Rising costs and tougher competition for admissions are reshaping the UK’s independent education sector, meaning every enrolment and fee payment carries greater importance. In this climate, parents are placing increasing value on clear fee transparency, making it vital for schools to manage change with confidence while preventing overdue fees from building up and threatening long-term financial wellbeing.
Keeping Control of Fees During Mergers
Rising costs, from staff salaries to unexpected maintenance are putting many independent schools under pressure. As a result, more schools are exploring mergers to share resources and strengthen finances. According to VWV’s Merger Watch, there were 39 mergers and acquisitions in 2022/23 and 46 in 2023/24. In 2025 the number has already reached 66, highlighting a growing trend towards consolidation to secure stability.
While mergers can strengthen long-term resilience, they also carry a risk of debt growth if not carefully managed. Parents may see a merger as a signal of financial difficulty and delay fee payments until they feel reassured about the future of the school. This hesitation can quickly lead to payment backlogs and rising levels of debt just when schools need cash flow most.
To avoid this, schools need a strong credit control process throughout the transition. Clear and transparent communication about how the merger will benefit pupils helps prevent overdue fees from building up and gives parents confidence in the future of the school. This openness builds trust that fees are being used responsibly and ensures the financial benefits of a merger are successfully implemented.
Stopping Backlogs from Derailing Development
With greater competition for admissions, many schools are investing in facilities to stand out to prospective pupils and parents. Research by Premium Credit found that 93% of UK independent schools plan to boost spending on facilities and staff, with a third expecting growth of more than 10% in the next two years. For these plans to succeed, fees must be paid promptly. When backlogs build up, not only do projects risk delay or cancellation but overdue fees can quickly escalate into long-term debt if left unmanaged.
One co-educational independent school overcame this challenge by partnering with us. We successfully recovered overdue fees which helped restore financial stability and enabled the school to reinvest in resources and plan ahead. Their experience demonstrates how preventing debt growth through proactive fee management enables schools to move forward with improvements and strengthen long-term appeal.
How Financial Stability Supports Recruitment
Teacher recruitment and retention is one of the most pressing challenges in UK education. For independent schools, sustaining a high-quality teaching team requires the financial capacity to offer competitive salaries and invest in professional development. When staffing is stable it supports strong pastoral provision, meaning pupils receive consistent care, guidance, and support for their wellbeing and personal development throughout their school life.
The NFER Annual Report 2025 highlights the scale of the challenge, showing vacancy rates are now six times higher than before the pandemic and competition for subject-specialist staff remains intense. In this environment, preventing debt growth is critical to protecting school budgets. If overdue fees are not managed effectively, funding can be pulled away from staffing, reducing schools’ ability to recruit and keep high-quality teachers. Strong prevention methods safeguard investment in staff, ensuring financial stability that strengthens both academic excellence and pastoral care, giving pupils the expertise and support they need to thrive.
Protecting Financial Health Through Prevention
The challenges faced by the independent school sector in 2025 make one thing clear, preventing debt growth is fundamental to long-term stability. Whether navigating a merger, investing in facilities or maintaining strong teaching and pastoral teams, schools need reliable processes that stop overdue fees from escalating and protect financial stability.
We partner with independent schools as an extension of their finance teams, providing a preventative measure against the build-up of overdue fees while also supporting recovery when needed. Redwood Credit Management ensures every fee is collected efficiently and with sensitivity, providing school leaders the financial certainty they need to focus on delivering exceptional education.
For more information on how we could support your school, visit our dedicated education page.
