Student Pensions

EternalStudent_2

I'm a post grad student, back at uni after 3 years in the real world. I've just started a 4 year doctorate and I am getting a comfortable sponsorship amount.

My boyfriend, who I live with, on the other hand was made redundant in May and is at the end of his contribution based job seekers allowance. He needs to now go onto means based job seekers. Which involves a 50 page form and unfortunately asks for my financial details.

I have about 7 grand in an ISA saved over the years and am in theory earning, so it means that he won't get any more state support and we have to survive on a student income in London!

I've considered putting the money into a private pension but I realise this get assessed as well and have read this can be worse than an ISA. Also I've been considering buying a number of plasma screens (though very little wall space as our flat is tiny) as the system seems to be ecouraging me to spend it rather than save for the future. I'm not ready to buy property as this year I'm Uni based but next year Company based and will have to move.

Anyway I'm not sure what to do with my money, but am scared that 4 years more without starting a pension is a bad way to go.

Any advice would be appricated!!

dunstonh

I've considered putting the money into a private pension but I realise this get assessed as well and have read this can be worse than an ISA.

A pension cannot be touched until age 55 at the earliest (in your case). My understanding is that pensions are only considered once you get to an age where they can be "touched". I would certainly seek clarification on that point before you decide to do anything.

Milarky

Anyway I'm not sure what to do with my money, but am scared that 4 years more without starting a pension is a bad way to go.

Almost certainly the best thing to do as a student/near student is adress any commercial-rate debt [rather than the student loans - which you have no incentive to repay ahead of schedule]. It's better to get into the savings habit before becoming too specific about how you save since - as you reaslise - that any progress you make is at the expense of any means teated entitlements in the far future.

You also seem to realise that money in a pension is disregarded by the system of means-tested benefits [including JSA]. The same applies to life specific assurance savings plans also, I believe - which pensions in part are.

One of the 'best' options paradoxically is to get a low paid job which puts you just above the weekly earnings limit [of £82pw]. This will allow you to build up state pension entitlements at approximately twice the rate of the basic state pension [amount: £82pw] because earning just over £82 x 52 [£4264] you get State Second Pension [S2P] creditied as though you actually earned about £12,000pa in addition to building up basic state pension. [Why go out and earn £12,000 from employment when you can build up the same rights by working for less than half that time?] As a student you might appreaciate the abilitty to work part time only - I don't know..

Good luck

EdInvestor

Why is BF having such trouble getting another job?


Could he not even find a part time job as above?

Pal

Realistically, the benefits system is designed to pay out to people who cannot afford to live without help. If you have £7k in savings, then you can afford to live on it for a few months. Once it has gone your BF can start claiming means tested benefits.

If you want to avoid "losing" your savings on living expenses, the either your BF needs to get a job (tescos? Macdonalds? etc) or you need to spend the money in advance.

I don't want to be mean but surely savings are for a rainy day? If your BF is unemployed and your income is not enough to support you both, then surely the rainy day has now arrived.

Bargain_Claire

I'm not sure if it would help to mention that your income is a grant towards living expenses and not a salary?

I know exactly what you mean about the system being stacked against those that live frugally as students. I had been saving towards a house during my PhD and when I finished money in the bank = no jobseekers. Makes me kind of wish I'd followed the '!!!!!! it up a wall' vernacular!

lipidicman

Your grant shouldn't be counted as income, it isn't taxed as income is it? Mine never counted towards my personal allowance.

If the OP isn't financially tied to her boyfriend is there a way to ensure the assessment is based only on his income and savings? Does the fact that she calls him a boyfriend (with no extra rights or benefits) make him any different to a housemate?