In recent years there has been an increase on the reliance on grandparents, and this is predicted to grow.
Cook says: “I've seen an increase in requests from those individuals [in the typical middle band] to draw out money to perhaps help the next generation along" He says they "were traditionally able to send their kids to private school through earned income, but can no longer afford it".
“And grandparents are now concerned that their grandchildren will be taken out of those schools.”
He says people are also planning to work a little bit longer than they ordinarily would have, due to the impending fees.
Additionally, there is also a knock-on effect, where the grandparents could have less to live on as they get older, a situation made even worse if they need to pay for long term care.
He adds: “I think Labour has done a massive overcalculation of how much additional revenue they think they're going to bring in, because independent schools now are going to be able to reclaim VAT on anything that they spend.”
If private schools become VAT-able businesses they will also be able to claim back the VAT they spend on goods and services.
It is not yet know how soon the plans would come into place if and when Labour wins.
Cash flow modelling
Carl Green, director of financial planning at Evelyn Partners, says: “There has been a lot of fear that Labour will make it a priority and will, in some way, bring in sort of emergency legislation to tackle the issue”.
To help his clients prepare and gain a better picture of their finances in the face of the 20 per cent tax, Green has been using cash flow modelling.
He says: “[In our industry] we know the importance of cash flow modelling; giving clients the ability to model what a 20 per cent hike looks like, how it might feel and whether it's affordable for them, or whether there's a shortfall they're going to have to go and tackle. It is helping to give give some clarity."
Green says: "Twenty per cent [might] feel like a big headline grabbing number, but actually, if you put it into the context, you can afford this. That peace of mind that it gives is why we're an adviser. We might not be taking concrete steps today but we can start planning."
He says his wide gamut of clients means there are some for whom a 20 per cent hike in VAT will cause annoyance more than anything else, but he also has clients for whom this tax increase will be unaffordable.
About half of his client bank he has spoken to will likely need to make some lifestyle changes, such as reducing pension contributions.
