Almost one in three (31%) parents sending their children to UK private schools have applied to local state schools for one or more of their children following upcoming legislation that will see VAT being added onto school fees from next year, new research has shown.
Some 23% of these parents reported that their applications have been successful, a survey of 643 parents conducted this August by Premium Credit’s School Fee Plan – which provides finance for school fees – shows.
A controversial election promise from the UK’s Labour Party, which took Downing Street in July, means that from January 1, private schools will have to pay a 20% tax on the fees they charge parents – inciting an upcoming legal challenge as independent schools move to try and squash the new policy.
Many independent schools are passing some or all of these additional costs onto parents, with experts estimating that fees will surge by an average of 10-15%.
The research found that parents currently sending their children to private schools are eyeing longer-term solutions – such as relocating to the catchment areas of certain desired state schools.
Some 28% of those surveyed said they would consider moving house while a further 6% said they had already done so.
Meanwhile, the survey results showed that other parents are looking to increase their income instead, with around 11% saying they are considering moving to a higher-paid job and 17% looking to take on additional work or a second job.
Over one in 10 (12%) said they are looking to move their children to less expensive private schools and 11% said they are looking for financial help from their families to help with fees. Meanwhile, 14% reported asking for family members to increase the amount they already contribute to school fees.
Around one in eight (12%) say they will look to get their children into less expensive private schools while 11% have asked grandparents and other relatives to start helping. Around one in seven (14%) have asked grandparents and other relatives to increase the amount they already give.
The money lent through Premium Credit’s School Fee Plan, which allows for spreading the costs of school fees, was roughly a quarter more last year than in 2021, the company said. And total lending in the first three months of this year sits at 9% higher than the same period last year, with the average amount of funding through the plan now around £20,300.
The introduction of VAT on private school fees from January 1 2025 inevitably means parents reassessing financial priorities
Stewart Ward, Premium Credit
“The introduction of VAT on private school fees from January 1 2025 inevitably means parents reassessing financial priorities,” said Stewart Ward, director of Premium Credit’s education sector and head of its School Fee Plan.
“It has also fuelled demand for the ability to pay school fees monthly as people increasingly recognise that it is more convenient and in line with how consumers pay for a wide range of goods and services.”
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