Private school fees are rising again. How to fund education.

The conversation around independent school fees has reached boiling point this year. With policy changes and VAT impacts driving costs up significantly, many high earners are suddenly feeling the squeeze. When fees jump by 20%, it breaks even the most robust cashflow models.

Paying fees out of your monthly net income is becoming mathematically impossible for many families, even those on six-figure salaries. The tax burden is simply too high.

The Grandparent Strategy and Capital Drain

This is where we have to look beyond income and look at assets. Many families are turning to grandparents for help, which can be highly tax-efficient for Inheritance Tax planning if done correctly. Alternatively, drawing down from ISAs (which have grown tax-free) is often the smartest way to bridge the gap during the high-school years.

What you must absolutely avoid is reducing your pension contributions to pay school fees. The tax relief you lose by stopping pension contributions is brutal. Education is important, but your retirement security is paramount. We need a mathematically sound plan, not a panic reaction.