by Madaline Dunn

As millions of people prepare to jet off for their summer holidays – for some, for the first time in three years- many are troubled by travel anxiety. Strike action at UK airports has been ongoing for some time now, over pay, working conditions and long hours. For these reasons, there has also been an exodus from the sector, leading to staff shortages. On top of these issues, the recent heatwave has added to disruptions, with all-time-high temperatures causing surface defects on runways.

Projections from experts such as Professor Cloke, a Government scientific advisor are also warning that there could be a further heatwave in August, and so it’s wise to prepare for this eventuality when booking upcoming flights. Likewise, while British Airways staff recently announced they had called off their strike after reaching a pay deal, Ryanair staff are set to continue with strike action, as are staff from other airlines.

It can be difficult to know where you stand with regard to compensation and insurance, which can result in a lot of unnecessary stress.

At The Salary Calculator, we’ll walk you through:

  • Whether the situation has changed since the UK left the EU
  • What happens if your flight is cancelled due to strike action
  • Whether or not you’re entitled to compensation if your flight is delayed or cancelled
  • Whether you’ll be covered by travel insurance
  • What will happen if your flight is cancelled due to the heatwave

Is the situation any different now that the UK has left the European Union?

Prior to Brexit, EU 261/2004 protected the rights of air passengers, and it meant that people could claim compensation for a delayed or a cancelled flight. While the UK is no longer part of the EU, that protection was incorporated into UK law at the end of the Brexit transition period.

This is good news because it means that you’re still protected with regard to flight compensation claims, but now you’ll be paid in UK Pounds rather than Euros.

What happens if your flight is cancelled due to strike action?

Flight cancellations are usually a nightmare to navigate and the last thing you want to encounter when envisioning the expanse of blue sea that awaits you at your holiday destination. However, the good news is that if your flight is cancelled as a result of strike action, legally, your airline is responsible for rerouting you, which could even be with another airline if the airline you booked with is unable to accommodate you. The airline will refund you for the flight cancellation if this option is also not possible.

It’s also important to note that in situations where your cancelled flight is part of a holiday package, you’ll be covered by ATOL. This is a government-backed financial protection scheme that applies to the majority of package holidays. As part of this coverage, if your flight cancellation means you have to locate alternative accommodation, you’ll be covered for this too.

Will you receive compensation?

Under UK law, if you’re due to fly and your flight is cancelled and the airline company you booked with fails to inform you of the cancellation less than 14 days from the date you’re due to fly, you will be entitled to compensation, if the cancellation is the airline’s fault.

That said, if the strike is announced more than two weeks from the date of your holiday and you’re offered an acceptable alternative that doesn’t detract too much from your original flying plans, your entitlement to compensation no longer remains. Adding to this, Julia Lo Bue-Said, chief executive of Advantage Travel Partnership, said: “Equally, if you decide not to travel because you are concerned by strikes, you won’t be covered in this instance either.”

Are you covered by insurance?

Unfortunately, a significant number of insurance policies don’t offer protection in cases of strike action. According to a recent investigation by Which?, four in 10 policies don’t. So, considering the very turbulent nature of travel at the moment, when deciding which insurance provider to choose, it’s important to ensure that they provide as robust coverage as possible.

Likewise, be aware that if, following the news of upcoming strikes, you book travel insurance, you might find that it’s invalidated.

Speaking about this to This is Money, Ceri McMillan, travel expert at GoCompare, ​​said: “It’s so important that you read your policy, so you know what you’re covered for and likewise, buy your policy as soon as you book your holiday as you are more likely to be covered the earlier you bought it.”

What happens if your flight is cancelled due to the heatwave?

Due to the Civil Aviation Authority declaring that the heatwave lies within the category of ‘extraordinary circumstances,’ if a flight is cancelled or delayed due to soaring temperatures, passengers will not be eligible for compensation, which typically works out as up to £500 per person.

Extraordinary circumstances cover situations that airlines deem to be out of their control, and unforseen. Other examples of situations in this category, include: political and civil unrest, security threats, medical emergencies, strikes of airport staff or suppliers, and bird strikes.

