Is a PhD compatible with Financial Independence?

My thoughts on what a PhD in the UK involves, and whether it is worth doing on the path to FI.


I read a great post by Frugasaurus recently – “Why getting a PhD is a terrible idea if you are on the path to financial independence.” It raised a lot of valid points, and was a very interesting look at what a PhD in Norway involves.

However, one quirk of the PhD is that every country does them slightly differently. I thought it would be interesting to talk about what a PhD in the UK involves. Is it worthwhile, and is it compatible with the quest for financial independence?

This topic ended up being pretty large, so I’m going to split it into two. In this section, I ‘ll start with what the PhD itself involves – the money and benefits you receive, and the work required.

Then, in the second part, I’ll talk about what comes afterwards – will it help you get a job? What will that job involve? Is well paid, interesting, worthwhile, etc?


Show me the money!

Depending on your point of view, the money you get whilst doing a PhD in the UK is either pretty good, or a huge step down. When I started my PhD, the annual stipend was £13,590 and, according to some quick research, has now increased to £15,009 (apparently it increases roughly with inflation). This is tax-free, so at the time it was equivalent to earning ~£16,000 per year if you factor in paying tax and national insurance.


Coming straight from my undergraduate degree, this was huge! I had previously been living on a combination of the maintenance loan (about £3,500 per year, from memory), savings from my gap year (which I believe were reduced to zero by the time I finished my undergraduate degree) and the very generous Bank of Mum and Dad. Suddenly I was loaded!


Things became even better when I realised that you could also pick up some work here and there at the university (demonstrating in the labs, marking undergraduate coursework, outreach, tours of the university) that paid a little over £10 an hour. Considering I  was going to be in the university anyway, this seemed like a no-brainer. All told, I earned between £2-3,000 extra per year during my PhD. This was well below the personal allowance (around £8,000 at the time), so again, that was all tax free.


All this, and I was still classed as a student! This meant I was still eligible for student discount at a range of places, still had a huge overdraft at my bank (which I used extensively, but only because I had my money sitting in a savings account earning some interest) and didn’t have to pay council tax. Council tax is typically £100 per month, so over the course of a year this saved me another £1,000.


So, to sum up, I was earning ~£16,000 per year, tax free, and still had the benefits of being a student. I’m sure you can see why it was great at the time! However, if you’re considering starting a PhD after working in the real world for a few years, I suspect that will be quite a drop in salary.


All told, it isn’t a terrible wage… But it doesn’t compare to the numerous graduate schemes out there. From what I can see, the average graduate scheme right now seems to pay around £18-24,000, with some up to £40,000! So, in the first few years at least, the PhD seems to set you back financially compared to your peers.


As an aside, one downside to everything being tax-free is that I wasn’t making any national insurance contributions (NICs). This meant that, by the time I finished my PhD, my friends who had started working straight from university had accumulated four more years of contributions than me. Of course, no one knows what the state pension will look like 35 years from now, or how the rules determining if you can receive it will change. Still, the fact remains that I have about 3 years of NICs, whereas some people my age will have 10+. Probably nothing to be worried about if you expect to be working until the normal retirement age, but something to consider if you intend to retire early.


What does the PhD involve?

There’s a lot of misinformation surrounding the PhD. Whenever you tell someone outside the academia bubble that you have one, the responses are usually something along the lines of:

“Wow, you must be very clever to have a PhD!”

“I was done with learning by the time I finished undergrad, I couldn’t stand another four years at university. I don’t know how you did it!”


I’ll be the first to admit that the first response serves as a nice little ego boost whenever I hear it, but… It’s not true. At least, holders of a PhD are no more intelligent than anyone else I’ve met. The only requirement I think you need to successfully complete a PhD is sheer bloody-mindedness. It is a long, long slog, with many ups and downs. The main thing that kept me going was my own stubbornness, and refusal to give up. I’d never failed anything before, and I wasn’t about to start! Of course, support from friends and family also played a huge role. If you’re reading this and struggling with a PhD, my advice is, get out of the office/lab, make some friends outside of work, and take some time for yourself.


As for the second response, a PhD is very different from an undergraduate degree. In a normal degree, you attend lectures, do the prescribed coursework and take the exams. You then get a grade based on how well you did, and that’s that. Not so with a PhD; in the UK, at least, you don’t have to attend any lectures. You are of course welcome to, if you want a refresher on a specific subject relevant to your research, but it’s not expected. There’s no coursework and no exams (apart from the big one at the end, but I’ll come back to that).


