29 independent schools have been forced to close so far in 2025, with many citing the new VAT on private school fees as rendering independent schools no longer financially viable.1 Multi-academy Trusts (MATs) are also experiencing higher operational costs, with nearly 60% of MATs making an in-year deficit in 2024.2
The 20 per cent VAT on private school fees, alongside a further increase in national insurance contributions across the entire education sector, mean many schools are facing unprecedented financial challenges.
Many schools are now rethinking their banking strategies with a focus on maximising interest earned on their cash reserves.
With the increase in national insurance contributions under the incumbent Labour government, coupled with high inflation levels and rising energy costs, many schools are experiencing soaring operational costs.
In January 2025, a report by the Institute of Fiscal Studies (IFS) estimated that school costs will outpace school funding in 2025-2026. According to their research, school costs will rise by 3.6%, while school funds will only increase by 2.8%.3
Although IFS’s findings focused on the state sector, independent schools face similar issues. Research by the Independent Schools Council has shown that pupil numbers have fallen by 11,000 (or 2%), meaning a reduction in revenue. Of this figure, boarding schools have been the most affected of the independent sector, seeing a 4% decrease in pupils numbers.4
Multi-Academy Trusts, too, are facing rising costs, with some MATs reporting a 20% increase in staff costs per-pupil since 2023.5
However, despite the widespread financial challenges, many schools are overlooking a key resource which can boost their revenue: their cash reserves.
A cash deposit aggregator (also known as a cash savings platform) is an online marketplace where users have access to multiple banking partners – all with one application to the platform.
Rather than applying to each bank directly and filling out multiple applications each time, users of a cash deposit aggregator can open new savings accounts with a wide range of providers in just one application.
Alongside a great variety of high interest savings products – with Instant Access, Notice Accounts, and Fixed-rate terms of various lengths available to choose from on the platform – a cash deposit aggregator allows users to maximise their FSCS protection of £85,000per banking institution across multiple banks.
This means that schools can avoid overexposing their funds in one bank, an important consideration which adds another layer of protection to their finances.
Cash deposit platforms also have enhanced cyber security over a traditional high street bank. Alongside Multi-Factor Authorisation, Akoni utilises a ‘closed-loop system’, which ensures that the user’s Hub account can only be funded by a nominated bank account, and withdrawals from the platform can only be sent to this nominated bank account. All transactions are reviewed by our Operations team before being actioned.
Together, these measures significantly reduce the likelihood of a school experiencing unauthorised remote bank losses, which were as high as £141.3m in 2024.6
Since 2023, we’ve helped a wide range of UK schools boost their interest earned and improve their financial security. In 2025, Akoni was recommended to members of the FD Forum, a trusted space for school financial professionals to share insights, challenges, and best practices.
If you’re in charge of school finances, get in touch today to find out how Akoni could improve your interest returns and financial security. Email contact@akonihub.com or call 020 3137 9388.
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Sources:
1) How many UK independent school closures will happen in 2025? | School Management Plus
2) Kreston-UK-Academies-Benchmark-Report-2025-Clive-Owen-LLP.pdf
3) Annual report on education spending in England: 2024–25
4) Ibid.
5) Kreston-UK-Academies-Benchmark-Report-2025-Clive-Owen-LLP.pdf
6) UK Finance Annual Fraud report 2025.pdf
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