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by Madaline Dunn

In the midst of numerous cost of living hikes, it’ll likely be comforting to learn that as of 6th July, millions of people will be slightly better off as a result of the National Insurance (NI) threshold increase.

At The Salary Calculator, we’ll walk you through:

  • How much the threshold has been increased by
  • Why the threshold increase is happening
  • How this will affect people
  • How to check what difference it will make to your take home

How much has the threshold increased by?

From 6th July 2022, the threshold for National Insurance contributions increased from £9,880 to £12,570. This means that people will now have to earn additional £2,690 before paying towards National Insurance.

Why has the threshold been increased

Back in April, the government announced that despite the cost of living crisis continuing to worsen, NI would be increasing by an additional 1.25% in an effort to aid NHS recovery, and fund the Government’s share of social care. However, the government has now raised the NI threshold as part of what it’s called the Chancellor’s “wider vision for a lower tax economy.”

How will this affect people?

This threshold increase means that some people will see a boost in their July pay packets. Experts have outlined that those earning around £31,500, or less will notice the most significant difference. Moreover, the UK government has said that almost 30 million working people will benefit overall, with the average worker saving over £330 in the year from July.

According to a previous statement by the government, 70% of NI paying workers will pay less, and 2.2 million people will no longer be required to pay NICs as a result. According to figures by HW Fisher, those earning £14,000, will save around £342.37 a year, meanwhile those on £20,000 will see savings of £267.36.

A more in depth comparison of how the situation has fluctuated in recent months shows that someone earning £20,000 would have been faced with a monthly NI payment of around £104 before April. This then rose to £112 following the hike and now, as a result of the July changes, will drop to approximately £82.

That said, while any money saved is arguably a win, it’s important to put the savings into a broader context, Alice Haine, personal finance analyst at investment platform Bestinvest, for example, has noted that the £330 workers will save, “won’t stretch far when you realise that only equates to £27.50 a month”.

While Haine outlined that for some, £27.50 could be the difference between “having dinner every night and sometimes going without,” for many it will “barely make a dent in their budgets as they struggle to pay the household bills amid rampant inflation as soaring food, fuel and energy prices become the norm.”

Stevie Heafford, tax partner at accountancy firm HW Fisher, echoed similar sentiments and when asked if it will help to solve the current crisis, he said: “The very short answer is, no. Those with lower income will save more in pure monetary terms, but they will be more exposed to the general increases in cost of living as they are less likely to have any sort of ‘buffer’.”

How can you check what difference it will make?

You can review how much of a difference this will make to your take home pay by heading over to The Salary Calculator, where you will be able to figure out exactly how much you’ll save.

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by Madaline Dunn

The latest figures shows that in the six months to May, UK mortgage rates rose at their fastest pace in ten years. According to research by Hamptons estate agents, this interest rate rise means that it is now cheaper on a monthly basis to rent than to buy. Moreover, over two million households in the UK will see mortgage payments rise.

If you have a mortgage, the headlines are likely causing confusion and concern, and it can be challenging to know where you stand.

At The Salary Calculator, we’ll walk you through:

  • What’s happening to interest rates on mortgages and how people will be affected, and
  • What options do people have to navigate soaring costs

The interest rate rise and its effect on mortgages

In an effort to address rising inflation, the Bank rate rose from 1% to 1.25% and there have been further warnings that this could increase to as much as 3% by the end of the year. The rate hasn’t been above 1% since 2009, following the financial crash.

According to David Hollingworth, L&C associate director, this means “an entire generation of homeowners used to low rates could be facing a shock. Adding: “Although rates remain low in historical terms the available deals have already risen rapidly. Our analysis shows that the average of the ten largest lenders’ lowest two-year fixed rates for remortgages have already trebled since the lows of last October. That is an increase of more than £130 per month for a £150,000 25-year repayment mortgage.”

But, what does this mean for those with mortgages? Well, those on standard variable rates (SVRs) or tracker rates will be hit the hardest, with the former seeing an average annual increase of £191, and the latter £303, according to UK finance. This will also impact around 2.25 million homes (a quarter of mortgage borrowers).

