Preparing Your Finances for Life Beyond University
Approaching graduation can be both a daunting and an exciting time. The exams and essays are drawing to a close, but what lies ahead might appear to be full of questions. Read on!
Please note that this information is primarily aimed at ‘home students’ as entitlement to State Benefits is based on very complex residency rules.
Welfare Benefits & Tax Credits
Entitlement to welfare benefits and tax credits is often restricted when you are a student, and will depend on your circumstances. When you are no longer a student you might find changes to your existing support, or that additional support becomes available. From October 2013 (April 2013 in the Northwest) the Government will introduce Universal Credit. Find out more at: www.dwp.gov.uk/universal-credit/
- Working Tax Credit (WTC) is paid to low-paid workers to ‘top up’ your wages. The amount of Working Tax Credit you can receive will depend on your household income and who lives with you.
- Child Tax Credit (CTC) is paid to families with children. It is paid whether or not you are in employment. Your entitlement will depend on various factors including your household income, who lives with you and how old they are.
For more information you can call the Tax Credits Helpline on 0845 300 3900.
- Child Benefit is available to families with children and is non-means tested (but see note below). That means that if you have a dependent child and meet residency conditions you will be entitled to this benefit. It is likely that you received this benefit while studying, and graduating will make no difference to your eligibility.
Incomes over £50,000: If you, or your partner, have an individual income of more than £50,000 and one of you is entitled to get Child Benefit you might be affected by a new tax charge implemented on January 7th 2013. More information is available at: http://www.hmrc.gov.uk/childbenefitcharge.
- If you are unable to find employment when you complete your course you may be entitled to claim JobSeekers Allowance (JSA) to provide you with a limited income until you become employed. We suggest that you seek advice on entitlement and apply online at: www.direct.gov.uk/en/MoneyTaxAndBenefits
- Housing benefit is paid to people with a low income who are liable to pay rent. It is an income based benefit which means that the income and savings of your household i.e. yours and your partner’s (if relevant) are taken into consideration.
Will I be charged interest on my overdraft once I graduate?
It is likely you will be charged interest as soon as you finish your studies unless you shop around. It is always best to speak to your bank and other banks as there are offers such as ‘graduate accounts’ which you can apply for.
What graduate accounts are best?
It is always worth shopping around. Check out websites such as http://www.moneysavingexpert.com/students/graduate-bank-accounts to compare what accounts are available.
Always read the small print! On the surface a graduate account may seem like a pretty good deal but when you look closer at the Terms and Conditions it may no longer seem as good a deal as you first thought.
If you are looking to undertake postgraduate studies the following information may be useful:
Applying for funding
Although there may be little funding available to postgraduate students and there is no entitlement to funding from the Student Loans Company, many postgraduate students do manage to secure some funding through tenacious research. It is advisable to contact the relevant department of the university you intend to study with for more information regarding scholarships, bursaries or grants that may be available.
When financing a postgraduate course students are expected to consider the costs of tuition fees, accommodation and living expenses and to make sufficient provision prior to the commencement of their course to cover these costs.
Professional and Career Development Loans
Postgraduate students can also consider a Professional and Career Development Loan (PCDL), which is a deferred bank loan. It provides financial help for vocational education or training. You can borrow from £300 up to a maximum of £10,000. You are eligible to apply for this loan up to 3 months before the start of your course. To order an application pack or receive further advice/information, call the PCDL helpline on 0800 585 505 or visit www.direct.gov.uk/pcdl.
For most students the aim of undertaking a degree, whether it be at undergraduate or postgraduate level, is to improve their employment prospects. However securing that first position can be daunting, so here are some hints and tips to get you started:
Start before you graduate
Visit the university careers service for support and advice about jobs, careers and postgraduate study.
Job Centre Plus have access to information on jobs locally and nationally. Find out more at: www.gov.uk/jobs-jobsearch. Many of the broadsheets have good jobs sections, as well as local newspapers. Check their websites.
If you are graduating with a vocational qualification, relevant Professional organisations and bodies may have current vacancy lists as will the relevant professional magazines and publications such as the Nursing Times or Social Work Today.
Student Loan Repayments
If you have taken out a Student Loan for Maintenance and/or a Student Loan for Fees during your course of study, these loans will be combined to a single loan account. Repayments will depend on the amount you earn, not the amount you borrowed.
For information about repayments, interest rates, and making voluntary additional payments visit www.studentloanrepayment.co.uk or the other pages within this section of the NASMA website.
And Don’t Forget…
- Council Tax - No longer receive Student Discount/Exemption. Contact the council straight away with your course end date. Living off benefits or low income? – You may be able to receive Council Tax Benefit.
- Car/ House insurance premiums - May go down depending on policy.
- Debts - Change in status may give you the ability to pay more/less towards debts. Important to remember that Priority Debts come first (Rent, Council Tax, Utilities etc). Non Priority Debts can be dealt with by seeking debt management assistance from free agencies such as Citizens Advice Bureau and National Debtline. Never pay for Debt Advice!
You might also be interested in this information from the Guardian.
With thanks to the Money Advice & Support Office at Swansea University for providing much of the content for this article.
Last Updated: 20 May 2013