Prep school fees have risen at above-inflation rates for as many years as I can remember. And a probable VAT related price rise in 2024/25 could squeeze many out of independent education.
But, what if you could choose the elements of prep school education that you most wanted, in a modular or menu-based manner? What if you knew which attributes of provision attract a fee premium, the scale of that premium, and which ones don’t? Rather than seeking the school that offers everything, might a more considered cost-effective route to your desired educational outcomes help with the fee increases? After all, we’re all used to the idea of trade-offs and ‘you get what you pay for’.
That is the approach of this article, which uses data from a 10-year study of prep school fees. Slightly idealised, for sure, but I hope it serves a useful purpose.
Prep schools have varied pricing strategies
In 2023/24 it costs a total of £93k to send your child to the average prep school from Reception to Year 6. And that’s just tuition fees. Extend to Year 8 and the cost rises to £131k. If you take a full boarding option from Year 3 to Year 6 the cost rises to £148k, and to Year 8; £208k. In the current political climate, these are the costs that might increase by 20% if and when fees attract VAT.
Prep schools adopt a variety of fee strategies. To start with, what they include and what they don’t include. Lunches and residential trips are the large ticket examples for day fees. Include them, and the school is signalling a ‘no more extras or nasty surprises’ message. Exclude them, and the school is looking for a favourable price comparison, a ‘we are cheaper’ message.
More important is the increase in tuition fees as the pupil progresses through the school, as illustrated in the graphic (lunches and trips stripped out). Year to year, excluding inflation, prep school fees increase by about £100-150 per term, with a more significant jump of £600 per term from Year 2 to Year 3, and £1,200 per term from Year 6 to 7.
Why? Is it that teaching older children costs more than teaching younger children? Or that day trips, teaching materials and shared facilities are more expensive for older children? Possibly, but not by £100-£1,200 per term. I think the answer lies in habit; the way things have always been done. That’s why, as well as these annually stepped fee policies, there are just as many schools that have a flat fee for Years 1 and 2, for Years 3 to 6, and even throughout the prep years.
Prep school fees are rising faster than before COVID
In the good old days, when inflation and interest rates were low prep school fees rose at an average of 3-4% per year. COVID depressed fee increases in 2020/21. But since then, fee increases have gathered pace to this year’s 7.4% for day fees.
The pattern of fee increases has also changed. In the pre-COVID days there wasn’t too much variation in fee increases by school; as shown by the grey narrow peaked bell-curves for those years in the graphic. Schools increased fees by a similar amount and within a narrow band of fee increases.
All changed in 2020/21, the academic year the COVID crisis affected most. In that year 67% of schools didn’t raise fees or they reduced them.
Since then, there has been a wider range of fee increases in any given year, as demonstrated by the wider bell-curves in 2021/22, 2022/23 and 2023/24. Could this mean that prep schools are adopting a wider range of pricing strategies? Will the spread of price increases be greater in 2024/25 should the VAT increase come into effect?
How prep school fees vary by location, age and gender
So now let’s look at some elements of educational provision and how they seem to affect average fees. Geography is an obvious, and often reported one. It’s no surprise that prep schools in London have higher fees than the national average. 32% higher, in fact. And it is well known that fees are lower in the north and west of the country, compared to the national average. But fees aren’t uniformly higher or lower in these regions. For example, around Maidenhead fees are 12% higher than the national average, but 2% below in Reading. Both would count as Home Counties preps where the average is 3% above. Competition as well as local demographics are factors.
Parents probably suspect, but don’t know, that prep schools that teach to Year 8 have higher fees (to Year 6) than those preps that teach to Year 6. The same goes for day fees at schools that have boarders.
Single sex education can come at a cost. Fee levels at boys-only and girls-only prep schools aggregate at 14% more than the national average.
How prep school fees vary by ownership, size and class size
Looking for economies of scale and back-office efficiencies, it would appear that junior departments of all-through schools charge less than standalone prep schools. It might be tactical pricing, of course, but schools that are part of larger for-profit or charitable school groups also charge lower fees, on average.
But economy of scale arguments aren’t reflected in lower fees at larger schools, or those with larger class sizes. Counter-intuitively, the data suggests that parents might pay less at prep schools with less than 140 pupils (Rec-Year 6). The same goes for those with class sizes of less than 15 pupils.
How prep school fees vary by facilities
Prep schools with a wide range of facilities charge more. And preps with fewer facilities charge significantly less. We can almost indicate fee pricing increments by each individual facility, with due caution for double counting. For illustrative purposes, prep schools with swimming pools charge 14% more than those that don’t. But a sports hall (as opposed to a multi-purpose hall) only commands a 4% premium.
Attractive buildings and grounds also attract a 6% fee premium, which is less than we might have expected.
Facilities cost money to build. What this analysis doesn’t show is the step change in fees before and after the build. It can be significant.
How prep school fees vary by curriculum and results
Championing a broad curriculum allows a prep school to charge higher fees, it would seem. Parents are prepared to pay the 325 schools with the broadest academic programme, the 370 with the widest sports provision and the 301 with the widest arts provision a 9%-15% fee premium. However, a fully developed outdoor learning programme attracts only a 2% premium.
Securing a track record for academic results is important for setting fee levels higher than the national average. It isn’t surprising that parents pay a premium for proven results. And the oft-quoted prep school difference being subject specialist teaching seems to be reflected in an 11% fee premium for the 415 prep schools that do it most.
We have to be careful how literally we use this modular approach, for two reasons. The first, as previously mentioned, is that there is potential for double counting. For example, a significant number of prep schools with a swimming pool may also have a sports hall.
Secondly, it assumes that you can switch from a high fee prep to a lower fee alternative, which may not be feasible.
But switching may be an option for some. And for prep schools, being a more focussed alternative may prove to be an attractive strategy as the fee-increase fallout gains momentum.