The cost of sending two children to a private day school will be nearly £1.2 million if Labour wins the election and goes ahead with its plan to impose VAT on school fees, research reveals today.
The report, from the wealth manager Killik, looked at a family with a four-year-old starting day school in September and their younger sibling starting in September 2028.
The bill for the two children would be a total of £1.16 million, which is nearly £200,000 higher because of the VAT, levied at 20 per cent.
The calculations assume that private school fees will rise by 5 per cent a year throughout both children’s education, although the actual increases could be higher. The average rise was 7 per cent a year between 2000 and 2009, according to Killik.
Over the whole of the children’s education, the average annual day school fees for the elder child, including VAT, will be £38,483, rising to £44,549 for the younger child. Fees are typically higher at senior school.
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If both children switched to a top boarding school from the ages of 13 to 18, the total bill would reach as much as £1.75 million, the report said.
William Stevens, head of financial planning at Killik, said: “Even if you are an affluent family, very few parents with two children at private school can afford a total bill north of £1 million or to see their bills go up by double-digit percentages in a year.
“It is not just those who are middle class who will be hit. The impact of this is on everyone.”
Stevens said families were being deterred from choosing private education, and those who had already opted for it were “exploring all options” to keep children in school, including delaying retirement, taking out 40-year mortgages and asking grandparents for financial help.
He said that if Labour wins the general and then holds an emergency budget, there was “a very real possibility that VAT could be applicable from this September”. Last week, Sir Keir Starmer pledged to introduce the VAT policy “as soon as it can be done”, telling the BBC: “These first steps are intended to be done straight away.”
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The analysis comes as councils in areas including Cambridgeshire, Oxfordshire, Rutland and Leeds said many state schools were already full and accepting no, or very limited, pupil transfers.
Natalie Skillicorn, 42, from Liverpool, said she and her husband, a construction worker, could not afford to pay a 20 per cent hike in fees for their 14-year-old son Louie.
Louie, who played Bruce in the West End musical Matilda, has been a boarder at Tring Park School for the Performing Arts in Hertfordshire since he was 11. A scholarship pays for a large part of his £33,000-a-year fees, and the family pay £6,000.
“Sometimes I have to email the school and ask for more time to pay. If this policy comes into place I do not see any option except pulling Louie out,” said Skillicorn, whose two other children go to a state school.
Like Skillicorn, only one of Nina Ford’s three children is at private school: her middle child, 11, was offered a place at Queen Elizabeth Grammar School in Wakefield, starting in September.
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Although Ford, 48, a human resources professional, says she and her husband, an accountant, can scarcely afford the nearly £17,000-a-year fees, even without a VAT hike, they have decided to accept the place after their academically gifted son passed the entrance exam with ease.
From next month they will start making monthly payments “which are more than our £1,400 mortgage”.
“I cannot tell you the sleepless nights we had over this,” she said. “But our son has this amazing opportunity. I thought we had to make it work.”
They will use savings to afford the first year’s fees. Grandparents will help pay the second year. Ford and her husband, who shop at Aldi, the German discount supermarket, and drive a 19-year-old Peugeot and a ten-year-old Hyundai, plan to remortgage to cover their son’s final three years.
When Labour confirmed its VAT policy pledge last week, Ford said she had “tears in my eyes … I cannot begin to tell you the panic I felt”. She has written to Starmer opposing the policy and feels the family is being penalised for trying to improve their son’s prospects. “This policy will stop me voting Labour and I have 100 per cent always voted Labour,” she said.
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Enrolments at independent schools have already fallen by 2.7 per cent this academic year, compared with the previous, according to the Independent Schools Council, which represents 1,200 private schools. It is the largest annual drop since 2011.
Experts expect private school closures over the next 12 months. This weekend, Alton School in Hampshire, which opened in 1938, has written to parents to say it will be shutting its doors at the end of this term.
In a statement on its website, it blamed “a continued decline in pupil numbers to the extent that the school has now become unviable”, adding: “This is due to a combination of adverse political and economic factors.”
Independent schools have traditionally offered free, or heavily subsidised, places to only the poorest children, but they are now coming under pressure from some parents to redirect help to families who have been paying fees for a number of years but will now struggle with the VAT rise.
Loveena Tandon, a documentary film-maker, from Education not Taxation, a campaign run by private school parents, said the next stage in their protest would be to get children to speak out about the impact. More than 118,000 people have signed a Change.org petition against the move.
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“We urge our children’s voices be heard. Their wellbeing and education are at stake, and we will stand up for their future,” said Tandon, whose children go to private schools.
Labour says the VAT policy will raise £1.6 billion a year to pay for more mental health counsellors and specialist teachers in state schools.
