When parents choose to invest in independent education for their children it takes careful planning in terms of how this will be funded. Rarely however do parents anticipate they may be faced in the future with potential challenges such as bankruptcy or serious illness which will have an impact on this decision. How therefore do parents cope if they are suddenly faced with an inability to pay the school fees?

First of all talk to the school. Be prepared to discuss the details of the situation with the school. In most cases you will find a sympathetic ear and the school will be able to advise how it might offer support and guidance. Although the school may not be able to do anything to assist financially as often their fund for scholarships and bursaries is allocated well in advance, they will most likely be able to put you in contact with charitable trusts which exist to support parents who may have fallen on hard times. The School Fees Charitable Trust is one such example. Funded by specialist insurance provider SFS, it aims to assist parents who find themselves unable to pay the school fees due to sudden unforeseen circumstances of hardship.

It may also be possible to release some of the equity from your home to cover the school fees. Speak to your lender for their qualifying criteria which are likely to relate to your income going forward and your continued ability to pay off the loan. You may be able to extend the term of your mortgage, but if you are not able to do this, be wary that this may also mean that your monthly mortgage payments will increase.

Are grandparents able to help by stepping in while times are tough? Giving way up to £3000 a year can reduce inheritance tax liability and small gifts of up to £250 can be made exempt from inheritance tax liability. Trusts can be set up to pay school fees and if interested in doing this you would be wise to seek advice from a financial adviser.