Those who are on fixed rates (85% of all mortgages), however, will not have to deal with the increase until they remortgage. That said, 1.3 million borrowers are set to come to the end of their fixed-rate deals this year. According to Moneyfacts.co.uk, those remortgaging onto a fixed rate deal will be faced with average rates of around 3.25% for a two-year fix and 3.37% for those locking in for five years.

It’s not just those with mortgages who will feel the sting either. Tom Selby, head of retirement policy at AJ Bell, outlines that renters will also be on the receiving end of this hike and “also likely see costs increase.” Speaking to Sky News, he said: “Landlords will inevitably pass on their own higher costs, although when this happens will depend on the terms of your rental agreement.”

Discussing the impact that these rising rates will have on people, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said that rising prices and rates risk will lead to people being trapped in pricey mortgages that they’re unable to escape, turning them into “mortgage prisoners.” Unfortunately, though, this is already happening and according to Rachel Neale, lead campaigner for the UK Mortgage Prisoners group, over 200,000 people in Britain have already been put in this position.

What are the options?

Looking ahead, it’s likely that rates will climb further. Grainne Gilmore, head of research at Zoopla, said to cope with this, “locking into a rate shortly could save hundreds over the longer-term.”

Meanwhile, for those whose mortgage is set to expire in the next six months, it might be a good idea to remortgage, as it could work out cheaper than later on (for example, November or December’s average rates.)

It has also been recommended by some that overpaying now could save you money in the long-term; Alice Haine, personal finance analyst at Bestinvest, said: “Paying down debt or adding an extra monthly sum to their emergency fund would also strengthen their financial reserves against the myriad of challenges ahead.”

Some lenders are also offering help. For example, Nationwide has expanded its lending ratio, and introduced a simple switcher process. Santander, on the other hand, has introduced a 5% deposit for first-time buyers. At the end of June, it was also announced that from 1 August, borrowers’ finances won’t be subjected to the mortgage market affordability test, where banks and building societies calculate how much to lend.

Mortgage Prisoners UK, a not-for-profit organisation that campaigns for fairer mortgage rates for all, argues not enough is being done, and has called on the government to take action. However, in a statement, a Treasury spokesperson said: “We know that people are struggling with rising prices and worried about the months ahead. That’s why we’ve stepped in to ease the burden, helping eight million of the most vulnerable British families through at least £1,200 of direct payments this year – and giving every household £400 to help pay their energy bills.”

Adding: “As part of our £37bn support package we’re also saving the typical employee over £330 a year through the imminent National Insurance tax cut, are allowing Universal Credit claimants to keep £1,000 more of what they earn and have made the biggest cut to all fuel duty rates ever.”

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by Madaline Dunn

Although personal finance is now an educational requirement in the UK, it’s well known the curriculum around this topic is not up to scratch. Many leave school without a real grasp on the ins and outs of personal finance, whether that’s interest rates, mortgages, or managing money, and as a result, research shows this leaves youngsters vulnerable to making harmful decisions around their finances.

Financial literacy empowers people to make informed choices about how, when and where they spend their money, and ensure they’re not left open to unsustainable borrowing, and unwise investments that could lead them down a road of debt.

At The Salary Calculator, we’ll explore why education around personal finances in the UK needs to improve, and the consequences of financial illiteracy.

A lack of financial literacy and its consequences

According to research, we begin to develop “vital money habits and skills” between ages three and seven. Despite this, only around 38% of children and young people receive some form of financial education while in school, and in 2016, half of Brits failed a financial literacy test run by the OECD, placing Britain significantly below France, Norway and Austria.

The consequences of this lack of financial literacy, means that young people are largely unprepared to deal with the different financial situations they are confronted with as they move into adulthood.

Research from Santander UK has even found that two-thirds of young people attribute their debt problems to a lack of financial education. Meanwhile, an inquiry commissioned by the Centre for Social Justice (CSJ) in partnership with Lowell, found that 24 million adults are not confident handling their money on a day to day basis, and one in eight young adults who took on a “buy now, pay later” credit agreement were eventually contacted by a debt collector.

