Mature Student and Pensions

amibee · 13 June 2017 at 10:41AM

Hi everyone.

I'm a 30 year old mature student and I have recently just moved all my standard pensions into a fully diversified stock portfolio pension plan. I did this because I am not paying regular contributions to my pension now that I am a student and the interest was incredibly low, infact I was just losing money. I previously asked the question that I am about to pose to you of the new pension provider but I was told they were not able to answer it as it would be classed as "financial advice".

Basically, whenever I want to contribute to my stock portfolio I am required to confirm that I am a UK tax payer. Technically I am not currently a UK tax payer, I pay no tax on my student income from any part time jobs I undertake and no tax on my grants and maintenance loans.

The whole point of me setting up my diversified stock portfolio was so that I could invest what I currently had sitting in various other pension schemes into the stock market at a much higher rate for the next couple of years and add the odd couple hundred pounds to it every quarter upon receiving my next student payment.

I asked the new company if I could still do this but they we're as helpful as a kick in the teeth and sent me a blog link to read which was only for working/unemployed adults. Neither categories fully describe a mature full-time student.

Just to summarise:

I am a mature student, 30 years old
British citizen by birth
I don't pay tax per se
I want to make semi regular contributions to my FDSP
HOWEVER there is a box that I must tick to confirm that I am a 'tax paying UK citizen' when submitting contributions.

My question: can I still make contributions?

Thanks very much.

greenglide · 13 June 2017 at 11:27AM

Yes you can.

Since you would appear to have no qualifying earnings you can pay £2,880 into a pension which will be grossed up to £3,600 by the tax relief.

Treat the tax question as "you would pay tax if you earned enough".

This question may have been more relevant in the "Pensions, Annuities & Retirement Planning" forum.

eskbanker · 13 June 2017 at 12:09PM

amibee wrote: »

I have recently just moved all my standard pensions into a fully diversified stock portfolio pension plan. I did this because I am not paying regular contributions to my pension now that I am a student and the interest was incredibly low, infact I was just losing money.

<skip>

The whole point of me setting up my diversified stock portfolio was so that I could invest what I currently had sitting in various other pension schemes into the stock market at a much higher rate for the next couple of years and add the odd couple hundred pounds to it every quarter upon receiving my next student payment.

It sounds like you're heading in the right direction but I'm puzzled by your starting point - what various pension schemes were you involved in that paid interest, rather than investment gains? Were you advised to pay into multiple pension schemes that didn't involve any investment and if so, by whom?

amibee · 13 June 2017 at 12:34PM

Thanks for your answer I was confused about whether to put this in pensions or investments because the portfolio isn't just for my retirement it's for saving in general, so I can use it for anything but I'll be primarily using it for my retirement as I don't intend to touch it till I'm in my 70s. Super appreciate your help. Thank you very much I'll take that on board.

amibee · 13 June 2017 at 12:43PM

Hey, thank you for replying. I'll do my best to answer. So I had roughly a few thousand in an Aviva pension that was charging me more annually in fees than it was giving in interest, I was losing around 20p a year due to the fees. I am using these terms vaguely: investment and interest...probably because I am not entirely savvy. I believe my pension plans were invested in stocks and shares and that's how I obtained gains/interest, but no one advised us...I have mainly done this because it seems sensible, I'm still young ish and I could stand to make more of a return on my investments by taking riskier moves.
I also opened a virgin stakeholder savings plan when I was 18, this one I was not losing money on but seen as I was moving my biggest pension pot over I decided it best to have all my savings and pensions in one for ease of tracking.

amibee · 13 June 2017 at 12:47PM

All in all I had 3 pensions and 3 savings schemes accumulated due to a lack of plan.

eskbanker wrote: »

It sounds like you're heading in the right direction but I'm puzzled by your starting point - what various pension schemes were you involved in that paid interest, rather than investment gains? Were you advised to pay into multiple pension schemes that didn't involve any investment and if so, by whom?

eskbanker · 13 June 2017 at 1:09PM

amibee wrote: »

the portfolio isn't just for my retirement it's for saving in general, so I can use it for anything but I'll be primarily using it for my retirement as I don't intend to touch it till I'm in my 70s.

amibee wrote: »

I am using these terms vaguely: investment and interest...probably because I am not entirely savvy. I believe my pension plans were invested in stocks and shares and that's how I obtained gains/interest, but no one advised us...I have mainly done this because it seems sensible, I'm still young ish and I could stand to make more of a return on my investments by taking riskier moves.

amibee wrote: »

All in all I had 3 pensions and 3 savings schemes accumulated due to a lack of plan.

Sounds like it would be worth spending more time researching before making any decisions that you may later regret - especially the key distinguishing feature of pensions that they're not accessible at all until you're 55, i.e. you should separate money you might need before then from what's locked in. They are generally considered to be a good idea though, as there are tax advantages, so it'll be worth having both a pension and more accessible funds.

There's plenty of reading on here about pensions at http://www.moneysavingexpert.com/pensions/ and more at government-sponsored/run sites like https://www.moneyadviceservice.org.uk/en and https://www.pensionwise.gov.uk/en

amibee · 14 June 2017 at 12:49PM

Thanks very much for the extra links I'll have a look at those

Mature Student and Pensions

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