Pension options when doing a PhD

atw_uss

Hello,

I am about to start a PhD having been a teacher in the past. I have paid into the TPA for 13 years and also into a Pru AVC for about 8 years.

I will be receiving a tax-free stipend of about £15,000 for each of the next three years, and am looking for some advice on how to maintain some sort of pension contribution. I can afford to put up to £500 a month into a pension, but would appreciate any advice.

I'm also concerned about missing NI contributions. Can I pay in while on a stipend?

Many thanks!

jb131

If your income is tax free then you may be better off saving your "pension" in an ISA. Then when you are earning a taxable income move the money from the ISA to a pension to take advantage of the tax benefits.

EdInvestor

On the NI front, check how many years you have already clocked up.You only now need 30 for the full basic state pension so you may find that missing out a few years will have a negligible effect when you look at your working life as a whole..

atw_uss

Thanks!

I've been looking around at personal pensions as well, as it appears that even though my income is tax free, the tax man will still top up my contributions by another 22%. Am I right in that?

Also, is there any way of finding out about good personal pensions without going to a financial advisor ... I expect this could be rather expensive, although I appreciate it may be worth the cost. The Virgin pension looks interesting.

dunstonh

I've been looking around at personal pensions as well, as it appears that even though my income is tax free, the tax man will still top up my contributions by another 22%. Am I right in that?

Yes. Up to £3600 a year.

Also, is there any way of finding out about good personal pensions without going to a financial advisor ...

It means doing your own research on the providers and the investment funds.

I expect this could be rather expensive

not as much as you think.

The Virgin pension looks interesting.

It is probably one of the worst stakeholder pensions out there and can more expensive than using an IFA.

atw_uss

Thanks for the reply.

Roughly how much should I expect to pay for some financial advice?

In the meantime, if possible, could you point me in the direction of a well respected personal pension and I will do a little homework.

Judith

Phaedos

I am in (almost) exactly the same position as the OP, about to start a PhD, however I am mid 20's, have no savings except around £1k, and have never took part in an occupational pension plan.

I am quite worried despite being relativley young at how my pension will turn out on this path. Since I guess whilst I'm studying for the PhD and getting a tax free stipend, I won't be making any NI contributions, so I am not clocking up years towards quaifying for a state pension. Also if I go down the academic route, I may end up working in various countries, so I wonder if this would count towards state pension?

I would also like to aim to get together a house deposit over the next few years, so was thinking of some kind of fixed term savings account. I just don't know how I will be able to put aside for this and a pension on just over £1100 net a month.

Sgt_Oddball

Hi,

I have done a PhD and am now about 3 years into a post-doc. The Universities Pensions Scheme (USS) is really good (finaly salary) but I don't think as a PhD student you are eligible to join. However, it's worth double checking with the pensions office at the University. There may also be some other provision I am not aware of.

Otherwise, as others have stated, I think you can contribute up to £3600 yourself to a personal pension and get the tax relief on top (like non-workers). I think the status of PhD students is a bit of a grey area - technically you aren't employed even though you receive a stipend.

Hope this helps.

atw_uss

Thank you. I agree that my status is a bit of a grey area ... I will be a research assistant and PhD student, although the stipend would appear to dictate that I am more student than employee. I will take some advice when I start on Monday though!

In the meantime, in the absence of a financial adviser, I've been looking at (apparently high performing) stakeholder pensions from Aviva, Barclays and L&G. Any opinions would be gratefully received. I'm starting to think that for the sake of a 3 year hiatus, any of these would be OK, provided I end up in full time employment at the end of the PhD. Ideally a uni post would be great, as my TPA is transferable, but we'll have to wait and see there!

Thanks again.