Parents with children in private schools are bracing for another financial hit as a new set of fee rises are announced for September.
The latest increases will mean some schools have raised fees by more than 20 per cent in less than a year.
This follows substantial hikes in January when schools charged parents for some or all of the VAT that Labour began to levy on their fees at the start of the year.
Chancellor Rachel Reeves’ decision to remove private schools’ business rates exemption from the start of this month, and to increase employers’ national insurance contributions, has further increased costs, private schools claim.
The government is using the extra money raised to boost state school provision.
Melanie Sanderson, managing editor at Good Schools Guide, said the removal of charitable relief on business rates had “clobbered” the sector, adding that it was “inevitable” that parents would eventually have to foot the bill for VAT.
The Independent Schools Council (ISC) is suggesting the further fee rises could contribute to an exodus of pupils from private schools to “stretched” state schools.
Earlier this month Education Secretary Bridget Phillipson challenged the idea that parents could miss out on their first choice state schools because of VAT on independent fees.
“We’ve seen a classic example of private schools and the Tories cry wolf,” she told The i Paper. “All the signs are that more parents than ever got their first choice school offer this year.”
But asked about pupil movement between the sectors, ISC general secretary Julie Robinson said: “We know that what we’re seeing at the moment is just the beginning.
“Schools are only just in the early stages of dealing with VAT on school fees so we are seeing an impact already and history tells us that it takes a couple of years for the effect on the sector to be fully realised.”
Kingswood House School in Epsom, Surrey, raised its fees by 17.2 per cent in January and will be increasing them again by another 3.2 per cent in September – amounting to a 20.4 per cent hike in less than a year.
Kingswood House School, Epsom, Surrey (Photo: Google Street View)Head Matthew Bryan, head at the 7-16 co-ed school said he “hopes” the further rise will not prompt any pupils to leave the school, telling The i Paper: “A lot of care and time went into trying to get that decision right because we’re trying to support families who are here. We’re trying to make sure that the school is accessible to families who might want to come.
“At the same time, we have to make sure that we don’t cut provision and we don’t cut budgets.”
Parents asking for financial support
Mr Bryan said the school, where 70 per cent of children have special educational needs, has faced a “triple hit” from VAT, the national insurance increase and removal of business rates relief.
No pupils had left so far on affordability grounds but parents had been asking for financial support, so the school had increased its bursary provision in response.
“What that means is that the school has less resources to invest in other things, because we’re trying to make sure that children don’t fall through the cracks,” Mr Bryan said.
Parents with children at other private schools have been voicing their concerns about even higher fee rises in social media messages seen by The i Paper.
One parent reported a fee rise of 25 per cent this year, saying their family was “running out of things we can give up to sustain it”.
Another said they were facing a 22 per cent fee increase in one year, with a 15 per cent rise in January followed by a seven per cent increase in September.
They described the hikes as “ludicrous” – especially as they followed an eight per cent rise in September 2024 – and said the school had cited VAT, business rates and national insurance increases in its letter to parents.
A third parent, also facing a 22 per cent fee rise, said: “These rises will be pricing out so many hardworking families trying to do the best for their kids, in most cases in the absence of suitable state education.”
Ms Robinson at the ISC said private schools were actually facing a “quadruple whammy” of VAT on fees, higher national insurance contributions, business rates and the rising cost of the Teachers’ Pension Scheme (TPS).
“If schools are in the Teachers’ Pension Scheme then the employer contribution is now above 28 per cent which is an enormous outlay given that the main outgoing for any school is staff costs,” she said. “So it’s adding almost a third more onto the staff salary bill.”
Other schools are introducing a staggered 20 per cent increase. At Stowe School in Buckingham annual boarding fees were already £46,701 in September 2024. They were then increased by 15 per cent in January and are due to go up by another 5 per cent in September.
Entrance to Stowe School where boarding fees are now more than £50k a year (Photo: Chris Radburn/ PA)The school told The i Paper its core fee has been frozen for September 2025, with the increased cost due to VAT.
St Pete’s School in York raised fees by 12 per cent in January, absorbing nearly half of the VAT. But a further 8 per cent will be added to the fees for the 2-18 school from September 2025, amounting to the full 20 per cent.
David Walker, director of the Boarding Schools’ Association (BSA), said schools had “no choice but to increase fees, potentially making boarding less accessible”.
“Boarding schools have had to adjust budgets mid-year and at short notice, at a time when some are still feeling the effects of the pandemic,” he said.
“This will inevitably mean fee increases for most schools and boarding families, including military families who have seen an uplift in the continuity of education allowance (CEA) but not in line with VAT.”
Ms Robinson said the ISC “don’t have a clear view of what the average fee rise for next September is going to be yet but we do know schools are grappling with a lot of financial pressures”.
Private schools feeling ‘clobbered’
Melanie Sanderson, from the Good Schools Guide, said: “The removal of charitable rates relief has left some private schools feeling clobbered. January’s introduction of VAT on school fees saw schools reduce outgoings so as to not pass on the full 20 per cent to fee payers but it was inevitable that parents would foot much of the additional bill.
“Now the move to full business rates has heaped more pressure on schools and parents have told us of increased demands on stretched family finances.”
Private schools consultant Neil Roskilly, who ran the Independent Schools Association from 2010 to 2021, said he thought schools increasing fees by more than 20 per cent would be in a minority. He expects most schools to increase their fees by between 3 and 5 per cent in September, with an average year-on-year increase of 12 or 13 per cent.
“It very much depends on how they’ve approached the whole thing,” he said. “Some schools staggered their increases, including the year before VAT, ever since they knew Labour was going to get into power.
“It’s meant it’s been a little bit more staggered for parents rather than a massive hike.”
A government spokesperson said: “Ending tax breaks for private schools will raise £1.8bn a year by 2029/30 to help fund public services, including supporting the 94 per cent of children in state schools to achieve and thrive.
“It will be a commercial decision for individual private schools as to how they manage their finances in the same way as any other private business.”
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