One in eight 'high net worth' UK private school parents to withdraw children this academic year

More than half of parents with investable assets of £250,000 or more say their children's education could be disrupted by VAT policy

Prime Minister Keir Starmer meets pupils at Holy Cross Catholic Primary School in Liverpool. PA

One in eight parents with investable assets of £250,000 ($332,720) or more plan to move their children from UK independent schools into the state sector this academic year, a survey has found.

More than half, or 55 per cent, of almost 1,000 high net worth (HNWI) private school parents questioned by wealth firm Saltus say their children’s education could be disrupted as a direct result of the UK Labour government’s decision to add VAT to private school fees in January. In total, 13 per cent say they will move their children into schools in the state sector this academic year, with about a fifth, or 21 per cent, saying they could move them to a less expensive school in the next year.

Another 11 per cent of high net worth parents with children at boarding school will move them to be a day pupil at their existing school, and 10 per cent will call on family or friends for financial support to get through this year before moving them. Another one in 10 say they are even considering moving abroad as a result of the government’s imposition of VAT on school fees.

Only 15 per cent said the policy would not affect their children's education, while 6 per cent said school fees are now their biggest anxiety – up from zero in January 2024. The survey reveals many parents are already struggling with the rising costs of private education before the imposition of VAT, with 96 per cent saying fee increases in recent years are already affecting them and 15 per cent saying they are no longer able to enrol their children.

Mike Stimpson, a partner at Saltus, said: “The decision by the new government to add VAT to school fees has been, understandably, an unpopular one with HNWIs, especially when it was announced that the policy would be implemented in January rather than waiting until the next academic year.

“This decision, as we can see from our research, will impact more than half of families with children at private school, with 13 per cent of children possibly removed from their existing school and moved into state education in the next year.

“Even before the VAT announcement, our study shows that price rises over the past few years were already having a significant impact on parents’ ability to pay, with many forced to borrow to keep their children in their current schools.”

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About a fifth, or 22 per cent, say they could move house to be nearer a cheaper school and 17 per cent have made, or will need to make, financial sacrifices. Another 18 per cent say they are already receiving – or will need – financial support from friends and family to continue to afford the fees.

The study comes after warnings that private schools are being forced to cut back on bursaries for pupils who are in need of financial assistance and considering raising the costs of using facilities in response to the VAT raid. The head teacher of Bolton School told The Times it had planned to boost bursary provision from 20 per cent of pupils to 33 per cent by 2030 but the target was “not now achievable”. Philip Britton said “the rise in fees, however it is managed, will make [private] schools more exclusive”.

Mount Kelly, a day and boarding school in Devon, is also considering slashing the £950,000 it spends on bursaries and scholarships, which could be halved, with the loss of 100 bursaries. “In five years, I have no doubt across the nation we are facing the reality of fewer children from the poorest families in private schools,” head teacher Guy Ayling told the newspaper. Independent School Council figures show that of the 38,547 children who received means-tested bursaries last year, only 7,590 paid no fees.

Education Secretary Bridget Phillipson, who reiterated the policy to loud applause at the Labour party conference on Monday, said she “doesn’t accept” that bursaries will be cut in response to the imposition of VAT and removal of business rate relief. “Some of them have got very large incomes and actually a relatively small percentage of that income going towards bursaries,” she told Times Radio. “Changes around VAT should not and must not impact on the work that they are doing around bursaries. There is an expectation of course that that would continue.”