Instead, a PhD is essentially a fixed-term job. It has a fair amount of flexibility and freedom, but it is ultimately a job. Your PhD supervisor has applied for some funding from a government body or from an industrial partner. This money is so that they can hire someone to  research a specific topic. This is where the PhD student comes in. Your supervisor wants to find out the answer to a question. It’s your job to answer that question.


This usually involves lots of research over a period of three years. Whether that’s using specialist equipment (most sciences), gathering statistics from questionnaires (social sciences), or working on a new theory using pen and paper (maths, economics), the process and end goal is the same. Come into the office/lab, work from 9-6, go home, repeat. In that sense, it’s no different from most other jobs! The biggest difference is that, in order to pass the PhD, you have to write a thesis on your research. This is a book of around 200 pages. You can try to write it up within the initial three years, but it has become the norm to take up to a year afterwards to write it up, whilst continuing to do some work for the university (training your successor, writing papers, etc). You then have to defend that work, in a process called a viva voce, or simply, the viva.


The viva differs from country to country. In the UK, the viva is a 2-3 hour oral exam. You, an internal examiner (someone from your uni), an external examiner (someone from a different university) and the chair (someone else from your university) all sit in a room. The chair simply sits there silently, usually doing some of their own work/marking. Their role is to make sure that the correct procedure is followed, and to offer you support if necessary. They obviously will not answer any questions for you, but they will allow you to take a toilet break, or step in to defend you if an argument is getting heated or abusive. I’ve never known of this to happen, but better safe than sorry! Meanwhile, the two examiners, who will have read your thesis prior to the viva, will simply work their way through the thesis and ask you any questions that occur to them. Their main aim is to check that this is truly your own work, and that you know what you’re talking about.


Once you’ve passed the viva and received your PhD, you feel like you’ve conquered the world! Some perspective is necessary, however; the end result is best described by Matt Might, who wrote the Illustrated Guide to a PhD. I strongly, strongly recommend taking 2-3 minutes to visit the site, the illustrations do an excellent job in showing what you end up with once you’ve finished a PhD.



That’s all for part one. In part two, I’ll talk about what comes next. Now that you are a Doctor of Philosophy, how do you get on in the real world!?

In the meantime, I’d be interested to hear if any readers took any postgraduate qualifications, and their experiences. Or, if you shunned postgraduate study, what were your first steps after university?

13 replies on “Is a PhD compatible with Financial Independence?”

Thanks for sharing your experience Doc. I know a few people who have done PhD’s and some who are still academics. This rings true – particularly about the need to work steadily and treat it like a job.

I would say that you’re doing yourself a disservice on the need to be intelligent! Although, from what I’ve seen it’s a different type of intelligence compared to previous studying Up to a doctorate it seems like you’re mainly taking what other people have already worked out and proving that you’ve understood that (it’s slightly different with an undergraduate or master’s dissertation but only slightly).

A doctorate forces you to say something new and that requires a different way of thinking. It’s why some people struggle to make that transition.

Looking forward to part 2!

Thanks as always for commenting, Caveman.

That is a good point on the differences between the different degrees. Up until you finish your undergraduate degree, you are typically taught everything you need to pass the exams, and you can essentially learn for one exam, then forget everything to cram for the next one, etc. Even with an undergraduate dissertation, there’s only so much “new” stuff you can do in the 6 month period that you are given to do the research and write it up. With a PhD though, it’s nothing but research, for 3 years. In theory, you should very quickly be pushing at boundaries of knowledge and making some sort of contribution to the subject, so you need to quickly get up to speed with the current state of the art, and understand it all (mostly!) in order to know where to begin.

Expect part 2 in the next week or so!

Thanks for this Dr. I actually thought that a PhD was similar to an undergraduate degree with more flexibility. I had no idea they were like that, I didn’t know you got paid to do them!

What happens if you get given a hard or almost impossible question? Or do you have your own pick of questions?

It’s possible to self-fund a PhD, but that would mean that you’d have to pay for everything yourself, so typically only international students with wealthy parents would even consider that!

I’ll answer the second part first – it depends. Some supervisors will have applied for funding to research a specific thing, so that’s what you have to do. There will still be some scope for flexibility though. The questions are usually vague enough that you might pursue 2-3 things at once, and then continue with the things that work. It’s also possible to come up with your own research questions, but most people don’t go that route – having only just graduated from university at 22-23 years old, you’re not expected to be an expert in any research field!

