How should I invest for my new daughter's private education? |
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Source: Financial Mail Women's Forum, 8th May 2010 I would like my new-born daughter to be privately educated. Can you advise how much we would need to save per month to realise school fees of approximately £12,000 per year in five years' time? Can you recommend any good investments? - Diane, Kent One of the difficulties with school fee planning is that the cost of private education has historically risen at a considerably faster rate than both inflation and wage increases. Although the school fees are currently £12,000 per annum, you may need much more than this by the time your daughter starts school. Assuming investment growth of 7% and school fee increases of 4.5% per annum (in line with the most recent increases announced), you would need to save around £780 per month (from now and throughout your daughter's schooling) for private education up to the age of 18. The best type of investment to use for this will depend on your circumstances. An equity ISA will provide tax efficiency and can incorporate a good spread of investment funds. Withdrawals from the equity ISA will be tax free and can be taken as a regular fixed amount or on an ad-hoc basis. - Lesley Collins, Chief Executive, Independent Women |
