“Simple things like utilising the full Isa allocations for both parents could have a real financial benefit over your child’s time at school. Equally, other longer-term savings products such as a flexible savings plan, which invests in stock market funds but allows you to withdraw the money when you need it, might also be appropriate,” she said.
While many people choose to pay school fees from income, this can be an uphill struggle. If you are a few years off paying the fees you could consider using your equity Isa allowance to save up to £11,280 a year per parent towards school fees.
The stock market route is off-putting for some, but it has compensations to balance out its risks. Those who have an appetite for risk could consider tax-efficient venture capital trusts or enterprise investment schemes. Those who are more risk-averse could consider popular equity income funds, which look for shares with good yields, providing a steady return. If you do this, you may even be able to keep the investments and pay some of the fees out of income in future.
If grandparents are willing to chip in, point out to them that there are inheritance tax benefits. Each person can give away up to £3,000 a year free from inheritance tax. This is known as the annual gift exemption and includes gifts made to savings accounts, to all types of trust (including designated accounts), child trust funds and Junior Isas.
You can set up a discretionary trust so that grandparents can give towards school fees. This is easy to do, with the income being treated as the child’s own for tax purposes. Parents cannot do this, however, as the income generated is taxed as if it belonged to the parents.
If you aren’t happy with equity investment, you could consider using an offset mortgage to pay for your school fees. This would allow you to offset your savings against your home loan until you need to use them.
Other ways of helping to mitigate the cost include ensuring that you target your expenditure on education, rather than planning to have your children in the private sector the entire time. Research carried out by Schroders showed that many were planning to put their children into private education for their sixth form. This has the advantage of giving you plenty of time for financial planning.
However, it is not the only way to do things. Many parents choose to send their children to a local state primary before putting them into a private day school at 11. The drawback is that they may have to pass exams, which they may not be prepared for, but plenty of people do transfer from the state sector to private at 11.
A good guide may be to ask the primary school that you are considering for a list of secondary destinations, to see if they regularly send students to private schools. It’s also worth considering tutoring for specific exams. A good tutor can cost around £45 an hour, but that’s a bargain compared with private school fees.
Those who live in grammar school areas may send their children to a private primary school and hope they pass the 11-plus. It’s a financial gamble, since you can’t guarantee that they will get through, but again statistics showing school leaving destinations should give you some guide to what will work.
If you still feel that private education is desirable but out of your league, you could consider the financial assistance offered by the schools themselves.
Many private schools have charitable status and one of the ways they keep it is by offering fee discounts to students who cannot afford to attend without them, or who have particular talents. In general, a scholarship – which is not means tested – will cover a small proportion of the fees, while means-tested bursaries will cover more.
Figures from the Independent Schools Council show that, on average, 28pc of students received some type of help from school, with the average amount being £4,239. Those receiving means-tested fee reductions received an average of £7,200 a year towards school fees, while the average scholarship was £3,110 a year.
If your child is very young you may be able to claim the Government’s Early Years Funding until he or she turns five in a private school, while there are also discounts for siblings at the same school and those in the Forces.
Be aware that if you apply for a bursary your personal circumstances will be rigorously inspected before a school decides whether to give you the discount.