investment fund, which is a balanced risk fund that is “life styled” to account for the employees approach to retirement. They also have the option to invest in a wide range of funds of their choosing.
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