Securing The Future

Careful and timely planning are the key to managing the financial commitment of private school fees, says David Patterson, of Patterson Wealth Management Ltd.

The choice to go down the private education route is a big one financially. For the lucky few, school fees planning is unnecessary but for the vast majority, spending many thousands per year per child for up to possibly 13 years can be a daunting prospect, creating enormous financial challenges.

David Patterson, Director of Patterson Wealth Management Ltd, a senior partner practice of St. James’ Place Wealth Management, says that early and careful planning and structure are essential, “We work with families to help organise their finances so they can have what is most important to them in their lives.”

He speaks from experience, having worked in this area for 25 years, and knows that education can be key in family finances. “Education trumps housing these days,” he notes. “How we educate our children has become absolutely fundamental in life. For families, especially young families just starting out, how to fund education is the big issue – it dominates thinking”.

When clients go to talk to PWM – and there is no charge for the first detailed conversation to assess your position – David’s aim is to reach an understanding of the family’s finances and aspirations. “You can never start planning too soon,” counsels David. “Finding the right school is competitive, so many families will be thinking early on where they might like their child to go, at least for pre-prep and prep”.

A long term plan might be more vague but if private schooling is on your list of criteria, then talk sooner rather than later. “First we talk to our clients: where do you see yourselves in five years? How many more children do you want? We will look at the assets you have and your earning potential, the benefits your current job offers – does  that all work? Do you have enough today,
and will you have enough income to afford private schooling and still do the things you want to do as a family – holidays, house, mortgage?” And all of this is so important to take into account, says David, because once you’re committed to private education, it’s almost impossible to stop. “Having to leave a school you’ve settled into, whichever stage you may be at, is disruptive for the children. So can you realistically afford up to 13 years of fees or is five years more achievable?

When you initially meet the small team at PWM Ltd, you will discuss whether it is practical, are there family resources or savings to meet the need? “Talk to parents, grandparents and even great-grandparents,” suggests David. “Senior generations are highly motivated to pass on money in this way now. How much more of a family legacy is a fund to support education than a pension pot?” This is why it’s important for David to have family-based discussions – it’s usually a decision for more than one person to make. “There’s no doubt this is an expensive project all the way up to and including university, and each family’s position will be different.”

If the private education route is a feasible one, PWM uses software to build a model of your plan. David explains: “We know your resources, now let’s see how this might work. Our job is to help get
those pots of money in the right place, gaining appropriate growth with the least risk”. This might take the form of equity release, ISAs, and grandparents giving funds to educational trusts. “We work with people over a long period of time, through changing markets, changes in jobs or careers, and we help them carve out the money for education.”

Also key is the little-talked-about subject of death. “In the worst case scenario, we need to make sure your education fund goes on. Families need wills and powers of attorney in place so that the money ends up in the right hands if tragedy does strike,” advises David.

School fees should be ring-fenced within the estate in a trust administered by the spouse so that schooling is unaffected. To have to leave a school after the death of a parent, with its support network of teachers, friends and counsellors, would be another terrible blow. “People forget that Death in Service cover might pay off the mortgage, but would it cover everything else too?”

At PWM Ltd, a highly personal service is on offer. With St. James’ Place Wealth Management guaranteeing the advice, ensuring a backstop so no mistakes are made and all regulations are met, David and his team can give you advice appropriate to your needs. “We will devise a well-defined plan, show you how we will maintain it, and then review and adjust over the years.

Being proactive, with the right low risk investments, is the best way to master the challenge of school fees”.

Ultimately, you may decide to move to an area with great state schools but the key is to start early enough with good planning, to understand what you and your spouse want, and then we can work out what resources we can deploy to help with that plan, including minimum taxation and having the right protection in place.”

Patterson Wealth Management Ltd is not there to say no, but to show you what the next several years might look like and to help you put in place a successful means to make your financial future work for you and your children.

The Partner Practice represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose
of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website The
‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives. Patterson Wealth
Management Limited is registered in England and Wales, Number 08268067. Registered Offce: Lynton House 7-12 Tavistock Square, London, WC1H 9LT.

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