SOUTH WEST: Over one in three parents in the South-West will have to re-mortgage their home should Labour tax private education

-         36 per cent of parents in the South-West will ‘definitely’ or likely withdraw their children from private school

-         Around one in 10 will be forced to sell their property. Over 5% will have to take a second job

-         Most families will have to cut back on school trips and reduce family holidays if fees rise

-         Nearly half of local parents unable to afford to pay school fees upfront to protect against Labour’s policy

-         Schools in the South-West could do more to support parents. Only 10% offered option to pay fees in advance of possible new measure coming into force

Friday 23rd February 2024; South-West, UK: 36 per cent of parents in the South-West will ‘definitely’ or likely have to withdraw their children from private schooling should Labour win the next election and impose 20 per cent VAT on independent education, new research by Cotswold’s leading finance advisor, Ashbridge Partners has found.

Based on current ISC/IFS figures, this will push 242,000 kids into an already over-stretched state education system and could wipe out £3.98bn in fees paid to UK private schools.

15 per cent of parents in the South-West plan to move their children into state education as early as after prep school. 6% of parents in the region say that moving their child into state education will mean the money they save on VAT will be enough to afford to move their children back into private education later on in their schooling for GCSEs or A-levels.

Sir Keir Starmer’s policy to tax children’s education has been met with significant criticism from both parents and private schools nationwide, with questions over the ethics of this policy and fears that the change will make fees unaffordable for large swaths of parents. Over 97,000 parents have already signed a petition urging Labour to halt their proposal of VAT on school fees.

The research by Ashbridge Partners was conducted on 1000 UK parents with children in private education in the UK, including parents in the South-West, a region recently ranked by the ONS House Price Index as the fourth most expensive place to own a property in UK.

It found that parents across the UK will have to go to great lengths to afford the proposed increase in fees if they want to keep their children in private school. Over a third of parents in the South-West will have to re-mortgage their home (35 per cent), and around one in 10 in the region will be forced to sell their property (9 per cent) or take a second job (6 per cent). A handful of parents across the UK said they would have to rent out their spare room to cover the extra cost while over a third (36 per cent) in the South-West are speaking to a finance adviser for help.

Families in the region have said that cutting back on ‘extras’ will be a necessity with 34 per cent cutting back on school trips, and nearly a third (30 per cent) planning to cancel or reduce family holidays. Just over 15 per cent will look to trim their household bills, and 5 per cent will downsize the family car and reduce pension contributions.

Paying fees upfront

An overwhelming 96 per cent of parents in the South-West are not planning to pay school fees upfront, even though this could protect them against a rise in school fees and Labour’s measure. Nearly half of these local parents (45 per cent) said the reason was because they are unable to afford this option, while 12 per cent of UK parents would rather ‘risk it’ and see if Labour gets into power. However, Ashbridge Partner’s report found that private schools could do more to support parents in the region by offering for fees to be paid in advance. Only 10 per cent of local parents have been contacted by their school since Labour announced its plans, offering the opportunity to pay fees upfront head of a UK general election.

Mark Ashbridge, founder of Ashbridge Partners said: “It is surprising how few schools are offering parents the choice to pay for school fees upfront. Paying fees in advance may be one of the best ways to protect your finances from the risk of the rising cost of private education while securing your child’s future place in their school. It could negate the impact of Labour’s proposed VAT introduction should anti-forestalling rules not be imposed.

“If you haven’t had communications from your school on this matter, contact them to understand what options they may offer for advance payments. When considering paying fees upfront, weigh up the benefits of this against the risk of then needing to withdraw your child from that school for any reason. As our research shows, many parents are simply unable to pay in advance however, for those who can, it could be worth hedging your bets and paying a proportion of the fees in advance to manage any risk.

“If you have an attractive financial opportunity to pay upfront and you are comfortable with the risks then consider how you will fund it. Asset sales may have capital gains tax implications so discuss with your accountant before taking any action. Increasing a mortgage also requires planning and a window of time to make the necessary arrangements.

“Our research also found that around a third of parents in the South-West will seek to cash in on investments or liquidate assets to help cover additional costs on fees. This could also be an effective way to finance rising school fees where income is short or additional mortgage finance cannot be secured. Everyone's situation will be different so take advice from your finance advisor.”

Ends

Editors notes

Founded in 2012, Ashbridge Partners offers exceptional financing advice to entrepreneurs, private residential, real estate owners and family businesses, as well as landed estates. With offices in the Cotswold, Stow-on-the-Wold, and London, Mayfair, the finance firm is dedicated to helping clients achieve their financial objectives and goals through independent, strategic and impartial advice in a range of areas including mortgages, commercial loans, refinance, funding applications or early-stage start-up funding.

An ethos of collaboration at the heart of everything the team does, Ashbridge Partners provides a bespoke approach building on relationships with clients and industry partners including highly regarded lawyers, accountants and lenders in the banking industry.