Good education gives your child or grandchild more options in life. With the more demand for better education inevitably costs are driven upwards. Think about these figures:
- Average annual cost of sending one child to an independent school – £17,232
- Total cost of private education – £254,008
- Total cost of secondary school education – £164,151
Pretty staggering figures and we haven’t factored in university education, or indeed the hidden extras such as school trips. With good financial planning, however, and depending on your circumstances these figures are not insurmountable.
Good Financial Planning to the Rescue
Despite school fees rising and average incomes falling, a good financial planner can work their magic and help select the right investments for maximum growth and to min. Similarly if grandparents are involved, a sound financial planner can use the right investment models to minimise tax liabilities.
Working with your Financial Planner
It is important to establish when your children or grandchildren will start private education. This will help make you your plan. So, if your child is a baby and you’re planning their private education to start at aged eleven, your financial planner will be able to look at your current finances and your objectives and find investments to ensure you can fund it.
It is strongly advised you start investing for your child’s future today.
Similarly if you’re planning to put your child in private education at an earlier age, this will shape investments differently.
Often your financial planner will use cash flow modelling systems to predict aspects such as rising salaries, inflation, and investment growth. This will come together to give you the bottom line figure of how much you need to save.
Grandparents and intergenerational planning
Intergenerational planning is where finances are managed across the generations, and wealth is passed on to younger generations to help them have a better quality of life. When done well this can pass on wealth when the family needs it, avoids inheritance tax, and older generations get to see their family helped financially.
That said it is advisable that should grandparents pay for educational costs they do it directly to avoid tax issues.
Choose investment vehicles with care
There are plenty of investment vehicles around for children but not all are suitable for education. If the investment cannot be touched until they are 18, that won’t be much help if you want to use the proceeds when they are eleven. This emphasises the need for a good financial planner.
Let’s get your child educated
It is strongly advised you start investing for your child’s future today. The power of compound interest cannot be overstated. To plan for your family’s education click here and complete the Call Back Service Form. Give your child the best possible start in life.
Source: Financial Planning Matters