For many parents and grandparents, helping the next generation get the best possible start in life is a major priority. Whether you’re considering private school fees, university costs or simply building a financial safety net for your children or grandchildren, education can be one of the most rewarding investments a family makes.

It can also be one of the biggest.

With private school fees now generally subject to 20% VAT, and university costs extending well beyond tuition fees, planning ahead has never been more important.

Start with the real cost

The first step is to understand what you’re actually going to need to fund.

For private school, this could include registration fees, deposits, uniforms, transport, meals, trips, sports, music, technology and examinations, as well as the school fees themselves. Since January 2025, private school education and boarding services have generally been subject to VAT at 20%, so it’s important to work from your school’s current fee schedule.

University costs can be just as varied. Alongside tuition, families may need to consider accommodation, food, transport, books, equipment and travel home.

Rather than simply multiplying today’s costs by the number of years remaining, consider how fees and living costs could increase over time.

How will you fund it?

Once you have an idea of the likely cost, you can start thinking about how to fund it.

This could involve a combination of regular savings, investments, income, bonuses or contributions from grandparents and other family members.

The right approach will depend on how soon the money is needed. Money required in the next few years may need to be held differently from money that won’t be needed for a decade or more.

Tax-efficient options, such as ISAs and Junior ISAs, may also form part of the strategy. However, it’s important to understand how different options work. For example, money held in a Junior ISA belongs to the child, meaning they can take control of the account at 16 and generally access it from 18.

So, the most tax-efficient option isn’t necessarily always the most suitable.

Don’t forget about your own financial future

It’s natural to want to prioritise your children’s future, but education planning shouldn’t come at the expense of your own.

Before committing significant amounts towards school or university fees, consider your emergency savings, mortgage, retirement planning and protection needs.

Using every available pound to fund education could potentially leave you with a shortfall later in life. A balanced approach may mean funding education alongside your own longer-term financial goals.

At Ward Goodman, our financial planning and investment services can help you look at education funding as part of your wider financial plan, rather than as a standalone expense.

Could grandparents help?

Grandparents can also play an important role in education planning.

They may choose to pay fees directly, make regular contributions or provide a lump-sum gift. For some families, regular gifts from income can also form part of wider Inheritance Tax planning, provided the relevant conditions are met.

The important thing is to consider the wider family circumstances before making significant gifts and keep clear records of what has been given.

Keep the plan under review

An education funding plan shouldn’t be something you set up and forget.

School fees can change, investment values will fluctuate and family circumstances can evolve. University funding arrangements are also changing, so a plan that works today may need to be adjusted in the future.

Reviewing your strategy regularly can help you stay on track and make changes before costs become a problem.

Giving their future a financial head start

Planning for education isn’t simply about finding the money to pay the next bill. It’s about creating a strategy that gives you confidence you can support your children or grandchildren while still protecting your own financial future.

Starting early can give you more options and greater flexibility.

If you’re considering how to fund school or university costs, Ward Goodman can help you understand your options and build education funding into your wider financial plan.

Plan early. Review regularly. Keep the whole family’s financial future in view.

To find out more contact us today on 01202 875 900 or www.wardgoodman.co.uk/contact