Education: Increases in private school fees outstrip inflation

Fees have increased by an average of 68 per cent, a rate of growth that is more than 1.8 times faster than the increase in the Retail Price Index (37 per cent) over the same period, according to the study by Lloyds TSB Private Banking.

Since 2002, the average annual private school fee has increased from £6,820 to £11,457 in 2012.

Regionally, the biggest rises have been in Greater London and the South West, with fees increasing in both regions by 79 per cent during the decade.

The next biggest increases were in East Anglia (74 per cent), the East Midlands (69 per cent) and the South East (68 per cent).

The lowest average increases were in the West Midlands (53 per cent), the North, which includes the North East and the North West (60 per cent) and Scotland (63 per cent).

Fees have increased significantly more slowly in the past five years than the previous five. Since the start of the economic downturn in 2007, the average annual fee has grown by 19 per cent. This is closely in line with the Retail Price Index which rose by 18 per cent in the same period.

The average annual fee in 2012 of £11,457 is equivalent to 35 per cent of annual average gross full-time earnings of £33,011; in 2002 the comparable ratio was 27 per cent.

Researchers said that, with fees rising by significantly more than the rate of inflation, it has become more difficult for the average earner in many occupations to send their children to private schools.

There are several relatively well-paid occupations – such as pharmacists, architects, IT professionals, engineers and scientists – where someone on the average earnings for that occupation can no longer send their child to private school without assistance from other sources.

In 2002, someone employed in these professions, on average earnings, would have been able to afford to send their child to a private school.

Private school fees are deemed to be affordable for an occupation if they represent 25 per cent or less of gross average annual earnings for someone in that occupation.

Parents earning the average salary in occupations such as production managers, accountants, senior police officers and pilots face the smallest financial burden in sending their child to a fee- paying school, with the average annual fee representing around a fifth (19 per cent) of their annual average gross earnings.

The number of pupils at Independent Schools Council (ISC) member schools who receive a financial contribution towards the payment of their fee reached 164,298 in 2012, a 6.4 per cent increase on 2011. Pupils who receive financial help now account for 33.2 per cent of all pupils at ISC schools – slightly higher than the 32.1 per cent who had assistance in 2002.

The ISC’s member schools are the highest contributor, providing assistance to 27.6 per cent (22.1 per cent in 2002) of all pupils, with over half of the assistance coming via various bursary and scholarship schemes.

Suren Thiru, economist at Lloyds TSB Private Banking, said: “Private school fees have increased by significantly more than inflation over the past 10 years, making it increasingly difficult for the average worker in many occupations to afford a private school education for their offspring.

“All parents want to ensure their child receives the best education. It is, therefore, becoming increasingly vital that parents plan their finances as early as possible if they want private schooling for their children.”