Educating your child abroad
Foreign owners of UK residential property face a new capital gains tax (CGT) if they sell after 6 April 2015. Some property experts believe sales will rise ahead of this date, pushing up the supply of available London property this year. Here’s what you should bear in mind, if you’re thinking of taking this opportunity to buy a place of your own.
The popularity of international schools has risen sharply in recent years, with pupil numbers tripling in the decade to 2012 to reach three million worldwide. It’s a trend that has been driven by a variety of factors, such as the growing prosperity of China, where many parents believe an international education will increase their child’s chances of getting a place at a prestigious university. However, the main reasons for the appeal of international schools tend to be that they offer:
- the opportunity to develop language skills, since most international schools teach in English, and many are multilingual
- cultural experience and a global perspective
- the opportunity to develop an international network of friends and contacts
If you are thinking of sending your child to an international school then you may feel the best options are in the UK and US – and it is certainly true that these countries offer many options. However, with more than 6,000 international schools worldwide, other countries such as Ireland and Germany are also becoming popular destinations.
A good international education does not come cheap. Even medium-priced boarding schools in the US and UK tend to charge at least US$40,000 a year (for tuition and accommodation), and the most expensive will typically charge more than US$50,000. However, it is possible to get comparable quality for significantly less by considering international schools in other countries. In Ireland, for example, top boarding schools such as Wilson’s Hospital School in Westmeath and Wesley College in Dublin both charge less than US$20,000 a year; and in Germany the highly regarded Landesscule boarding school in Saxony charges less than US$6,000.
This is just one of many factors you should consider before you make a final decision, which is why we recommend you seek professional guidance on the options available to you, and on how to fund the cost of educating your child abroad.
Financing your child’s international education
In addition to tuition accommodation fees, it is important that you also consider other costs, such as uniforms, travel, school trips and any extra lessons you feel your child may need – for example, to support the development of their English if this is not their first language. To put this into perspective, even parents who send their children to non-fee-paying state schools in the UK spend an estimated US$1,500 a year on a single child’s additional educational expenses.
Once you have established the total likely cost of your child’s education, you then need to consider how you will arrange for sufficient funds to be available at the right time and in the right currency, in order to pay the necessary fees.
As with any long-term spending goal, you will make life easier for yourself if you begin to save and/or invest sooner rather than later. If you have a child aged 11 and you wish to send them to a boarding school in the UK right now then, with no savings and based on current prices, you will need to set aside around US$3,500 a month to educate them until they turn 18. However, if you have a child aged seven and you can begin to set aside funds for them right away, then you will be able to build up a fund that can be used to reduce your monthly outgoings considerably when your child begins their first term.
Alternatively, if you intend to send your child to a school where fees are payable in US dollars or euros then you may wish to open a savings account in one of these currencies, to ensure any gains you make on your savings are in the currency that you will ultimately need, and will therefore not be affected by exchange rates when they come to be used. Our International Reserve Account, for example, can be opened with as little as £1, €1 or US$1.
How Barclays can help you plan your child’s international education
If you are thinking about arranging an international education for your child, Barclays International Banking can help you in a number of ways. For example, we can help you to plan your savings and currency transactions so that you have sufficient funds in place – in the right currencies – to pay school fees as they arise. If you have a Relationship Manager1, we can also refer you to one of our expert advisers in investments and/or currency, to provide you with specific guidance tailored to your circumstances. It is important to appreciate though that investments can fall in value as well as rise. You may get back less than you invest. Please note also that we cannot provide you with advice on investments when you are in the united Kingdom.
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