📌 Quick Answer: How are parents paying for school fees in 2026?
Even before the VAT addition, average private school fees across the UK were already £15,200 annually, pushing higher with inflation. Many parents drained their cash savings to survive the initial 2025 price hikes and are now "asset rich but cash poor.
One option some homeowners consider is a Home Equity Line of Credit (HELOC) which is a form of borrowing secured against your home. It may allow you to draw funds as needed and pay interest only on the amount used, but it increases your secured debt and your home may be repossessed if you do not keep up repayments.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
The last twelve months have been financially challenging for many parents with children in the independent school sector.
When the 20% VAT on private school fees took effect, the immediate reaction for most families was simply survival mode. You might have scrambled to pay a few terms in advance, dipped heavily into your ISAs, or accepted a generous, one-off gift from grandparents. We did what we had to do to weather the initial storm.
But here we are in 2026, and the dust has settled. The problem? Those temporary cash buffers and liquid savings are largely gone, leaving behind a long-term cash flow squeeze. If you are sitting on a home with plenty of equity, but feeling suddenly "cash-poor" every time a new termly invoice lands on your desk, you are far from alone.
The 2026 reality: how much are UK private school fees now?
If your school bills appear to have increased by more than the VAT change alone, there may be several contributing factors.
The Independent Schools Council has pointed to several cost pressures affecting the sector, including VAT on fees, the removal of charitable business rates relief, and increases in employer National Insurance contributions:
1. The 20% VAT addition on fees.
2. The removal of charitable business rates relief.
3. Recent increases to National Insurance contributions for staff.
The Evening Standard says, average annual day-school fees are up significantly and now estimated between approximately £22,500 and £23,500. Actual fees vary significantly by school, region and year group.
The pressure is heavily showing. According to the Saltus Wealth Index Report (February 2026), (68%) of surveyed high-net-worth parents said they had made significant financial changes in response to fee increases. The report also indicates that some parents have reduced or paused pension contributions, which may affect their long-term retirement planning.
Why some parents consider alternatives to savings or remortgaging
According to the Saltus Wealth Index Report, around 8% of surveyed parents reported moving or considering moving their children out of independent education. The findings may not represent all parents.
But if your child is halfway through their GCSEs or starting their A-Levels, uprooting them from their friends, mentors, and stability simply isn't an option you want to entertain.
So, what do you do when the cash savings run out? For asset-rich homeowners, traditional borrowing routes often fall short:
- Standard remortgaging: this usually requires breaking your current mortgage. If you locked in a brilliant, low fixed interest rate a few years ago, breaking it now to release equity could cost you thousands more in higher interest over the long run.
- Unsecured personal loans: these make you borrow a massive lump sum all at once. If you borrow £30,000 today for the next few years of school, you’re paying interest on all of that money immediately, even if most of it is just sitting in your bank account waiting for next term.
- Downsizing: this takes months of stressful viewings, legal fees, and chain delays, severely disrupting family life at the worst possible time.
An alternative option: how a HELOC could help manage termly school fees
If you have built up equity in your home, you don't need to sell it or tear up your affordable primary mortgage to bridge the gap.
For some homeowners, a Home Equity Line of Credit may be a flexible way to access funds secured against their property. The interest rate may be lower than some unsecured borrowing options, but because the borrowing is secured against your home, the risks are different and the total cost may be higher if repaid over a longer period.
Features that may make a Selina Finance HELOC relevant for termly school-fee planning include:
- Your main mortgage may remain in place: a HELOC usually sits behind your existing mortgage as a second charge. This may allow you to keep your existing mortgage rate and term, subject to eligibility, lender requirements and affordability checks.
- Draw-as-you-go flexibility: instead of taking a massive lump sum, you are approved for a credit limit (e.g., £50,000). When the autumn term invoice arrives, you simply draw down the exact £7,500 you need to pay the school.
- Only pay for what you use:You generally pay interest only on the amount drawn. Check whether any fees or charges apply to setting up or maintaining the facility.
- No early repayment charges: if you get a seasonal bonus at work or an inheritance comes through, you can pay down your HELOC balance with zero early repayment charges.
A HELOC will not be suitable for everyone. Approval is subject to status, affordability checks, property valuation and lending criteria.
Managing school-fee costs while considering the risks
Private education is a major investment, and the UK landscape has undoubtedly become tougher over the last year. However, you shouldn't have to sacrifice your retirement pot, drain your emergency funds, or disrupt your child's crucial exam years to manage it.
By unlocking the wealth already sitting in your home, you may be able to create a flexible funding buffer to help manage invoices as they arrive, while recognising that this increases the debt secured against your home.
Before applying for secured borrowing, it may be worth considering alternatives such as speaking to the school about payment plans or bursaries, using available savings, reviewing wider household spending, or considering whether a different borrowing option may be more suitable.
Curious about how much equity you could unlock? Head on to our main page to find out more. You can also try our HELOC calculator here.
Ready to take the next steps? Find out your borrowing power today and get a quick, personalised quote with Selina Finance without impacting your credit score here.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
