The fees for a single child in an independent day school can be in the region of £10,000 to £12,000 per annum, and continue to soar well above the rate of inflation. Clearly the decision to educate children privately is a significant one, requiring a substantial financial commitment. That commitment can be eased somewhat by proper financial planning.

The type of plan you adopt will depend largely on the length of time before fees are due and whether financing is to come from income, capital or a combination of the two. In the past, With Profits Savings Plans were often recommended, whereby sums assured would mature over a number of years designed to meet the cost of the fees.

An increasingly popular strategy, however, is to design a portfolio of investments carefully spread across various assets such as cash, fixed interest securities and equities. Lower risks investments (cash) are used the fund the fees due in the immediate and foreseeable future. Monies invested in equity backed assets to maximise potential capital growth are used for fees further down the road. Careful monitoring is a must of course - it's essential to ensure that the appropriate asset split is maintained.

To safeguard the school fees plan against Inheritance Tax and the implications of intestacy, the investment would be placed in trust. As such, advice should always be sought as property is placed in trust cannot usually be revoked.

Because of various tax rules and allowances it can also prove highly tax efficient for a third party, such a child’s aunt, uncle or even grandparent to gift monies for the purpose of school fees planning.