Speaking about what the Santander UK study shows, Mike Regnier, CEO of Santander UK, said that fostering key money management skills at “an early age” will ensure that future generations leave school “equipped with the foundations for financial independence, and the skills to make better financial decisions.”

Meanwhile, John Pears, UK Chief Executive at Lowell, said that now, more than ever, with the cost of living crisis reaching extreme levels, financial literacy would be a “strong barrier.” Pears admitted that as a country “we just aren’t good enough at it,” and outlined that the company’s own customers have outlined how “ill-prepared” they are when facing debt. He added: “The lack of financial literacy and budgeting skills creates spirals of debt that are hard to break and have a long-lasting impact, individually and on our economy.”

Education around personal finance should start at school

The CSJ and Lowell conducted a poll of 4,000 adults and found that 44% of all adults, and two-thirds of those aged 18 to 34, believe that if they had received financial education, for example around basic money skills, they would be more financially prepared for life and its challenges. Yet, in the 2021-22 Young Person’s Money Index report, just 8% of young people said they received most of their financial education at school.

Yet, according to Fintec, when children receive education around finances at school, they’re more likely to handle their finances better, save up frequently, have a bank account and generally feel more confident navigating finances.

Speaking about the advantages of educating children about finances from a young age, Martin Lewis, the founder of MoneySavingExpert.com, said that children are “professionals at learning.” He added: “Teaching children is easier than teaching adults. That’s why, in our education campaigns, we focus on children –  because the job of educating society is so much bigger. If you start with children and keep doing it over 30, 40 years, you’re going to work through [society] better.”

Programs and initiatives to enhance education

Back in 2014, financial education was brought into the secondary school curriculum, as a component of the “citizenship” element of the national curriculum at key stage 3 and 4. This was introduced as a way of providing students with guidance on managing money, and tools to plan for their future financial needs.

However, despite being compulsory, uptake of financial education in schools is actually quite low. According to Russell Winnard, a former teacher and head of programmes and services at Young Money, there is room for improvement in this area. In 2017, he outlined: “It is compulsory in every secondary school, though that does not apply to academies and free schools. Around 35% – 45% of schools were actually delivering financial education in 2014. Two years on and we estimate it’s still only 40% doing so.”

This is something that has been echoed more recently by Martin Lewis who expressed similar sentiments. Speaking to Future Learn, Lewis said: “There is financial literacy on the national curriculum, but it’s guidance rather than compulsory for many schools. It’s only on the curriculum for secondary schools in England. We have a charity called Young Money where we have a free financial education textbook in every school now, and that’s been incredibly successful, but we still have a problem that some schools don’t teach it, aren’t trained to teach it and won’t.”

To tackle the financial education gap, a number of recommendations have been made by CSJ. Some of these recommendations include:

  • Introducing a new legal requirement for students to receive “at least three ‘experiential’ financial learning lessons” over the course of their school career;
  • A new ‘whole-family’ approach to financial education. According to the report, this would involve bringing in parents and carers into the equation, and introducing what the CSJ called community infrastructure like Family Hubs;
  • Bringing in funding for care leavers and disadvantaged young adults to attend ‘just-in-time’ financial education programmes to reduce cases of rent-arrear driven homelessness;
  • Introducing adult financial education as part of the Government’s £560 million adult numeracy scheme, ‘Multiply’;
  • Completing of the welfare reforms initiated in 2012 by rolling out ‘Universal Support’ to provide vulnerable people with digital and financial skills;
  • Promoting the ‘Help to Save’ scheme to increase uptake among those who are eligible.

Commenting on the changes that need to be implemented, Robert Halfon MP, Education Select Committee Chair, said: “We must be bolder – critically, by adding financial education to the curriculum in primary school in PHSE lessons where money management remains absent in England. Adults of all ages also need opportunities to develop critical financial skills throughout their life, whether that be in the workplace, further education or via the welfare system.

