Almost a third (29%) of those who are already paying for private education have considered stopping or reducing the amount they pay as a result the rising cost of living, according to new research from Schroders bank.
According to the research, with over 600,000 children returning to school, many parents are likely to be anxiously calculating how they will pay the fees in the face of rising inflation and continued economic uncertainty.
And a growing number of parents, around two million, are turning to grandparents to help meet the costs. The research shows that one in ten grandparents of fee-paying schoolchildren are contributing more than £1,000 per month.
The 2011 Independent Schools Council (ISC) Census was evidence of the struggle to meet payments, as it revealed that overall pupil numbers fell by 0.2%, from 506,154 to 505,368, among the 1,228 schools which completed the census in both 2010 and 2011.
While many people have established specific savings or investments to pay for school or university tuition fees, 33% are not confident that their ‘educational fund’ will be sufficient. Meanwhile, almost a quarter of Independent Financial Advisers (IFAs) say that a significant proportion of their clients are relying on an inheritance to pay for education.
Many of those who are paying to educate their children or grandchildren privately have been saving or investing into an educational fund for some time. One in five (20%) of those with savings or investments earmarked for education started to save before the birth of their first child, while 29% did so when the child was less than 12 months old.
With increasing living costs placing an additional strain on household finances, many people are facing tougher decisions on how best to pay for school and university fees, or, indeed, whether they can continue to do so. Over 100,000 people have stopped paying for private education, and almost half a million people have reduced the amount they are contributing or spending on these fees.
James Rainbow, Schroders' head of UK marketing, said, “Parents and grandparents who have saved hard to send children to private school are seeing their finances face significant pressure as a result of rising living costs and rising inflation.
“Whilst many people start saving or investing for education when their children are very young, it’s surprising how many have made inadequate provision or are relying upon an inheritance.”