Saving for School fees as an Expat
By Antler Wealth Management
June 2024
In our experience we find that most of our expat clients plan to return to the UK and educate their children from secondary school onwards. Therefore, we spend a great deal of time helping expats plan for their children’s educational costs which can sometimes be over 10 years down the line!
It is more important than ever to start planning early as UK private school fees and university costs are constantly on the rise. Potentially the VAT exemption on private school fees will also be removed which will add an additional 20% (VAT rate at of June 2024) to the term bill…
So how should you start planning?
Calculate the cashflow.
Likely you will already have a fairly good idea of where in the UK you are likely to move back to and can therefore research the local private schools and get an idea of the annual fees. This is step one – know your target.
Once you know your target you need to understand how much you need to save now and/or on a regular basis to meet the school fees until your child’s graduation. This is where we can step in and help. We use intelligent cash flow modelling which will account for inflation, investment growth, school fee increases, your existing assets and provide you with the figure you need to be saving for your children to meet the education goal.
Once you know your figure you can plan properly, adjust your spending patterns, and potentially ask family for help if they can.
Investment Structuring
How you structure the investments will depend on a number of factors such as where you are currently resident (what is the most tax efficient route given your country of residency), the timeframe of when you expect to repatriate and your overall asset base which will influence your investment structuring once you return to the UK. Depending on your wealth you may also want to look at trusts to assist with the school fee planning.
The good news is that regardless of your current residency it is likely we can help you set up an educational fund which will accumulate gross of taxation and provide various tax planning opportunities once you return to the UK.
Investment Risk
It is quite easy to be overly cautious when planning for our children’s financial wellbeing and whilst being cautious might feel safer it could also mean that there is very little chance of you meeting the school fee requirement. To protect our clients, we also use cashflow modelling techniques, so you understand the required annual rate of return needed to achieve your educational school pot goal.
Summary
The key is to plan early and understand what your offshore savings requirement is. We can help you with this so please feel free to contact us at antler@sjpp.co.uk for a no obligation video consultation to discuss school fee requirements and calculate your investment requirement.
Antler Wealth Management
A division of St James’s Place (Singapore) Private Ltd
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
Antler Wealth Management Limited is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority).
