How pensioners can get a degree 'for free'

It's never to late to graduate

It's never too late to keep learning. That's why thousands of pensioners enroll on university degree courses every year.

Older student numbers have dropped significantly over the last 10 years, though.

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In 2007, there were 40,920 students aged 60 and over enrolled on university courses across the country.

By last year, however, there were just 19,030 undergraduate and postgraduate students registered in this age group.

The introduction of tuition fees costing up to almost £28,000 over a three-year course is likely to be one reason for this.

But many pensioners on lower incomes can avoid paying tuition fees altogether - thanks to a little-known loophole in the complex Student Loans system. And that means they can take a degree "for free".

How does it work?

Like students of all ages, pensioners can borrow the money to cover their tuition fees by taking out a Tuition Fee Loan.

Loans of this kind are designed to cover the course fees - which can be up to £9,250 a year - exactly, and are paid directly to the university concerned.

And unlike other loans offered by banks and lenders, they only have to be paid back once the student's annual earnings exceed £21,000, or £25,000 from April next year.

For pensioners whose retirement incomes do not exceed this amount - that's the huge majority in case you were wondering - this means that the loans never have to be repaid.

Is it fair to do this?

Playing the system this way is not for everyone, of course.

Whether or not you feel it is acceptable is likely to depend on both your moral compass and how you feel about tuition fees, which are often waived for Scottish and Northern Irish students.

One middle way is to ease your conscience by paying off what you can when the time comes.

Some pensioners who take degrees choose to voluntarily pay off at least part of their loans, despite not being forced to by the rules.

Either way, it's worth knowing about this loophole if the idea of taking a degree in later life appeals - especially if the financial strain of becoming a student was the main thing holding you back.

How we spend our pensions
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How we spend our pensions

Figures from Saga show that the over 50s now account for the majority of money spent by Brits on travel and tourism. They have the time to spare, the money, and they are healthy enough to take on the world.

A poll from Abta found that in the wake of pension freedoms, 35% of people were considering cashing in at least part of their pension to travel. A separate study by Senior Railcard found that pensioners take an average of three holidays a year, plus two weekends away, and 17 day trips.

Research from Senior Railcard found that retirees eat out an average of three times a month. However, one in ten do so more than twice a week, and one in three people said that one of the first things they did when they retired was to go out for lunch with their friends.

Of course, just because retirees want to enjoy themselves, it doesn't mean they are happy to throw money away. The vast majority are keen to eat at lunchtimes, when a fixed lunch menu tends to be cheaper, and canny retirees are skilled at tracking down pensioner special offers too.

Figures from the Office for National Statistics show that on average nearly a fifth of the money spent by people aged 65-74 is on leisure. This includes everything from the cinema and theatre to golfing and gardening. They spent more on this than on food, energy bills and transport.

A report by Canada Life found that retirees are spending £4,279 a year on having fun - that’s more than £1,000 more than they spend on boring essentials, and is a 74% increase over the past ten years. It went on to predict that this trend was set to continue, and that pension freedoms would encourage people to spoil themselves a bit more in retirement

Pensioner property wealth is now over £850 billion, and all these family homes don’t look after themselves. The Senior Railcard survey put home renovations in the top 20 activities people got stuck into on retirement, and figures from ABTA found that almost a third of people who were considering raiding their pension pots under the new pension freedoms planned to spend the cash on their home. This seems like an eminently sensible investment - looking after what is undoubtedly their most valuable asset.

Unsurprisingly, while some pensioners are very well off indeed, others are struggling with debt. Figures from Key Retirement found that the average retiree has £34,000 of debt.

Most of this is mortgage borrowing - in many cases driven up by the number of people who unwittingly signed up to an interest-only mortgage. However, credit cards, overdrafts, and loans are also common. It’s why so many pensioners have used pension freedoms to access enough cash to pay their debts.

The day to day basics are swallowing up their fair share of pensioner cash too. On average, people aged 65-74 spend a third of their weekly income on essentials like food and bills - which is hardly living the high life.
The bank of gran and grandad has become an increasingly vital source of cash for families. According to Key Retirement, of those who release equity from their property, 21% of them use the cash to treat their children and grandchildren. This includes an average of £33,350 to help children get onto the property ladder, £6,000 to buy them a new car, £11,000 on family weddings, and £24,780 giving grandchildren a helping hand.

While retirees are quite rightly spending what they need to enjoy retirement, they are hardly all throwing caution to the wind, buying flash cars and spending the kids' inheritance.

Most expect to have something left over to pass onto their family after their death. Some 69% expect to leave property in their wills, and 75% expect to leave cash - according to - because while baby boomers know how to have fun - they also know how to save for the future.


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