A large family is a new badge of wealth. What better way to prove that you are loaded than by having lots of offspring and educating them privately? The annual bill for four children at a London day school is about £54,000 before extras, such as saxophone tuition. The parents must earn some £90,000 before tax to fund fees alone.

But there are many mothers and fathers whose apparently ample means have been a masquerade made possible by credit cards and serial remortgaging. The price of the average detached house rose 40.8 per cent between 2002 and 2007, which allowed families to use their homes as cash machines to finance fees and other household expenditure. These were the parents who wore Marc Jacobs at sports day this term when Marks & Spencer should have been their outfitter.

This summer the credit crunch will cruelly expose those families who have been keeping up appearances on incomes that are not in the hedge fund league. They are faced with a particularly tricky piece of maths holiday homework: how to balance the family budget. Food and fuel bills are rising and the school fees have been increased yet again, just as house prices slide. Particularly hard-pressed will be those who have already plundered the equity in their homes. The calculations are made trickier by the new disinclination of banks to lend.

In 2006, two-year fixed rate deals of as low as 3.99 per cent were available. The price of this week’s best-buy two-year fixed remortgage deal from Abbey is 6.04 per cent. A homeowner paying off a £500,000 mortgage at the previous super discounted rate would see his monthly repayment go up from £2,636 to £3,234, a difference of £598 or £7,176 over a year.

Applicants who need a loan of more that 75 per cent of the value of their property will be turned away. For some, the “staycation”, the holiday at home, will be the first economy. Prepare to hear planet-loving protestations from families who used to spend August on a long-haul jaunt. Aldi, Lidl and make-do and mend will replace Marc Jacobs – and even Marks & Spencer. But, for some, such measures will not be sufficient to make ends meet and keep children in that expensive school. The answer to the maths homework problem could be a visit to the Citizens Advice Bureau or a call to the National Debtline on 0808 8084000.

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