WHETHER or not you believe school days are the happiest of your life, it is undeniable that the foundations laid during this period have a profound effect, not just in terms of the acquisition of knowledge but also in the formation of friendships and even of attitudes.

In Scotland, around 31,000 children are educated privately, some 4% of the total. There is competition for pupils. Glossy brochures are often produced with photos of the school play and the orchestra in full flow. But however impressive the extra activities such as clubs and sports, the vitally important thing should be the academic record.

The independent sector has come under pressure, particularly with the move away from boarding. Modern parents are reluctant to pack children off to boarding school and there is a move towards co-education. But it is not only boarding schools which have been squeezed. In recent years Westbourne and Park schools have merged with others, reducing choice for parents in the West of Scotland looking at private education for a daughter.

The High School of Glasgow has just over 1000 pupils and fees start at #855 a term for the first year of primary, rising to #1506 in the penultimate year. The final year of the secondary course is cheaper, with the fees reducing to #1200. ''It is a deliberate policy to make the sixth year more attractive,'' a spokesman says.

Ten per cent of pupils at the High School have assistance with the fees, which can come in a number of ways. Some fees are discounted; there are bursaries, and some children are eligible for assisted places.

The Labour Party has vowed to abolish the assisted places scheme, which uses public funds to pay all or part of private school fees for children from lower income families.

Labour has said that no new pupils would join the scheme after it came to power, although there would be arrangements for the fees of those who had started secondary education to continue receiving assistance until they were ready to leave school.

David Porter, a financial adviser with solicitor Brunton Miller, makes the point that funding school fees out of income is never going to be easy. ''The earlier you start making plans the easier it will be. There is no need to go for a branded school fees plan.

''You can make your own arrangements quite effectively using several types of investment. The branded school fee plans usually consist of a series of endowments designed to mature at one-year intervals. People should look at the charges which can be quite high. These plans tend not to be very flexible,'' he says.

Before starting a savings plan there are a number of key questions which ought to be addressed. Parents should look at the likely level of the fees and when they become due. The cost of university education should also be taken into account. Once expense issues have been explored, possible methods of financing can be considered.

''Risk, flexibility and tax efficiency are some of the key aspects of an investment plan for school fees. If equity investment, such as a personal equity plan is being used, then the track record of the fund manager is another important feature,'' Mr Porter asserts.

Building societies provide a low-risk environment for long-term savings, building up a nest egg which can help pay fees. Mr Porter points to attractive rates being offered by the Nationwide and Bradford & Bingley for regular savings.

Tax-exempt special savings accounts (Tessas) also pay good rates of interest in a tax-free environment. Savers must invest over a five-year term to qualify for the tax break. A total of #3000 can be invested in the first year and up to #1800 in the four subsequent years to a total of #9000. Rates tend to be around 6.50%. Mr Porter recommends people use their maximum allocation as part of a fees plan.

Peps also offer a tax-free environment and considerable flexibility. Up to #6000 can be invested in each tax year in a general Pep. ''As with any equity investment there is a risk attaching to Peps, but some of the corporate bond ones have a fairly low risk profile,'' Mr Porter says.

He is enthusiastic about traded endowment policies (see article on page 28). ''There is a market in endowment policies which are no longer required by the people who took them out. There are a number of policies available starting at around #3000 and it is a low-risk investment. It would be possible to choose a series of policies with progressive maturity dates from two to 15 years into the future.''

Borrowing is yet another option. The Bank of Scotland's School Fees Funding Plan allows parents to defer the cost of private education. If, for example, someone wanted assistance with four years of fees, the plan would spread the cost over eight years.

Interest is variable and set at 5% over base, giving an APR of 11.69%. No security is required for amounts of less than #15,000, but larger advances will be secured over property. Life and unemployment in-surance are also available at extra cost.

Mr Porter points out that remortgaging is an option for those who have not made advance provision for school fees. Money can also be borrowed over unencumbered endowment policies.

There are some general rules parents thinking about private education should consider:

n Commit to maintaining a savings plan once it is started.

n Plan well in advance.

n Always choose a tax-efficient solution.

n Build the effects of likely inflation into the plan.

n Work out what risk profile you are comfortable with.

n Take appropriate advice.

n Do not leave taking action until the last moment.

n Do not borrow more than you can afford.

n Remortgage only as your last resort.