Children's education funding, without breaking the rest of the plan.
Children's education funding is a much bigger number than most families expect. Private school from prep to Year 12, then a degree on top, can run into the hundreds of thousands. Which product you use matters far less than starting early — and starting in a way that doesn't quietly wreck your retirement.
Work out the bill first. Then work out how to pay it.
We start by laying out the actual bill: which school, what year they start, what the fees are likely to be, and whether you're covering uni as well. Once that timeline is on paper the right approach tends to pick itself, and it drops into the wider plan rather than sitting off to one side.
If you pay a lot of tax and have ten years or more, education bonds and investment bonds earn their keep — they sit inside the broader tax-effective investing conversation. If you're still paying off the house, there are usually better homes for the next dollar than a separate education account. That trade-off is worked through on the debt management page.
Six ways to pay for it.
Each suits someone. None is best for everyone. We compare them on what you actually end up with after tax, how easily you can change your mind, and what happens if life does.
Education bonds
An investment built for school fees. The tax is paid inside it, and taking money out for education costs is treated kindly.
Investment bonds
Tax is paid inside the bond at the company rate, and after ten years you can take the money out with nothing more to pay. Good for parents on a high tax rate.
Scholarship funds
Pooled education savings plans with their own tax rules when you spend the money on schooling. We read the actual product wording before suggesting one.
Family trust
A trust can hold the family's investments and hand income to adult children later. Not much use for primary or high school fees, though.
Your offset account
If you still have a mortgage, leaving the money in your offset often beats a separate education account once tax is counted. We do the sums both ways.
Just investing it yourself
Simple, flexible, and taxed at your own rate. Often the right answer once running a fancier structure costs more than it saves.
The trap: locking too much away, too early.
This is one of the few financial decisions where the person it's for gets a vote. Kids win scholarships, change schools, or decide at 17 that they'd rather do a trade. Tie too much money up in something that can only be spent one way and you're stuck.
So we usually suggest a mix: enough in a tax-friendly structure to cover the basics, and enough somewhere flexible to cope when plans change. The fees also need a backup if something happens to you, which is why income protection and life cover come up in the same conversation.
- What the fees are, year by year
- How fast they are likely to rise
- Whether you are covering uni too
- What happens if they win a scholarship
- Two kids at school at once
- Your income going up or down
Questions we get a lot.
As early as you can, because the growth does most of the lifting. Even a modest amount put away each month from birth makes Year 7 a lot less frightening. We work it out against a realistic guess at how fast fees will rise — they rise faster than everything else.
Not always. They suit families who are certain about private school and who pay a lot of tax. If you still owe money on the house, paying that down and pulling it back out later often leaves you better off once tax is counted. We compare the two properly.
With both, the tax is paid inside the investment. The plain investment bond is more flexible, because you don't have to spend the money on school at all. The education version has some tax advantages if you do. It comes down to how certain you are about the school.
Yes, and plenty do. Most of these let other family members put money in, and the tax treatment follows the investment rather than who paid. Where it affects someone's will, we work through that too.
Keep reading
- Financial planning overviewThe main page — what a plan covers and how it's written.
- Tax-effective investingInvestment bonds, family trusts, and when each fits.
- Debt managementWhether to pay the mortgage down or save for fees.
- Superannuation adviceWhy super usually still comes first.
- Personal risk insuranceCover that keeps the fees paid if you cannot work.
Information on this page is general in nature. It does not take into account your personal objectives, financial situation, or needs. Read the relevant Product Disclosure Statement and consider whether personal advice is appropriate before acting on any information here.
Start before the first bill.
The first conversation is free and you're not committing to anything. Bring the list of schools you're considering and we'll work out what it takes.