How Advisers Could Help Clients Use Equity Release to Fund Private School Fees

As education costs in the UK continue to rise, many grandparents are looking for ways to give their grandchildren the best possible start in life. For advisers, this presents a valuable opportunity to guide clients through one of the most emotionally driven, yet financially complex, decisions they’ll ever make: using property wealth to support family education goals.

The Growing Challenge of Private School Affordability

Independent education remains an aspiration for many UK families, but the price tag continues to climb. According to the Independent Schools Council (ISC), average annual day fees are now around £16,000, with boarding schools often exceeding £40,000 per year. 

For parents juggling mortgages and rising living costs, these figures can feel out of reach. Increasingly now, it’s grandparents stepping forward to help bridge the financial gap. This growing intergenerational support trend means advisers have a key role to play in helping clients understand how their property wealth could be used strategically to achieve family objectives.

Structuring Equity Release for School Fee Support

Advisers can play a pivotal role in helping clients structure equity release in a way that aligns with their financial goals, family dynamics, and long-term wealth planning. Every client’s circumstances are unique, from the age of their grandchildren and the timing of school fee payments to their overall retirement income strategy and appetite for gifting, so a tailored approach is essential.

When using equity release to fund private education, advisers should first establish whether a lump sum or a drawdown facility best suits the client’s needs. A lump sum lifetime mortgage can be appropriate for clients who want to pay several years of fees upfront or secure early payment discounts from schools. This approach also provides clarity on future costs and removes the uncertainty of fee inflation. On the other hand, a drawdown lifetime mortgage may be more appropriate where fees are paid termly or annually, as it allows clients to release funds in smaller instalments as and when needed. This not only mirrors the school’s payment schedule but can also reduce the total interest accrued over time, since interest is only charged on the amount released.

Advisers should also consider the interaction between equity release and estate planning. For many clients, using property wealth to fund education offers a dual benefit, supporting the next generation while strategically managing their estate’s value. By gifting funds to children or grandchildren for educational purposes, clients may reduce the size of their taxable estate over time, potentially mitigating future inheritance tax liabilities. However, it is important to explain that these gifts are still subject to the seven-year rule for inheritance tax purposes, meaning they could be included in the estate if the donor passes away within seven years of the gift being made. The value of the estate will also be reduced and entitlement to means-tested benefits may be affected. Tax rules may change and depend on individual circumstances.

In addition, advisers should ensure that any strategy for using released funds fits coherently within the client’s broader retirement and liquidity planning. Equity release should complement, not compromise, other sources of income or assets, and advisers may wish to explore the impact on future borrowing capacity or care funding needs. Coordinating advice with other professionals, such as accountants, solicitors, or tax specialists, can provide clients with a holistic understanding of how equity release interacts with gifting, estate planning, and tax efficiency.

Ultimately, structuring equity release for school fee support is about more than simply accessing funds; it’s about aligning financial products with family aspirations and intergenerational outcomes. By taking a comprehensive, advice-led approach, advisers can help clients achieve their educational goals for loved ones while preserving financial security for themselves.

Key Considerations for Advisers

Equity release can be transformative, but it’s not suitable for every client. When exploring this route, advisers should ensure clients fully understand both the advantages and the potential drawbacks before making a decision.

One of the main benefits is that it provides immediate access to tax-free cash, which can be particularly valuable for clients wishing to support family members or fund specific goals without disturbing other assets. It also allows clients to provide intergenerational support during their lifetime, helping children or grandchildren when financial assistance can make the most difference. Unlike traditional borrowing, there is no obligation to make monthly repayments, though some plans offer the flexibility to service interest voluntarily if clients wish to manage the long-term cost. Importantly, clients retain full ownership of their home and the right to live in it for life, offering reassurance and stability.

However, advisers must also clearly communicate the trade-offs involved. Because interest compounds over time, the total amount repayable can increase significantly, reducing the value of the remaining estate. This means that future inheritance will be lower, something clients should consider within the context of their wider estate and legacy planning. Additionally, releasing equity may affect entitlement to certain means-tested benefits, which can alter a client’s broader financial picture. Finally, advisers should make clients aware that early repayment charges may apply if they choose to repay or refinance the plan sooner than expected.

Why Equity Release Should Be Part of Intergenerational Wealth Planning

By setting out both sides of the equation, advisers can ensure clients make informed, balanced decisions that align with their personal circumstances and long-term objectives.

Ensuring the client fully understands these points, and that the product aligns with their broader estate and retirement plans, is key to best-practice advice. Equity release is no longer just a “last resort” product. When used thoughtfully, it can form a powerful component of intergenerational wealth planning.

Private education is one of the most meaningful legacies a grandparent can help provide, but it requires careful financial structuring. For advisers, understanding how equity release can support school fee funding offers both a practical solution and a way to deepen client relationships across generations.