Interest rates

[66tim99]

I have crunched the numbers, and putting excess cash each month into a stocks and shares ISA rather than overpaying the mortgage is almost certainly going to be more advantageous.

It would be more of a gamble to increase borrowing to put a lump sum into an investment account as CGT would eat away at any profit.

So, it seems likely that come November and we remortgage, we shall be paying interest only and stuffing up to £40,000 each year into our stocks and shares ISAs. Historically we have achieved 7.5% growth, and so long as we can do better than 4.6% per year over 5 years it will be the right decision.

My ISA lost about 2% last year.
I've noticed I can get 5.8% in a savings account if I lock it away for a year, or at least 4% if I need instant access...

 

[Amarillo]

My ISA lost about 2% last year.
I've noticed I can get 5.8% in a savings account if I lock it away for a year, or at least 4% if I need instant access...

 

[Mansfieldman750]

I have crunched the numbers, and putting excess cash each month into a stocks and shares ISA rather than overpaying the mortgage is almost certainly going to be more advantageous.

It would be more of a gamble to increase borrowing to put a lump sum into an investment account as CGT would eat away at any profit.

So, it seems likely that come November and we remortgage, we shall be paying interest only and stuffing up to £40,000 each year into our stocks and shares ISAs. Historically we have achieved 7.5% growth, and so long as we can do better than 4.6% per year over 5 years it will be the right decision.

You shouldn’t go far wrong with that.
The p/e of the FTSE100 Index, for example, is 11.56 today. If you invert that, gives you an earnings yield of 8.65%, of which 3.92% is paid out in dividends.
That looks fair value. stay the course and you will do fine.

 

[Amarillo]

You shouldn’t go far wrong with that.
The p/e of the FTSE100 Index, for example, is 11.56 today. If you invert that, gives you an earnings yield of 8.65%, of which 3.92% is paid out in dividends.
That looks fair value. stay the course and you will do fine.

I’ll go for a basket of low cost tracker funds:
16.5% emerging markets
16.5% Europe exc UK
16.5% Japan
16.5% Pacific ex Japan
16.5% US
17.5% UK

Some, especially emerging markets, can be very volatile (up 42% one year, down 5% & 7% the next two) but to a certain extent I can time the sale(s) to take advantage of peaks and avoid troughs.

Or in 5 years I could remortgage again and go for a ten year repayment strategy. We might find ourselves paying school fees in the not too distant future.

 

[soulstyledevon]

Or in 5 years I could remortgage again and go for a ten year repayment strategy. We might find ourselves paying school fees in the not too distant future.

You’ve spent years saving hard and investing money to give a large portion to a school…?
Crazy.

 

[Amarillo]

You’ve spent years saving hard and investing money to give a large portion to a school…?
Crazy.

Totally crazy.

These are the choices:
1. Intensive tutoring and hope to get into one of the neighbouring borough’s grammar schools.
2. Pay fees of ~£9,000 per year per child for seven years.
3. Go to the local school where children spit at their teachers and stab each other.

 

[soulstyledevon]

Totally crazy.

These are the choices:
1. Intensive tutoring and hope to get into one of the neighbouring borough’s grammar schools.
2. Pay fees of ~£9,000 per year per child for seven years.
3. Go to the local school where children spit at their teachers and stab each other.

How many children have been stabbed in the last 3 years at the local comprehensive…?

 

[larrylamb]

2. Pay fees of ~£9,000 per year per child for seven years.

My son has just finished his A levels at the local 6th Form College. We have paid for a maths tutor for the past 2 years to help him. However, he was the only one from 6th form with the tutor, ALL his other students were from the local highly rated private school with fees of 10k a year. I wouldn't be happy sending my child to a private school that then needed extra maths lessons paid for. The tutor told me the level of teaching at the 6th form was far higher than the private school.

 

[Amarillo]

My son has just finished his A levels at the local 6th Form College. We have paid for a maths tutor for the past 2 years to help him. However, he was the only one from 6th form with the tutor, ALL his other students were from the local highly rated private school with fees of 10k a year. I wouldn't be happy sending my child to a private school that then needed extra maths lessons paid for. The tutor told me the level of teaching at the 6th form was far higher than the private school.

