subject: Why Do I Need To Plan School Fees? [print this page] Regardless of your financial situation there are always good reasons why you should plan your school fees payment. Eighty percent of parents pay their childrens' school fees directly from income. Whether the fees are readily affordable or not, this is unlikely to be the most efficient way to pay school fees. Whatever your circumstances are, the cost of school fees can be reduced.
In summary school fees planning advice will:
Maximise your wealth by taking advantage of investment, pension and tax planning
Make fees affordable by spreading the cost, minimising borrowing and maximising investment returns
Ensure continuous education for your children
Minimise inheritance tax through trust planning
Tax Planning
Tax relief is not available on school fees directly, but there are many opportunities to reclaim and minimise tax. There are many proven strategies to reduce or recover income, capital gains and inheritance tax, the proceeds of which can be put into your school fees plan.
School Fees Pension Plans
For those that qualify, Pension Plans are often the best option. By extending the time you pay your school fees, you may, frequently without any extra monthly cost, build up a substantially greater pension fund and pay off your fees. The additional tax relief gained can often be more than the original school fees.
Making School Fees more Affordable
An effective strategy for school fees planning is to plan early as this enables the build up of tax free funds.
Spreading the cost over a longer time period will also make the education more affordable and by applying tax planning offer the opportunity to increase your long term wealth.
Protecting School Fees
Having decided to educate your children independently is it important to take appropriate advice to ensure the continuity of their education.
There are products available that protect school fees payment in the event of redundancy, unemployment or accident and sickness. Parents may also build a reserve fund to draw upon in case of unforeseen financial problems.
Good advice may reduce the cost of education by 50% or more and ensure that your child completes their independent education regardless of a change in circumstances
