The reasons for any business requiring payment up front are many and varied - and irrelevent to the point that anyone who pays up front for anything is vulnerable to the failure of that business. That's perhaps neither here nor there when you're buying something for a few quid, but when you're spending several tens of thousands of pounds, you owe it to yourselves to protect that money. After all, could you afford to finance your ATPL training twice?
It doesn't matter how wonderful you think your chosen school is; any business - particularly those which have high recurring costs, such as flying schools - are extremely vulnerable to problems with cash flow. Cash flow is totally dependent on demand, and demand is a variable affected by all sorts of things, most of which are outside the school's control.
There are various ways you can protect your cash, and they've all been discussed before: escrow accounts, paying by credit card, paying at weekly or monthly intervals and so on. All of these methods reduce your exposure to financial risk. The school that asks you to pay up front in return for some kind of discount (and many schools do this) do so to help their cash flow, and you must understand that your risk is much increased by taking this option. You may well be lucky - as are the vast majority of students - but you may not. There is a long and distinguished list of failed flying training schools, some with impeccable reputations right up to the time they closed their doors. In every case, significant numbers of wannabes lost money. Some of them lost their entire training budget having never flown at all. As one of many creditors, and, as a customer, you are at the bottom of the creditor list and you stand little or no chance of ever getting any of your money back. Don't believe me? Ask a lawyer. Or do a search on some of the schools already mentioned that have failed; read the stories of those left high and dry with a £50,000 loan to pay back and no chance of getting another one to pay for the training they didn't get. They are heartbreaking. Years later, there are still those who live in the forlorn hope that they can retrieve something from the mess. They might, but it won't be their cash!
It is up to you whether you wish to take this risk, but you have to understand what the risk is - and understand that's it's real, not theoretical. Sod the schools, look after yourselves first.
Scroggs