How to budget for private school fees

Why fees jumped - and what it means for you

Private school costs changed gear in 2025. The end of VAT exemption added 20% to tuition, boarding and many extras, but the final bill rose by more than that. Average day fees moved to roughly £7,382 per term, or about £22,000 a year, a 22.6% rise in one hit. Statista’s broader average across UK day schools sits around £18,456 a year, showing how wide the range is by region and school. Boarding typically runs far higher at £30,000 to £60,000 a year, reflecting tuition plus residential costs.

Parents reacted. By January 2025 England’s independent rolls fell by about 11,000 pupils, a 1.9% drop. Schools responded by boosting fee assistance: over a third of pupils now receive bursary support, with total aid at roughly £1.5 billion. Even so, the long arc is getting steeper. Lifetime fees for one child could approach £380,000 within a generation if current trends persist.

The headline fees are only part of the story. Registration, deposits, uniforms, meals, trips and guardianship for some pupils can add thousands a year. For many families, the question is not whether private education is valuable, but how to make it affordable without unravelling the rest of the household finances.

Understanding APR is not just about percentages - it is about what you will pay in real pounds over time.

This guide sets out the costs you should expect, the funding routes available and the risks to weigh up. As a UK-based retail finance broker, Kandoo can help eligible borrowers compare personal finance options to spread costs sensibly. The aim is simple: give you clarity so you can plan confidently.

Who this guide will help

If you are a UK parent weighing up day or boarding school fees for a child aged 5 to 18, this is for you. It is also relevant if you already pay fees and need to budget for the VAT-era increases and hidden extras. Grandparents and wider family looking to contribute will find practical routes to help without creating unexpected tax or cash flow problems. Whether your priority is a means-tested bursary, investing tax efficiently, or spreading payments with credit, the sections below map the choices and trade-offs.

Ways to fund the bill

1. Build a ring-fenced fees fund in cash savings and ISAs.

2. Invest for the medium term via Stocks and Shares ISAs.

3. Apply early for means-tested bursaries and scholarships.

4. Use school instalment plans or third-party fee finance.

5. Prepay multiple terms for discount if offered by the school.

6. Rebalance household budget and cut discretionary costs.

7. Seek employer support or salary exchange where available.

8. Use family gifts or regular contributions structured for fees.

9. Consider secured options like offset mortgages with caution.

10. Bridge shortfalls with an unsecured personal loan via Kandoo.

A blended approach is common: savings plus bursary support, with a modest finance facility for timing gaps.

What it costs - and the trade-offs

Who is eligible for what

Bursaries are usually means-tested and look at household income, assets and sometimes housing equity. The most generous awards are targeted at families on lower to middle incomes. Scholarships reward talent in academics, music, sport or arts and are often smaller in value than bursaries. Schools can reassess annually, so plan for awards to change.

Advance fee schemes are offered by some schools and may deliver a discount for prepayment. They require available capital and a comfort level with tying money to one institution. Instalment plans through schools or third-party providers typically require a credit check and a consistent income.

As a UK retail finance broker, Kandoo can introduce eligible UK residents aged 18 or over to a panel of lenders for unsecured personal loans subject to status and affordability. Soft searches may be used initially and will not affect your credit score. If you proceed, a hard credit check is likely. Always compare the total cost and ensure repayments fit within your monthly budget.

From plan to payment

1. Map total fees by stage and school shortlist.

2. Add extras and a 10% contingency buffer.

3. Check bursary and scholarship windows now.

4. Allocate savings vs investments by timeframe.

5. Stress test with 5% to 10% fee rises.

6. Compare instalment plans and loan options.

7. Choose a blend and set up direct debits.

8. Review annually and adjust contributions.

Weighing it up

Red flags before you commit

Fee inflation has outpaced typical pay growth since VAT arrived, and some schools raised prices again ahead of the policy. Assume above-inflation rises, not just the 20% VAT effect. Check what VAT now applies to beyond tuition, such as boarding, meals and some extras. Confirm how deposits are treated and when they are returned.

Budget in real detail for hidden costs. Uniform refreshes, sports tours, music tuition and exam fees can add £3,000 to £7,000 a year. For boarding, allow for travel and guardianship where required. If borrowing, model repayments at a higher rate and include the total interest payable. Ensure any finance does not push essential spending below safe levels. Finally, know the deadlines. Bursary funds are finite and early applicants often have the best chance.

Alternatives to consider

1. High-performing state schools plus targeted private tuition.

2. Partial private education for specific years or sixth form only.

3. Relocating to reduce fees or access stronger state options.

4. Online or blended learning add-ons instead of full private fees.

5. Specialist scholarships in music, sport or STEM enrichment programmes.

Your questions answered

Q: How much should I budget per year for a day school? A: Plan for £18,000 to £22,000 on average in 2025, but popular schools in the South East can exceed £30,000. Add £3,000 to £7,000 for extras.

Q: Are boarding costs fully subject to VAT now? A: VAT applies broadly to tuition and most boarding-related charges from January 2025. Schools vary in how they structure bills, so check the breakdown carefully.

Q: Will bursaries really offset the VAT impact? A: Many schools expanded bursary budgets, with over a third of pupils receiving some help. Awards are means-tested and competitive, so apply early and supply full evidence.

Q: Should I invest or keep cash for near-term fees? A: For fees due within three years, cash is usually safer. For longer horizons, a diversified ISA can help, but you must accept market ups and downs.

Q: Is a personal loan sensible for school fees? A: It can be, if repayments are affordable and used to smooth timing gaps. Compare APRs, total cost and term lengths. Kandoo can help you review options.

Q: Do schools offer discounts for paying in advance? A: Some do, often equivalent to 2% to 6% a year. Balance the discount against loss of liquidity and the risk of tying funds to one institution.

Ready to run the numbers

If you want a clear view of costs and funding choices, Kandoo can help you compare unsecured personal loan options from multiple lenders alongside your savings and bursary plan. It is quick to check eligibility, and you stay in control of what you borrow and when. Start with the budget you can sustain, then choose the most cost-effective mix.

Important information

This guide is for information only and is not financial advice. Finance is subject to status, terms and affordability checks. Your credit rating may be impacted if you proceed. Always verify fees and policies with your chosen school and consider seeking independent advice.