Yes, 6th form might be different, especially in boroughs/counties with separate 6th form colleges.

I took my A levels at Woolwich College and everyone was well motivated.

 

[Amarillo]

How many children have been stabbed in the last 3 years at the local comprehensive…?

They don’t publish those figures other than when the victim dies (or off spring of a celebrity) which is, thankfully, rare.

The late Glenda Jackson’s son was stabbed at a local school, and Jimmy Mizzen was murdered locally by Jake Fahri who I had the misfortune of knowing.

 

[andyinluton]

Totally crazy.

These are the choices:

3. Go to the local school where children spit at their teachers and stab each other.

And come out of it street wise having learnt about the real world, where people don't get houses bought for them & live off trust funds.

If the schools are so bad take your £18k per year in fees and spend it mortgage payments on a house where schools are better, there's no point owning 15 buy to lets and a semi in London if it means its not safe to go to school.

 

[The Tall Luthier]

My son has just finished his A levels at the local 6th Form College. We have paid for a maths tutor for the past 2 years to help him. However, he was the only one from 6th form with the tutor, ALL his other students were from the local highly rated private school with fees of 10k a year. I wouldn't be happy sending my child to a private school that then needed extra maths lessons paid for. The tutor told me the level of teaching at the 6th form was far higher than the private school.

Private schools only buy you one thing and it is not better teaching. In fact what you buy is QA the quotient of aspiration.

All children that attend private school have, by definition almost, aspirational parents. Parents that care about the benefits of education. The average QA is high in a private school.

In a comprehensive school you have highly aspirational families, you also have families that don’t give a hoot about education. The average is lower than in a private school.

The QA is fundamental to the ethos of a school, it’s the second most important factor. It’s the thing that encourages kids to strive for better. The first is the headteacher. A good one makes a school and a bad one can break it.

This is why grammar school are so bad/good. They drive aspirational parents to one end and lower completely the average QA of the comprehensive.

 

[Amarillo]

And come out of it street wise having learnt about the real world, where people don't get houses bought for them & live off trust funds.

If the schools are so bad take your £18k per year in fees and spend it mortgage payments on a house where schools are better, there's no point owning 15 buy to lets and a semi in London if it means its not safe to go to school.

Yes, that’s a fourth option, and quite probably the most likely. Simply move to a better school catchment area.

 

[Amarillo]

Private schools only buy you one thing and it is not better teaching. In fact what you buy is QA the quotient of aspiration.

All children that attend private school have, by definition almost, aspirational parents. Parents that care about the benefits of education. The average QA is high in a private school.

In a comprehensive school you have highly aspirational families, you also have families that don’t give a hoot about education. The average is lower than in a private school.

The QA is fundamental to the ethos of a school, it’s the second most important factor. It’s the thing that encourages kids to strive for better. The first is the headteacher. A good one makes a school and a bad one can break it.

This is why grammar school are so bad/good. They drive aspirational parents to one end and lower completely the average QA of the comprehensive.

Almost completely agree, but you have missed three things.

1. Private school pupils benefit from smaller class sizes.
2. You are unlikely to find inexperienced teachers in private schools
3. Private schools offer scholarships and bursaries to bright pupils whose parents might not be able to afford the fees. The benefit of having a rich dim child sitting next to a poor bright child should not be underestimated (for the rich dim child).

 

[andyinluton]

Just google the news for some top private schools.

Harrow – teachers son stabbed student
St Pauls - 2 former staff members being investigated for historic sex abuse
Eton House - master convicted of child sex offences.

I can't see the appeal myself......

 

[Amarillo]

Just google the news for some top private schools.

Harrow – teachers son stabbed student
St Pauls - 2 former staff members being investigated for historic sex abuse
Eton House - master convicted of child sex offences.

I can't see the appeal myself......

Only one state school makes it to the top 100 in this league table by GCSE results.

Best Schools - Top 100 Schools by GCSE

And that school is selective by gender.