Awesome. I’ve been doing some research and it seems I could potentially do a PhD with just a first-class undergraduate degree. Something maybe to pursue when FI? I’d love to create one of those circle bulges! :P

Yeah, quite possibly! I think every university is different. I get the impression that most universities will request a masters degree first, but that’s usually because that student is going straight from undergrad to PhD, so getting a masters first allows the student to test out the idea of research without committing to a 3-4 year course; likewise, the university gets to make sure that the student is good enough to get through the PhD. Drop outs never look good for the uni! I would imagine that, if you have a few years work experience as well as a 1st class degree, then you’d be accepted.

I think that doing a PhD when your FI would be a very different experience! You’d be under no pressure because, if it doesn’t work out, who cares?? You don’t need the money anyway. You can also pursue a part time PhD, which would certainly fit in nicely with an FI lifestyle!

I did an MSc after my degree. I don’t think it directly helped my career, but the academic training has helped generally, and the disciplines of studying and project management helped with my accountancy exams and tackling complex projects at work.

The two PhDs I know now both have very good jobs, so I think it probably accelerates the career once you/they start.

We spend so much of your life at work having more years studying or researching is a good thing. I think back on that extra year at Uni as similar to ‘RE’ time, just at the start instead of the end.

Very good points; a degree isn’t always directly applicable, but can help develop a number of transferable skills.

And I like your idea of university as a period of “RE,” just at the beginning of your life, rather than the end! Certainly, although the PhD was difficult, I still had a lot of flexibility, moreso than a “real” job.

I genuinely did not know what a stipend was even though I had applied to do a PhD in the past. Perhaps my situation was different.

There was an opportunity for me to study for a PhD through work where it would be 50% funded by the Police. I would fund the remaining 50%. All the study would be done in my own time whilst I continue with my usual day job – not unusual for a part time PhD.

There was no mention of any stipend. My normal pay as a police officer remained the same.

In the end, I withdrew my application because of plans to start a family.

However, in hindsight, I probably wouldn’t have applied knowing what I know now. Financially, it just didn’t make sense. We do not get paid more in the Police due to our educational background. If the real search I did was something which caught the interest of key people, then perhaps I might get some speaking gigs or maybe a book out of it. However, I believe the financial reward would have been very limited in my case.

There is of course, doing the research for the passion. That is always noble and can’t be dismissed. For me, although I was very passionate about my research proposal, no amount of passion is enough to risk spending even less time with my family than I currently do.

Hi Cashflow Cop, thanks for commenting.

In my case, the stipend was because the PhD was full-time, and funded by a UK Research Council. I imagine that, in your case, if you’re still working and doing the PhD in evenings, a stipend wouldn’t be applicable? The idea of doing a research based PhD funded by the police is fascinating though. I didn’t realise that was a thing! What sort of topic would you have researched?

I think passion is key for many academic positions. The pay for a professor is pretty good, but getting there is a long slog. The hours required could see you get paid much more in a different profession.

It sounds like you made the right decision. As I said on Twitter, I couldn’t imagine trying to do a PhD whilst working full-time and with a family. The stress would be unimaginable. However, maybe things will change in the future. Once you’ve reached FI, the kids have flown the nest, and you’re winding down your work hours, a PhD might be a much more attractive option!

Yeah, Policing has and is going through a phase of “professionalising” the service to attract more recruits and to improve our knowledge. We even have something called The College of Policing which is a central body which reviews and conduct Policing Research.

They are going to be introducing a register soon, similar to Nurses and Doctors where we need a licence to Police.

Anyways, I was going to do further research into vulnerable children. I can’t say too much more in the open forum here.

I’m not sure about a PhD in the future, but never say never.

May I add some own remark on how I always tried to do it (and it worked quite well). It might be worth checking for multi faceted people. I combine academic study/research with entrepreneurship.

If you are good in being self employed, you can manage to earn a full time salary (and many tax advantages only entrepreneurs can get) by paid working roughly 1,5 days a week.

If you concentrate your academic study or research (yes, it can work with a PhD, I did it twice) on the field you work self employed, you get synergies others can only dream of:

If you get a good idea in research, you can sell it right away to your clients (for a good price, believe me). It works also the other way round: if you work closely with (paying) clients, you get ideas and information which might be useful as data for your PhD.

All you have to do is to be flexible and to always try to think BOTH ways. You might not get a Nobel Price for your research and you might not get your startup to go public. But: it much better than doing some poorly paid pure academic research for someone else.

If your goal is FI, there is no better way to do it in my view.

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