The rising cost of private education
The results are in — and for some families they make difficult reading. Not the A-level results. I’m talking about our annual analysis of private school fees.
In brief, the average cost of privately educating those just receiving their A-level results ranges from £216,000 for 13 years at a day school to more than £438,000 at a boarding school.
Putting last year’s application of 20 per cent VAT to one side, fees have typically risen by 1 per cent above inflation each year. So, looking ahead, let’s assume generously that the government manages to hit its 2 per cent inflation target for 13 years and that fees again increase by 1 per cent more than inflation a year — meaning they would rise by 3 per cent a year.
This means that those starting a child on the journey in September can expect to pay £393,500 for an average day school, £512,000 for a day pupil at a boarding school and £797,000 for a boarder. Schools such as Eton and Cheltenham Ladies’ College will charge a lot more.
And none of these figures includes the cost of uniforms. Few schools require Eton levels of uniform — black trousers with white pinstripes, collarless shirts with detachable collar and collar stud, tie, waistcoat and tailcoat, plus lounge suit and warm-weather blazer and optional lightweight waistcoat — but it all adds up, wherever you are.
Don’t forget music lessons either, at several hundred pounds a term. Or the instruments. I’m still getting over the cost of my son’s trombone.
How grandparents can help
There is a real challenge here for grandparents who have put their own children through private schooling and want the same benefits for their grandchildren. How best to help?
For many grandparents this is a favoured way of passing on wealth. They have control over how the money is spent, and a good education is deemed a worthwhile gift. But think carefully before committing.
Plan carefully before committing
Understand the costs. If you assume that things are not much different from when you put your own child through the system, you’ll be giving a fraction of what’s necessary — and that’s why these numbers are important.
Making gifts tax efficient
Make your gift tax efficient. Each grandparent can give £3,000 a year without affecting your inheritance tax (IHT) allowances (unchanged since the early 1980s, when I started working). You can use last year’s unused allowance for the first payment, so that’s £6,000. Over 13 years that’s £42,000 each in the kitty.
Affordable gifts out of income are IHT-free too. But you should make them regular, log them carefully and be able to demonstrate to HM Revenue & Customs that they’re not affecting your own lifestyle.
You might consider putting gifts out of income into a trust for one or more grandchildren to draw on. This protects the money in the event of a divorce or bankruptcy.
Distributions from a trust will be treated as the child’s income, so use their personal tax allowances — including the £12,570 nil-rate allowance — rather than a parent’s, whose income will probably be much higher. You’re limited to what you can contribute to a trust if you can’t make gifts out of income, because contributions give rise to a 20 per cent entry IHT charge on anything over the £325,000 nil-rate band (£650,000 for couples).
But this is a bit of a Doctor Who IHT allowance — every seven years it regenerates and you can add again if you wish.
Protecting the commitment long term
Consider your own longevity. If your contributions are ongoing, you need to think about what would happen if you or your partner dies or needs expensive later-life care before the schooling is finished. How might that affect your ability to pay? It might mean making clear provisions in your will for your commitments to be fulfilled from your estate or putting life insurance in place.
Don’t ignore inflation either. If fees were to rise by 5 per cent instead of 3 per cent, it takes that boarding school bill up to nearly £950,000. This means that any big lump sums given up front to cover fees may need to be invested smartly for a real return.
That could require you to have the immediate four or five years’ fees in very low-risk assets — like government bonds — and the later ones in equities, with the money cascading down the risk ladder as each year passes.
Keeping pace with inflation
If the money is coming out of income, make sure your gifts keep pace with inflation. There are other, more general considerations. You may not know how many grandchildren you will have.
Can you make the same commitment to all? If one of your children is a high earner and others are low earners, can you support only those who need help?
Thinking beyond school fees
Might your money be better spent helping your children with the extra cash they might need to move to the catchment of an outstanding state school? Or to help with later university costs, where there isn’t the benefit of a free alternative?
Consider, too, that your children (or their spouses) may not want their own children to go to private school. Every family is different.
One friend and his wife sent both their children to state school. The grandparents contributed to an “education budget”. The children could make claims on this for anything they could argue was educational: computer equipment, musical instruments and lessons, trips, art materials, holiday courses (including scuba diving lessons in South Africa in one instance). Both girls were happy; both got top exam grades and both received offers from Oxbridge.
Supporting the next generation
Private schooling can be outstanding. It’s something many of us aspire to for our children and grandchildren. But there are other — perhaps more affordable — ways of supporting them, too.
*Featured on the Financial Times website on 15th August 2026: School fees are outpacing inflation — here’s how grandparents can help.
Clare Munro is our Senior Tax Adviser. Within her day-to-day role, she provides tax advice to high-net-worth clients in relation to their banking and wealth management needs. With a particular interest in inheritance tax and capital gains tax planning, Clare helps clients to structure their wealth tax efficiently to preserve it through family generations.
What you need to know
This article does not constitute advice. Tax laws are subject to change and taxation will vary depending on individual circumstances.