• Premium Credit’s School Fee Plan provides funding to help parents spread the cost of fees

Around one in four private school parents have been told there will be no fee increase this academic year despite the Government decision to impose VAT on school fees from January 1st next year, new research* from Premium Credit’s School Fee Plan, the leading provider of finance solutions for private school fees, shows.

Its study among current private school parents found 10% have been told fees will not rise this academic year including any increases for inflation while 15% have been told any fee increases will only take effect from September 2025.

Research for Premium Credit’s School Fee Plan found most parents say schools will not be passing on the full 20% VAT. Around three- quarters (74%) who have been told fees will be rising say increases will be up to 15% including the cost of any additional rises due to VAT.

Nearly half (44%) of those who have been told fees will increase say the extra will be less than 10% with 11% saying increases will be less than 5%.

The research found around one in six (17%) of parents with children at private school currently pay monthly for their children’s fees and more than half (53%) who do not pay monthly would like to do so if they could. Around 35% questioned said the school had offered the chance to pay fees in advance since the concept of VAT being added to fees became a reality.

The total lent through Premium Credit’s School Fee Plan (SFP), which allows you to spread the cost of a child’s school fees, was around a quarter more last year than in 2021. Total lending increased by 10% last year compared to 2022 and the amount of funding provided through SFP in the first three months of this year is 9% higher than the same period last year. The average amount of funding through SFP is now around £20,300.

Stewart Ward, Director Education Sector & Head of School Fee Plan, Premium Credit said: “Private schools are adopting a range of strategies to address the introduction of VAT on fees and for many that means no fee increases at all this academic year including any inflation-linked increases.

“For those who have already been told fees will increase in general it appears that increases are below the full 20%. It is looking likely that on average private schools will pass on 15% or 16% of the increase to parents.

“There is a real benefit to both parents and schools from being able to spread the cost of fees and being able to pay monthly rather than in one lump sum. Our annual survey with parents shows 98% are satisfied with the service they receive while convenience, cost and ease of use are seen as the major reasons for using SFP.”

For over 25 years, SFP has helped parents finance their children’s independent school fees by enabling them to spread the cost rather than paying a lump sum each term. SFP is the convenient and manageable way for parents to pay for independent school fees and extras such as music tuition and trips. It splits the cost into regular monthly direct debits, like any other household bill. It has a net promoter score of +70 which is regarded as excellent.

The process of applying for a SFP for both parents and schools is seamless. Parents apply to open their account online before the beginning of any term. If the application is approved, SFP will notify the parents and the school. SFP sends the full payment to the school at the start of each term.

For further information on SFP, please visit https://www.myschoolfeeplan.com/application/schoolfeeplan

(*) Independent research conducted by Viewsbank online among 643 parents with children who currently attend or private schools in the UK between August 19th and 21st 2024