Britain’s top private schools are hoarding hundreds of millions of pounds as middle-class families face pulling their children out of classes over soaring fees, Telegraph analysis reveals.
Since 1997, boarding and day fees have increased dramatically, and have risen well above inflation – making private schools unaffordable for many families.
Labour’s plans to charge VAT on school fees is also now forecast to force as many as 40,000 pupils out of the independent school system.
Telegraph analysis of Charity Commission data shows that while boarding and day fees have hit record highs, some schools have made record income from stock market investments and are now holding hundreds of millions of pounds in cash savings.
The average boarding fee for one student was £10,715 per year 16 years ago. In 2022, it had risen to £39,000. Day fees have jumped from £7,199 to £15,654 during the same period.
Eton, one of Britain’s most prestigious schools, now charges on average over £46,000 a year per student, up from £30,000 charged only a decade ago, and a 20pc rise since 2017.
Despite fees rising to record levels, Charity Commission data shows that Eton had £562m in “consolidated reserves” at the end of last year.
Most private educational institutions in Britain have “charitable status”; they are not supposed to make a profit but are technically allowed to have funds left over each year in an account or trust that is supposed to be spent on charitable things and the running of the school, including teachers’ pay.
It raises questions about why some private schools are raising fees when they are sitting on hundreds of millions of pounds.
Eton is not alone in raising fees while sitting on a large amount of savings and stock market returns.
Winchester College, Rishi Sunak’s old school, saw its income hit £52.5m last year – a big rise from the £30.6m it brought in six years ago.
The school got most of that income from students’ fees (74pc), which have increased 21pc since 2017.
It also saw a 20pc rise in its cash savings, with reserves at the end of 2022 reaching £434m. Winchester is also making serious money on its investments, and has seen its portfolios rise by 19pc to £320m at the end of last year.
Radley College, in Oxfordshire, had £148m in reserves by December 31, 2022, and Harrow – Winston Churchill’s former school – held £192m.
The latter also hit £68m in income for the year, £44m of which came from fees, which have risen 13.5pc over the last six years.
Harrow’s investments have grown by 275pc since 2017, rising from £46m to £175m at the end of 2022.
At the same time schools’ income and reserves increase, the rising fee burden on middle-class families is making it harder for them to afford to send their children to private schools.
A spokesman for the Independent Schools Council, a body that represents hundreds of schools in Britain, said many fee-paying schools are having to work on wafer-thin margins after suffering from higher bills.
He said: “These schools are not for profit and so any money made will be invested back in educating children, whether directly in the classroom or through bursary and partnership schemes.
“While these schools may be some of the most recognisable, they are not representative of the majority of the independent sector.”
Telegraph analysis shows that although many smaller fee-paying schools do in fact run on small margins, many of the larger institutions do not.
Staff pay at these schools has increased in recent years in line with income rises.
The increase in income from fees across 20 schools this paper analysed (£640m) has broadly matched the increase in staffing costs, with both rising by 24pc since 2017.
Eton now pays around 50 staff members over £100,000 each a year, a jump of 20pc in six years. Harrow pays 17 of its staff over £100,000 per annum, with five employees at Winchester earning around the same.
There are 20 schools Telegraph Money analysed, and they listed £440m of capital commitments between 2017 and 2022, funding projects ranging from boarding house extensions to new sports centres.
Some 57pc of private schools across the country have tennis courts, 41pc have pools, a third have dance studios and 6.5pc have rowing facilities, according to the ISC.
Schools and their facilities are expensive to maintain and run, especially during a cost of living crisis. But it appears that the biggest British schools have far more cash and investment holdings that can more than cover running costs.
A Eton spokesman said: “Eton College is a charity for the advancement of education. Our endowment is neither a reserve nor a surplus but exists to support Eton’s work as a charity and is managed to achieve long-term growth.
“The annual draw-down from the endowment funds our bursaries and partnerships programme. We are very proud to be able to offer over 100 pupils a free place at Eton and to support almost 20pc of all pupils with some level of fee remission.
“Eton’s endowment works hard every year to provide broad educational benefits, as it has for centuries.”
Harrow, Winchester and Radley declined to comment.
CORRECTION: An earlier version of this article had the following headline “How Eton built a £1bn cash pile - while parents battle soaring fees”. This was incorrect. Eton College has consolidated reserves of £562.1 million. We are happy to make this clear.
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