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School Fees Planning Solutions, page 2

Capital to invest

If you have capital available now or at a later date, there is a wide range of attractive and tax efficient options. These vary in predicted rates of return depending on the risk factor involved. Provided sufficient time is available, you are likely to get superior rates of return with one of our investment plans without taking too much risk. SFIA will only recommend a particular investment after a full consultation with you to ensure the plan is suitable.

There are many fund options including:

• Actively managed funds
• UK equity funds
• International investment
• Multi-manager funds
• Gilt funds
• Corporate bonds
• Index-tracking
• Property funds
• Absolute return funds
• Target return funds

Your adviser will help you decide what investment strategy is right for you.

Monthly Savings

There are similar options if you are investing from income. When deciding which investment is the most appropriate, a major consideration is balancing the timing of the educational payments whilst obtaining the best value from your monthly contributions. Sufficient time is required for a regular investment to provide its full benefit.

Guaranteed Plans

There are investment plans available that guarantee that their returns will meet expected payment needs. Our tailored plans will contain an element of guaranteed return depending on your financial circumstances.

Trust Planning

Trust planning is an effective solution when Grandparents wish to contribute to the funding of their grandchildren's private education. You can set up a trust for grandchildren either during your lifetime or in your will, to operate after your death.

Where capital has been provided by a grandparent, any income credited to the trust is treated as the child's income. Each child is entitled to their own personal pre-tax income allowance. Similarly capital gains arising are also attributed to the child and therefore each child's annual capital gains exemption can be applied.

Assuring Continuous Education

Protecting your Payments

Over 80% of parents pay their school fees out of income. If the principal parental income ceases due to redundancy, unemployment or accident and sickness, many parents find it difficult to continue to fund independent education for their children. There are products available that protect school fees payment and ensure that their children complete their independent education.

Need for a reserve

Parents should always budget for a reserve which can be drawn when unforeseen financial circumstances arise, i.e. redundancy or ill health. For the self-employed or a controlling director you may also encounter a period of poor trading conditions or an unexpected call on your funds.