Congratulations - you have made it! MRCVS
Congratulations - you have made it! MRCVS…..and to your career. We are here to help you get off on a strong financial start. Over 400 students registered for our recent Face Up To Finances Session on "Your 1st 100 days in your new job!" and we thought we would summarise some of the take homes and answers to YOUR all important questions.
This summary blog will continue to evolve so keep your questions coming!
Watch back our Face Up To Finances Session
Your 1st 100 days in your first job
What are the important things to check in a vet contract?
There are many different matters to consider. We have looked at the financial aspects of a contract and the important things include:
- The basic pay you will earn
- Whether there are any bonuses and how likely they are to be achieved
- Employer and employee pension contributions. These are likely to be 3% and 5% of your earnings, subject to limits
- The CPD you are offered – monetary amount and time allowance. Is there a clawback if you leave?
- Whether professional fees are paid by the employer
- Other benefits – car/ van, private medical insurance, accommodation
- Sick pay terms
It is important to understand the taxation impact of all of the above as they can vary.
How do we know if we are being paid well in the future?
There are surveys undertaken by organisations such as SPVS (you can get free student membership too!). However, it is sometimes hard to know the answer to this question. You should have at least an annual appraisal where you should understand how you are performing. We would encourage you to ask for regular updates and possibly your own financial data. This will help you also understand the progress you are making. This should at least enable you to help assess your value to the practice when it comes to negotiating your package.
How do I know how much student loan I need to pay off?
You have to repay 9% of your earnings over and above £2,214 per month.
Income protection – do I need it? How much does it cost? What does it actually cover?
Our pages on Income Protection explain more about income protection. The amount of cover will depend on many factors including:
- Your salary
- Your current sick pay arrangements
- Your budget
- The level of cover you want
- Your age and health
You can also watch back our Face Up To Finances Session and summary notes on "When the worst really does happen - protecting your income"
If you have secured a job then join our Financial Circle in July- Protecting your income. Where up to 30 veterinary professionals will be supporting by an IFA to get income protection that is right for them! Register here for our session 19:00 28.7.20
How much money to put into your pension?
This is a personal decision and will probably depend on your level of disposable income. If you use the Financial Health Check Support Sheet it will help you determine how much money you might have to put into a pension. Investing early makes a big difference to the potential final size of your pension. It would be good to speak to a Financial Adviser. There is more information on the web site here
How do you pay more into a pension?
Most pension payments will be paid by direct debit on a monthly basis. However, it is possible to make additional contributions by either, increasing the direct debit, making a one off payment or making irregular payments as and when you choose to. It is always best to speak to your Financial Adviser about these decisions.
How do you find out how much you have in your pension?
Many providers of pension products enable you to view your pension online. However, if you do not have this facility on your pension then you can either contact the company administering the fund or your Financial Adviser. We would suggest having a minimum of an annual review of your pension with your Financial Adviser.
How do you start a pension?
You can set up your own pension through a provider. However, we would suggest speaking to a Financial Adviser so that you ensure you fully understand the commitments and benefits of a pension.
Effective budgeting strategy tips?
Please take a look at the Financial Health Check Support Sheet and also take a look at these super useful articles on "Survive now, prosper tomorrow " and "The selfcare habit we don't talk enough about - financial discipline"
How much money should I save per month for a mortgage?
It will depend on how much you intend to spend on a house and house prices in the area. The bigger the deposit that you can manage the greater chance you will have of securing the right mortgage for you. Please do use the Financial Health Check Support Sheet
How much tax do you pay if you don’t start working immediately?
You pay income tax on all of your earnings each tax year (6 April to 5 April) at a rate of 20% over £12,500 per annum. This increases to 40% above earnings of £50,000. In addition you pay National Insurance at a rate of 12% over £9,500 per annum. These allowances are available each tax year. If you delay working then you will get more income after tax in your first tax year as your income will be lower.
How much tax will I pay on a sign on bonus?
Please see the answer above. It is likely to be 20% income tax and 12% National Insurance.
Should I take a Company Car?
This is a difficult question to answer. There are both tax and emotional decisions to be made here. How much do you want a new / decent car? How many miles will you be driving for work / pleasure? What kind of car is it?
Tax will be payable at your rate of tax, probably 20% to start with. It is assessed based on the CO2 emissions of the car. There might also be fuel provided by the employer which will be subject to income tax. Company cars are complex and the amount of tax depends on many circumstances. More information can be found here
How much does CPD cost? What is a good CPD budget?
CPD varies in cost depending on the course that is being attended. It is possible that your employer will have their own CPD programme for the first couple of years and this will probably be included as part of your package. If not then you might be allocated a CPD budget (time off and money) in order to select relevant CPD for your progress. Most new graduates would expect to get between £1000-2500 a year.
Remember that anything that advances your competence, confidence, communication and self-awareness counts as CPD. Download your 1CPD app from the RCVS and get into the habit of recording and reflecting.
Some great places to pick out free CPD can be found here and here
If what you want to do is outside your allotted CPD budget then make a business case for it and present it to your employers. If you can show the return on investment for the practice or team in revenue, brand reputation, retention or recruitment (just to name a few good currencies) then they are likely to be all ears. If you don't ask, you don't get.
You may also want to fund some CPD yourself. Remember investment in self is one the best things you can do!