Unofficial Christ's Hospital Forum

Neill and I will keep prodding each other, just so we don't doze and keep the banter going !!

Noooo, don't prod Neill, let him sleep!!! When he wakes up just fill him in on what he's missed

Okay, lets take a look at this 12 1/2% thing. "Average" wages somewhere around £25K, and 12 1/2% of this is somewhere around £60 per week which is somewhere around average council house rent. Therefore perhaps what is being said here is that CH is really here to help the financially needy and the ability or choice to spend more than this amount indicates that someone is not quite so needy. It may seem unfair that a greater allowance is not made, and lets face it private rents and minimum mortgages are well above this figure, but in fact it makes sense that all the "allowances" should be set at the subsistence level so that everyone starts at the same level playing field, no matter how poor. It is actually more important that the poor "assessee" is able to take full advantage of the allowance rather than not. This latter case would make it very difficult to differentiate at the lower income levels and award fair assistance. The setting of an allowance at the 12 1/2% does not say that you may not spend more than that, it simply ensures that everyone has the opportunity for that to be taken into consideration.

TrueBlue wrote:Okay, lets take a look at this 12 1/2% thing. "Average" wages somewhere around £25K, and 12 1/2% of this is somewhere around £60 per week which is somewhere around average council house rent. Therefore perhaps what is being said here is that CH is really here to help the financially needy and the ability or choice to spend more than this amount indicates that someone is not quite so needy. It may seem unfair that a greater allowance is not made, and lets face it private rents and minimum mortgages are well above this figure, but in fact it makes sense that all the "allowances" should be set at the subsistence level so that everyone starts at the same level playing field, no matter how poor. It is actually more important that the poor "assessee" is able to take full advantage of the allowance rather than not. This latter case would make it very difficult to differentiate at the lower income levels and award fair assistance. The setting of an allowance at the 12 1/2% does not say that you may not spend more than that, it simply ensures that everyone has the opportunity for that to be taken into consideration.

I think you have a valid point. I do wonder if you can really get a council house for £60 a week (I don't know, I just suspect they might be more than this).

It might be a good idea to work out what the average 3 bed council house (or some other standard house on a mortgage costs), and then allow that as a maximum, rather than a percentage. For example, if you can get a mortgage for a 3 bed semi for £300 and the council house rent is also £300, then why not say "you can claim a maximum of whichever is the lowest of your actual cost or £300.

TrueBlue wrote:

Okay, lets take a look at this 12 1/2% thing. "Average" wages somewhere around £25K, and 12 1/2% of this is somewhere around £60 per week which is somewhere around average council house rent.

I'm prepared to accept both these figures, although I don't personally know the average council house rent (in our neck of the woods, I believe that 'council housing' actually no longer exists as such!). But I do suspect that a person earning the average wage of £25K would be unlikely to qualify for subsidised housing, so comparing these two figures is probably unrealistic! Surely it would be more relevant to take into consideration the average percentage of net income paid out as mortgage/ private sector rent, which a quick search on the web would indicate to be about 30%.

TrueBlue concludes

The setting of an allowance at the 12 1/2% does not say that you may not spend more than that, it simply ensures that everyone has the opportunity for that to be taken into consideration.

No, the setting of an allowance at 12.5% does not say that you may not spend more than that, but it does fail to recognise that the vast majority of families will have to! And it ensures that for many 'average' families, the opportunity of a CH education is no longer an option.

council owned properties near me (3 beds) are £400 per month, however the private rental for which housing benefit can be paid for a 3 bed is £1,125 - so someone on income support with 2 children would receive £10k ish in benefits could earn a further £1,300 without losing any benefit plus £13.5k in housing benefits plus council tax benefit (£1.5k ish) - so they would end up with a free education at CH however if you were earning £26.3k with a mortgage of over £4k per year you may well end up having to pay something.

It is crazy. I find it astonishing that will consider your equity in your house if it is over £500k - if you have that much equitey surey downsizing/remortgaging is a possibility???? We have extended our terms to 30 years again to get it to as near as 12.5% as we can - it's still about 15% though which ends up being nearly 25% of our net income and I don't think there is a cheaper 3 bed than the one we live in (very small terrace with postage stamp garden in not a very nice area), it was the only 3 bed we could afford when we bought it 7 years ago - with 4 children going to a 2 bed isn't really an option.

