Schooling and Your Bank Account - 2015 Survey

What percentage of someone's household income should be spent on education? In truth, this is almost an impossible question to answer.
Schooling and Your Bank Account - 2015 Survey
By David Westley
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What percentage of someone's household income should be spent on education?

In truth, this is almost an impossible question to answer. This is partly because 15% of a household income of 15,000 AED a month is very different from 15% of 75,000 AED.

And then comes people's attitudes towards paying for education. In many countries in the world, education is provided by the state, with the private sector very much a personal choice.

In the UAE there is no choice - for expatriates at least.

To give some context, in the United Kingdom, the proportion of income spent on school fees for those who do decide to send their children to private school has been growing.

In 1990, average day fees, plus extras, for one child would have taken up 19 per cent of the average doctors’ salary, compared with 23 per cent for solicitors, 30 per cent for academics and 29 per cent for accountants. By 2014 however, fees for one child accounted for 36 per cent of a doctor’s disposable income, 47 per cent for a fund manager, 50 per cent for a solicitor, 51 per cent for an academic and 59 per cent for an accountant. Ouch.

However, as a result, the number of middle class families sending their children to UK private schools has been in decline. Parents are voting with their feet and choosing the state sector instead. This is not a choice available in the UAE.

That said, in terms of price points, UAE parents look better looked after.

In our survey we found, as in 2013, a very wide differential in how much income is eaten by school fees. For 80% of respondents however, the figure is less than 25%. For 75% it is 20% or less. For just over 55% of you it is 15% or less of your income.

With no income tax, this seems affordable - although of course it does not factor in the costs families also face for healthcare, and housing - which in the UAE is expensive.

It also ignores individual circumstances and the fact that 1 in 5 respondents paying in excess of a quarter of their earnings on education.

A range of factors determine how much a household will spend on education. Clearly the higher the income, and the lower the fees, the less of a burden education is.

The most blessed therefore are upper middle class Asian families that send their child to an Indian curriculum school, where fees are targeted at lower income groups. In fact, Indian families across the board are more likely to be spending less than 20% of their income on education than British, American or Western families.

Those that suffer most are low income Western Europeans or American families that send their children to UK, US or IB based schools that tend to target higher income groups.

Outside these outliers however, the simple truth is the more you earn the less you are affected by fees.

Those earning under 15,000 AED a month, that choose to educate their children in the UAE, are the hardest hit despite the fact that they will be cutting their cloth to fit their budgets. In total 46% of those earning between 11,000 and 15,000 AED spend more than 20% of their household income on education, a figure dropping to 27% for those earning in excess of 70,000 AED.

Moreover, 80% of a household income of 70,000 AED is considerably more than 80% of 15,000 AED.

The statistics clearly underline the need for more affordable education in the UAE. The difficulty and challenge for UAE regulators is justifying the investment to private investors. 

In Dubai, according to KHDA figures, 39% of students are currently in schools that cost less than 10,000 AED per year with fees ranging from 1,725 AED per annum and rising to 98,649 AED. While that may sound fairly balanced, of the 26 new schools opening in the last year, a cursory glance reveals that these are not schools in the affordable price bracket.

Private companies looking at maximizing shareholder capital are currently all looking at the logistically simpler, and seemingly more profitable premium sector - despite it being, arguably, already over supplied.

Given the student population in Dubai alone is expected to rise by over 100 000 from 2013, to stand at 360 000 by 2020 the challenge ahead, although formidable, is essential to all the emirates to get right if education itself is not to become the bottleneck to the country's 2020 and 2030 visions.


> Next: The criteria you use to choose a school
> Or: Benchmark your school - take the survey


Notes: The 2015 School Survey was completed by 676 families from across the UAE. The majority of respondents came from Dubai, then Abu Dhabi and finally Sharjah. Outside these three emirates the responses were not sufficient to be statistically significant. is keeping the survey running with the aim of being able to benchmark each school against a UAE norm. 


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