The fees of these schools is eye-watering. Our local school, Eltham College, just up the road, charges £22,230 per year, more than double than I expected. I’m not sure we could afford to send two boys there.

 

[andyinluton]

Only one state school makes it to the top 100 in this league table by GCSE results.

Best Schools - Top 100 Schools by GCSE

Thats skewed statistics though. If you don't stand a chance of getting any GCSEs you are not going to get into the private school in the first place.

If say the private school only accepts pupils in the top 20% then the only fair comparison would be with the results from pupils in the same top 20% that went to state school.

 

[Amarillo]

Thats skewed statistics though. If you don't stand a chance of getting any GCSEs you are not going to get into the private school in the first place.

If say the private school only accepts pupils in the top 20% then the only fair comparison would be with the results from pupils in the same top 20% that went to state school.

Grammar schools might only accept the top 20%.

The main criteria for acceptance into a private school is the parents’ ability to afford the fees. (They may reject the bottom 20%, and accept free-of-charge the top 5%).

 

[The Tall Luthier]

Thats skewed statistics though. If you don't stand a chance of getting any GCSEs you are not going to get into the private school in the first place.

If say the private school only accepts pupils in the top 20% then the only fair comparison would be with the results from pupils in the same top 20% that went to state school.

Try Googling ‘Top Footballers’, you will come away with a skewed impression that all Sunday league footballers are being paid ridiculous amounts of money. Same with private schools.

Most are non selective, most are non boarding, most are nowhere near as expensive as Eton at £45k+ a year.

They’re businesses, the operate in a market place and have to attract parents, that do not have limited funds. Their criteria for acceptance is not like Eton schools. Eton is impervious to the wealth of its parents, its entrance Criteria is purely academic. Oligarchs can not get their weak child in there.

 

[The Tall Luthier]

Almost completely agree, but you have missed three things.

1. Private school pupils benefit from smaller class sizes.
2. You are unlikely to find inexperienced teachers in private schools
3. Private schools offer scholarships and bursaries to bright pupils whose parents might not be able to afford the fees. The benefit of having a rich dim child sitting next to a poor bright child should not be underestimated (for the rich dim child).

1) class sizes predominantly assist the teacher, so yes there is a benefit, the teacher has less marking time so more planning time. The quality of learning isn’t affected particularly. I’ve taught bottom set classes with 12 students that were a nightmare to teach, the average level of aspiration was not good. They were nice kids though.

2) There is absolutely no difference in the quality of teaching, they all come from the same pool. I think that if there were, the difference would be reversed. Excellent teachers can often be ideologically welded to comprehensive education, they are passionate about making a difference.

3) I don’t know about bursaries.

 

[Amarillo]

1) class sizes predominantly assist the teacher, so yes there is a benefit, the teacher has less marking time so more planning time. The quality of learning isn’t affected particularly. I’ve taught bottom set classes with 12 students that were a nightmare to teach, the average level of aspiration was not good. They were nice kids though.

2) There is absolutely no difference in the quality of teaching, they all come from the same pool. I think that if there were, the difference would be reversed. Excellent teachers can often be ideologically welded to comprehensive education, they are passionate about making a difference.

3) I don’t know about bursaries.

An interesting article in The Economist.

https://www.economist.com/international/2023/06/08/should-you-send-your-children-to-private-school Should you send your children to private school? from TheEconomist

You might not be able to view unless you subscribe to the paper, so here are a few key points.

6.5% of British pupils attend private school.

By age 25 Britons with a private education earn 17% more.

By age 42 this has widened to 21% for women and 42% for men.

This might be partly to do with professions entered, eg finance, for private schoolers, alumni networks and parental expectations.

Private scooters get more and better qualifications, but one study suggests it is only equivalent to moving from AAB to AAA at A level.

20% of privately educated pupils go to one of the 24 “Russell group” universities (a group that includes most of the best ones). But by age 16-19 private schoolers make up 18% of pupils.

4% of Oxbridge entrants are private schoolers compared to around 70% of state schoolers (the remaining 26% are, presumably, overseas students). This suggests that a student is more likely to get into Oxford or Cambridge if they attend state school.

