One in five 'high net worth' parents remove children from private school after VAT changes
Almost one in five “high net worth” parents have removed their children from their private school following VAT changes, a report has found.
According to the 8th edition of the Saltus Wealth Index Report, one in 20 are now sending their offspring to state school, with others being sent abroad or home schooled, after the Labour government removed a historic exemption and started charging VAT on independent school fees.
The changes have been blamed for a string of private school closures across the country, including Fulneck School, in Pudsey, and Queen Margaret's School For Girls, in York, which are in the hands of administrators.
Moorlands School, in Leeds, will shut for good in December.
The trio were among the most historic independent schools in the county, with Fulneck, which sits in Chancellor Rachel Reeves’ constituency, having been open since 1753.
According to the survey of 1,293 private school parents with investible assets of over £250,000, 5.4% sent their children to state school, while others took the decision to home school their offspring (2.3%).
The rest have kept their child in private education either by moving their child from their current school to an alternative, less expensive, private school in the UK (8.8%) or to attend private school abroad (2.3%).
Around one in 17 (6%) say they have moved their child from boarding to becoming a day pupil at the same school to cover the rise in fees.
Meanwhile an additional one in 20 (5%) say they have had to ask for financial support from family members - and will need to continue doing so - to keep their child in private school.
Alex Pugh, Chartered Financial Planner at wealth management firm Saltus said: “We are now seeing the impact of VAT being added to school fees move from intention to reality, with almost one in five high net worth parents making some form of change to their child’s education as a direct result of the change.
“What’s particularly striking is that parents are not only switching to less expensive schools, but many are leaving the UK private system altogether, either moving children into state schools, sending them abroad or home schooling.
"Alongside this, large numbers of families are making significant financial sacrifices - from cutting back on spending to remortgaging homes, reducing pension contributions or even taking on additional work - to cover the higher costs.”