Instalment plans for private schools

Rising fees, tighter budgets

Private education in the UK is undergoing a structural price shift. After VAT was added to fees in January 2025, average day school charges climbed to roughly £7,382 per term, or about £22,000 a year, a rise of 22.6% in a single cycle. That jump outpaced the VAT rate itself, reflecting business rates, staffing, and energy pressures. For families paying quarterly, the effect is immediate and often sharp.

Boarding families face steeper numbers. Annual costs commonly sit between £35,000 and £50,000 for reputable schools, with a broader range of £30,000 to £60,000 depending on location and provision. Many schools lifted prices 9-20% across 2024-25 to prepare for the policy change, and VAT now applies to tuition, boarding, and many extras.

VAT is only part of the story - fees rose faster than 20%.

The cumulative impact matters. Over a full school career, VAT alone can add around £74,000 for day pupils and £107,000 for boarders when compounded with typical annual increases. Against this backdrop, some parents are reconsidering the independent route, reflected in a fall of about 11,000 pupils in England compared with last year. At the same time, bursary support has expanded to about £1.5 billion, now helping around 34.5% of pupils. Support is growing even as schools face tighter budgets.

Hidden costs also bite. Beyond tuition, allow for registration fees, deposits, uniforms, textbooks, meals, and activities - often £1,000 or more each year - with VAT applying to many of these extras. For many families, the question is not just affordability, but cash flow. That is where instalment plans come in: smoothing termly bills into predictable monthly payments, helping to keep financial planning under control while maintaining educational choice.

Who benefits most

Instalment plans suit parents who can afford fees overall but prefer steady monthly outgoings to large termly spikes. They are increasingly popular with higher-rate taxpayers managing bonuses, business owners with uneven income, and households balancing multiple children in private education. They can also help families bridging a gap while bursary decisions are pending or while they transition from part-time to full-time work. For those considering boarding, spreading £3,000-£5,000 monthly can be materially easier than paying five-figure terms upfront, provided the total cost and interest are understood.

Ways to spread the cost

1. 12-month school fee plans via specialist providers.

2. Personal loans arranged through a broker like Kandoo.

3. School-administered monthly schemes with third-party finance.

4. Offset mortgages to smooth cash flow against savings.

5. Salary sacrifice-like budgeting via standing orders and sinking funds.

Pounds and pence: what changes for you

Can you qualify?

Eligibility varies by provider. Most 12-month school fee plans assess affordability based on income, employment stability, existing commitments, and credit history. Some will conduct a soft search initially before a full credit check. You will generally need proof of identity, recent bank statements, evidence of income, and confirmation of school fees due. If you are self-employed, expect to provide recent accounts or SA302s. Where a school partners with a third-party finance firm, acceptance criteria may be tighter but admin can be simpler.

Kandoo is a UK-based retail finance broker. Through Kandoo, you can be matched with lenders that offer monthly payment options for school fees or personal loans tailored to your circumstances. Approval is not guaranteed, and rates depend on credit profile and loan size. If you already receive a bursary or scholarship, some lenders will count the reduced net fee in affordability calculations, improving your chances. Conversely, multiple children, boarding, and extensive extras will increase your assessed monthly outgoings, so prepare a realistic budget before applying.

Apply in simple steps

1. Check termly fees, extras, and any bursary award.

2. Decide monthly budget and preferred repayment length.

3. Compare providers and estimated total payable.

4. Prepare payslips, statements, and school fee letters.

5. Complete application and consent to credit checks.

6. Receive decision, confirm terms, and sign digitally.

7. Lender pays school - you pay monthly instalments.

8. Review annually and adjust for fee changes.

Pros and cons at a glance

Look before you leap

Before committing, map the full journey from Reception to Year 13. Consider that day fees now average around £19,000 to £22,000 a year with extras, and boarding can reach £50,000 or more. Build a margin for annual fee rises - 4% is a sensible baseline, but recent hikes were higher. Interest on instalment plans is real money, so compare the total amount payable against paying termly from savings. If you expect bonuses or vesting shares, choose a lender that permits lump-sum overpayments without penalty. Finally, ask the school how it treats late payments, what happens if your child leaves mid-term, and whether insurance exists for redundancy or illness. Being meticulous now prevents hurried decisions later.

Alternatives to consider

1. Seek bursaries or scholarships - support now reaches about 34.5% of pupils.

2. Use an offset or flexible mortgage to manage cash flow.

3. Build a dedicated sinking fund 12-24 months ahead.

4. Pay termly but automate transfers to a high-interest savings account.

5. Consider state options temporarily if affordability is stretched.

Questions parents ask

Q: Will instalment plans fully offset VAT rises? A: No. They smooth payments but do not reduce the total fee. Interest increases the overall cost, so compare the total payable with and without finance.

Q: Are many families switching schools after VAT? A: Enrolment has fallen by about 11,000 in England, indicating some movement to the state sector. Demand remains strong in early years, but affordability is tighter overall.

Q: How much could boarding really cost by Year 13? A: With current ranges of £35,000-£50,000 and typical annual increases, a full boarding career can reach high six figures. Plan for extras, trips, and contingencies.

Q: Do bursaries still exist in meaningful amounts? A: Yes. Schools now provide about £1.5 billion in assistance, and more than a third of pupils receive some help. Always ask about means-tested and merit-based support.

Q: What are typical APRs for fee finance? A: Rates vary by credit profile and provider. Expect single-digit to mid-teens APR. Look for transparent fees, overpayment options, and clear late payment policies.

Q: Can I combine an instalment plan with savings? A: Yes. Some parents fund monthly payments from an earmarked savings pot, topping up with bonuses. Just ensure emergency savings remain intact.

Ready to compare instalment options?

Kandoo can help you compare monthly school fee solutions from a panel of lenders, with clear terms and a quick, digital application. If you are comfortable with the repayments and timeline, start a soft-search today and see your options without affecting your credit score.

Small print

All finance is subject to status, affordability checks, and terms. Fees, rates, and availability can change. This guide is general information, not personal advice. Consider independent financial advice if you are unsure.