 

[andyinluton]

6.5% of British pupils attend private school.

By age 25 Britons with a private education earn 17% more.

By age 42 this has widened to 21% for women and 42% for men.

Again its a case of you can show whatever you want with statistics.

"By age 25 Britons with a private education earn 17% more." - more than who?
The people that were at the same standard as them at school but just happened to go to state school? or the average income for people that went to state school including those for whom writing their own name would be seen as an achievement, let alone sitting an A level?

For a person with thick kids it may be worth sending them private as they will get special tutoring at a private school ( at an additional fee of course ) whereas at a state school they would be more likely to be put in the special needs class. There is absolutely no reason why a normal intelligent kid won't do well at a half decent state school.

 

[RockinNRollin]

4% of Oxbridge entrants are private schoolers compared to around 70% of state schoolers (the remaining 26% are, presumably, overseas students). This suggests that a student is more likely to get into Oxford or Cambridge if they attend state school.

Careful using percentages like that; it's meaningless without knowing how many applicants there are. I would be surprised if the rate of success for private schoolers isn't higher than for state schoolers.

I experienced both private and state schooling during my education years (admittedly this was over 20 years ago, so things may have changed) - my thoughts;

- Private schools tend to have entrance exams (although they are not all equal!) - this means that all students have some level of academic ability which is suited to a wholly academic environment (vs state schools that might lay the foundations of a vocational career / apprenticeships)

- Noted on the point above about QA, the other component is parents are much more likely to take action on any report from the school of their child being disruptive given the money they're paying "I didn't pay all this money for you to mess around"

- There were issues in both types of schools in my experience, but with parents who were teachers in each, I had some first hand accounts from two secondary schools both in the same area, one private and one state; the latter had significantly more problems with behavioural issues, drugs and weapons, and this was 20 years ago when pupils hadn't yet fully grasped the "I'm entitled: you can't do anything to me" tagline

- Private schools will often add significant extra-curricular value, e.g. clubs, societies etc.. as these schools see this as key additional offerings. You can get these in state schools, but generally only where you have a particularly enthusiastic and dedicated teacher, but even then they're unlikely to get any funding to actually support it (unlike in a private school)

- Preparing for life: well, to think a private school is totally sheltered and full of very wealthy and innocent pupils is inaccurate - they're still kids and still get exposed to much of the same, there's still bullying and all the usual social issues associated with schools, it's just that within the school boundaries it tends to be much more heavily policed in a private school

My conclusion; I remain to be convinced there's much benefit to sending a child to a private school for primary-level education, unless the schools in the area are particularly bad. When it comes to secondary level, I think it depends on the child and your own circumstances. If your child wishes to pursue a career as a mechanic, I think there's less to be gained from a private school, but if your child has a keen interest in academic subjects then a private setting may prove to be more value-adding, particularly if they're bright and/or studious. How you measure that value against how much £££ it costs to send them through that, that's tricky and something only the parent can decide.

 

[andyinluton]

Also worth pointing out that the school fees are just the start of the costs, I used to do the bank transfers for my boss with 2 boys at top private schools, the ski trips at £3500 each, lunches, uniforms (straw boaters cost a bit!) , books, more books, rugby kit, transport to rugby games, ditto cricket, ditto Hockey, musical instruments, theatre trips etc etc, think along the lines of £7.5k each in additional costs per child per year, the dad thought himself lucky that they didn't join the flying club....

 

[soulstyledevon]

Within my inner circle of friends. Two were privately educated. One now owns a strip club and the other is a teacher at a private school.
I think the education was lost on these two…

Another close couple, both of whom were state educated, and ended up with doctorates in their fields of study, Have sent their boys private. So far the eldest has had his leg broken in two places in a friendly game of lunchtime football (it’s complete changed the poor kid)and their youngest has behavioural problems.
It will be interesting to see how our boys turn out in years to come, as we’ve sent ours to the local state school and happy with his progress, learning and maturity.

I’m convinced, parental guidance/support is a much higher factor than what school they attend. Hence why I work part-time and believe being around to support them will pay dividends in the long run…