So, here we are again. Just when you thought you could finally kick back and enjoy your golden years, sipping cocktails on a beach somewhere, your kids drop the bombshell: “Hey, Mum and Dad, any chance you could help with the grandkids’ school fees? You know, just to give them a leg up?” And not just any school fees—oh no, we’re talking private school fees, because public school apparently isn’t good enough for little Timmy and Sally.
And just to add some extra spice, the Labour Government’s decided to slap VAT on private school fees. Because nothing says “supporting education” like making it even more expensive. 🙄
Retirement? Who Needs It When You Can Work Forever?
But here’s the thing: instead of groaning at the thought of extending your working life, what if you flipped the script? Imagine finding work that doesn’t feel like work—something you actually enjoy. Something that gets you out of bed in the morning with a smile instead of a groan. Who says you have to retire at all if you’re doing something you love?
And while we’re at it, let’s stop listening to those pension companies trying to scare you into hoarding every penny like a dragon guarding its gold. They love to push the idea of “cliff-edge” retirement: one day you’re working, the next you’re done, and you better have enough saved up to last. But who decided that’s how life has to go? Instead of fearing outliving your pension, why not keep working—on your own terms—and keep the income flowing?
Quick Fix: Just Pay Up
If you’re itching to keep busy (and keep those grandkids in posh uniforms), you could always take the quick route: pay the fees directly. Sure, it’s not the most tax-efficient way to do it, and if you drop dead within seven years, the taxman will be there to scoop up a chunk. But hey, it gets the job done, right?
Or, if you’re a bit more forward-thinking, why not plonk down a lump sum to cover multiple years of fees? This way, you start the clock on the seven-year tax rule, and if you’re lucky enough to stick around, your estate won’t owe a penny. It’s like playing financial roulette, but with better odds.
Trusts: Because Why Make Life Simple?
Feeling adventurous? Consider setting up a trust. A bare trust is the no-frills option—funds are held for the grandkid’s benefit until they hit 18, at which point they can spend it however they please. Maybe on education, or maybe on that shiny new sports car they’ve been eyeing. 🚗
But if you’re really in the mood for some complexity, there’s the discretionary trust. Think of it as the Swiss Army knife of financial tools: flexible, versatile, and guaranteed to give you a few headaches. You get to set aside a pot of money, and the trustees—who could include you—decide how it’s spent. The downside? Taxes, paperwork, and the occasional urge to bang your head against the wall.
But the upside? You could potentially save a chunk of change on inheritance tax, and isn’t that what we all dream of?
The Fine Print: Because There’s Always a Catch
Of course, no plan is without its pitfalls. Before you go all-in on this grand scheme, make sure you’ve crunched the numbers. Can you really afford to commit to this for the next 15 years? And what if you end up needing expensive care down the road?
And let’s not forget the possibility of losing the ability to manage your affairs. Enter the lasting power of attorney—a handy little tool that lets someone else take over when you no longer can. Just make sure they’re legally allowed to keep making those school fee payments, or things could get messy.
Lastly, don’t overlook your will. If you want your money to keep covering those school fees after you’re gone, make sure everything’s properly structured. You wouldn’t want your legacy to be remembered as “the one that didn’t plan ahead.”
The Bottom Line: Is It Worth It?
So, would you work a little longer to put the grandkids through private school? Maybe you will, maybe you won’t—but with the right approach, you might just find that working longer isn’t such a bad thing after all. Especially if it means doing something you love, staying engaged, and giving those pension companies a run for their money. Because who says you have to retire when you’re having fun?
Academy of Life Planning 