I must say I also find allowing £500k of equity in a house astonishing, if that is really the case, particularly if pension pots and contributions are not "allowed". I have to say that when I am assessing means testing, all equity, houses, pension pots etc are considered and allocated a notional income. In other words every £100k in capital produces a notional £4.5K income per annum.

ZZZZZZZZZZZ ! Eh -- what ? -- Who nicked me Whiskey ? ----- ZZZZZZZ !

At the risk of sending Neill back to sleep...



TrueBlue wrote

I must say I also find allowing £500k of equity in a house astonishing, if that is really the case, particularly if pension pots and contributions are not "allowed". I have to say that when I am assessing means testing, all equity, houses, pension pots etc are considered and allocated a notional income. In other words every £100k in capital produces a notional £4.5K income per annum.

Am I the only person who finds this astonishing? Particularly with current interest rates at somewhat less than 4.5% net...

ReallyMissingHer suggests that downsizing or re-mortgaging may be the answer. We've actually considered the latter option ourselves: but one must remember the 'CH trap', which would mean that if you were to re-mortgage, the additional monthly expense would not be recognised in your assessment but the capital raised would be counted as an asset, and your fees (as well as your mortgage repayment) would be increased even further!

We ourselves have built up fairly substantial equity in our modest home, simply by virtue of having bought it nearly 20 years ago while house prices were still relatively affordable; and I can easily imagine that a family living in London for this period could now have equity of £500k even on a 3 bed semi. But this is simply 'paper money': it is not capital, and is not sitting in the bank available to be spent, any more than a pension pot is. I only wish it were!! Sadly we live in the real world, and are still paying out a substantial monthly sum - disregarded by the CH fee assessment - into both our mortgage and our pensions, and I can assure TrueBlue that neither of these produces any income, notional or otherwise!

I do feel strongly that if it is now implicit that in accepting a place at CH for your child you must be willing to consider selling your home or sacrificing your occupational pension, then the Foundation has a duty to make this clear to prospective parents from the outset.

ailurophile wrote: ReallyMissingHer suggests that downsizing or re-mortgaging may be the answer. We've actually considered the latter option ourselves: but one must remember the 'CH trap', which would mean that if you were to re-mortgage, the additional monthly expense would not be recognised in your assessment but the capital raised would be counted as an asset, and your fees (as well as your mortgage repayment) would be increased even further!

ReallyMissingHer has said a couple of times now that she re-mortgaged, not to raise capital, but to extend the term of her mortgage (I think she said back to 30 years), which reduced her monthly repayments thus getting them closer to the 12.5% allowed by CH in the fee assessments. Could this be an option for you to solve your fee problems?

ReallyMissingHer has said a couple of times now that she re-mortgaged, not to raise capital, but to extend the term of her mortgage (I think she said back to 30 years), which reduced her monthly repayments thus getting them closer to the 12.5% allowed by CH in the fee assessments. Could this be an option for you to solve your fee problems?

Thanks for this Lonelymom, but as it happens we have already extended the term of our mortgage and will still be paying it off some years into my husband's retirement (another reason why we can't afford to drop out of our occupational pension schemes!). By today's standards our mortgage is in any case smaller than average, so we are probably better off in this respect than most families - and yet we're still struggling to pay the assessed fees! (I'm still hoping that TrueBlue will get back to me to explain how we can create £9000 pa income from a nominal £200,000 equity...)

As has been said elsewhere on this Forum, everyone's circumstances are different. To return to the wider picture, the issue is surely not whether individuals can take drastic measures to borrow enough money to meet the assessed fees, but whether the assessment is sufficiently fair in expecting that some families should have to do so.

Reading through these posts and others it does seem to me that the CH process is due for a major overall. It is clear (now that I've read this forum!) that CH, despite its huge endowment, is suffering from the Micawber trap of outgoings exceeding incomings. Not due to profligacy but just because that's the way things go sometimes. That may or may not prove to be temporary (and temporary could be a 10-30 year period in the context of such a venerable institution). However, this forum also makes it clear that the assessment process is squeezing some parents just too tight and to the extent that CH is unaffordable for the original child let alone a second. That is serious because it means that CH is in danger of being unaffordable to anyone who is earning above the smallest amount. It's also unfair because a hugely subsidised fee which is just beyond your grasp can be as unattainable as a full fee (and yet there seem to be teenagers from the lowest income homes who have £20-30 'pocket money'!?) It seems reasonable to me given those circumstances that CH should decide to have some full-fee payers. What is not really not satisfactory is that all this seems so untransparent. For example, where to get these full-fee payers when even people who know CH fairly well think the income bar is still in place? All the literature still talks of "need for boarding". And truly, how is one to work out the criteria for admission - clearly doing well in the exam is still necessary but after that it just seems so opaque. Please believe me, I am not slagging CH off - on the contrary - but it doesn't seem to me that this is a sensible way of going about things or getting in even a small proportion of full fee pupils (if that is one of the solutions that has indeed been decided).

Dusty wrote:

Reading through these posts and others it does seem to me that the CH process is due for a major overall. It is clear (now that I've read this forum!) that CH, despite its huge endowment, is suffering from the Micawber trap of outgoings exceeding incomings. Not due to profligacy but just because that's the way things go sometimes. That may or may not prove to be temporary (and temporary could be a 10-30 year period in the context of such a venerable institution). However, this forum also makes it clear that the assessment process is squeezing some parents just too tight and to the extent that CH is unaffordable for the original child let alone a second. That is serious because it means that CH is in danger of being unaffordable to anyone who is earning above the smallest amount. It's also unfair because a hugely subsidised fee which is just beyond your grasp can be as unattainable as a full fee (and yet there seem to be teenagers from the lowest income homes who have £20-30 'pocket money'!?) It seems reasonable to me given those circumstances that CH should decide to have some full-fee payers. What is not really not satisfactory is that all this seems so untransparent. For example, where to get these full-fee payers when even people who know CH fairly well think the income bar is still in place? All the literature still talks of "need for boarding". And truly, how is one to work out the criteria for admission - clearly doing well in the exam is still necessary but after that it just seems so opaque. Please believe me, I am not slagging CH off - on the contrary - but it doesn't seem to me that this is a sensible way of going about things or getting in even a small proportion of full fee pupils (if that is one of the solutions that has indeed been decided).

Spot on, Dusty! The current system does need a major overhaul. I appreciate that the Foundation is suffering from "the Micawber trap of outgoings exceeding incomings"; but then so are we! Placing more and more parents in the same plight by increasing fees is clearly not going to be the answer! We currently seem to have a situation where (1) the Foundation can no longer afford to support only low-income families; (2) middle-income families can no longer afford the increasingly unrealistic assessed fees; and (3) CH is bound by its own rules to accept only a limited number of full fee paying parents, for whom there is fierce competition with other top schools!

I wouldn’t like to be the person to have to come up with the solution to what appears to be a hopeless situation (we can’t even resolve our own hopeless situation!!). But it is clear that a serious review of the admissions and assessment procedures is urgently required: I suspect that tinkering at the edges of the status quo is not going to be enough.

Sorry about this folks but a quick look at any of the search sites will reveal simple options for bonds producing 4.5%, before tax. Money being worked, and belive me people with £500k in cash make sure the money is being worked, will produce more than this, even in this climate. In addition, in the calculation of means tested assessment, this is a notional income, and it already accepts that the person has made a choice to retain the equity in either cash or as equity in a property or a pension fund which is still available, rather than coverting that equity into a more liquid form such as cash to pay the fees. I am sorry, but I do see little difference between equity, pension fund, and cash. Both of the former can be borrowed against or promised to raise cash, and I feel that none of us would feel happy about someone sitting on a pile of £100k, £200k or £500k of cash whilst receiving a subsidised education which perhaps a more financially deserving case is being denied. I have said before that both ends of the income scale are easy to assess, the very rich should pay not just full fees but full fees+, and the very poor should pay very little, but the sliding scale inbetween is very difficult to deal with.