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by Madaline Dunn

These days, almost everyone is feeling the pinch. According to recent research from the Food Standards Agency (FSA), more and more people view affording food as a concern and over three-quarters of UK consumers (76%) have voiced their unease.

Likewise, BritainThinks also found that the cost of living is now the dominant concern for UK households, with rising prices being a major concern for 90% of people. Shawbrook Bank even found that around 18% are already losing sleep over their concerns around money, and a quarter of those surveyed cited managing their finances as the primary cause of their stress.

At The Salary Calculator we understand how difficult it can be to cope with the cost of living crisis, and have compiled a list of ways to save money when faced with financial challenges:

  • Access to food banks 
  • Free sanitary products and contraceptives
  • Baby food & formula
  • Toys & Books

Access to food banks

Recent research has shown that over 22% of people surveyed by the FSA, as a result of financial struggles, have been forced to either miss a meal or reduce the size of their meals. It will come as little surprise then that people’s use of food banks has risen dramatically, with the number of those turning to food banks increasing from around one in 10 in March 2021, to almost one in six this March. 

Speaking about this, Prof Susan Jebb, chair of the agency, said: “In the face of the immediate pressures on people struggling to buy food, food banks are playing a vital role in our communities.” That said, you may be in the dark about how to go about accessing a food bank, but don’t worry, we’ll explain. To begin with, you’ll need a referral – you can start the ball rolling through accessing your local Citizens Advice. Once there, you’ll be asked about your personal circumstances and they will determine whether you’re eligible. That said, if you’re unable to get a referral this way, you can ask an organisation/body that you’re receiving support from, this could be a social worker, school staff, or GP.

Once you’ve received a referral, you’ll be given food vouchers for a food parcel containing three days’ worth of non-perishable food. Alongside the food parcel, you’ll also be offered advice on finance, debt, and government support. 

Sanitary products & contraceptives

Period poverty in the UK is alarmingly widespread. A recent survey in the UK uncovered that one in four girls and women aged 14-21 (28%) are struggling to afford sanitary products and almost one in five (19%) have been unable to afford these at all since the beginning of 2022.

With a lack of access to sanitary products, these women and girls have been forced to use substitutes such as ​​toilet paper (80%), socks (12%), newspaper/paper (10%), or another kind of fabric (7%). 

Commenting about the horrific situation many women and girls are facing, Rose Caldwell, CEO of Plan International UK, called the findings “devastating.” She said: “As we look to an uncertain future, many more families will face tough financial choices, and more young women than ever are likely to face issues affording the products they need,” she said. “Period products are a necessity, not a luxury, and they need to be treated as such.”

However, while we wait to catch up with Scotland, which is now the first in the world to have made period products free, there is assistance for those facing period poverty. Food banks now stock sanitary products, and you can find your local food bank through the Trussell Trust website which contains a directory of nationwide food banks. In some cases, you won’t need a referral. The supermarket Morrisons has a scheme where those in need can get free sanitary products by asking for a package for Sandy. Bloody Good Period, Period Poverty, Freedom4Girls and Hey Girls can also provide help.

When it comes to contraceptives, you can access them for free from the following: 

  • Contraception clinics
  • Sexual health or GUM (genitourinary medicine) clinics
  • Some GP surgeries
  • Some young people’s services
  • Pharmacies

It’s also important to note that contraception services are free and confidential, even for those who are under the age of 16.

Baby food & formula

If you’re facing financial hardship and you are pregnant or have a child under four years of age, you may be eligible for assistance buying food and milk. This can be accessed through the NHS’s Healthy Start program,  where and if eligible, you will be sent a Healthy Start card with money on it, which is updated with funds every four weeks, so you can use it to buy:

  • Plain cow’s milk
  • Infant formula milk (based on cow’s milk)
  • Healthy Start vitamins
  • Vitamin drops 
  • Fresh, frozen, and tinned fruit and vegetables
  • Fresh, dried, and tinned pulses

There are also specialist “baby banks” which are run by local organisations and charities dotted across the UK. Through baby banks, you can access nappies, wipes, baby food, clothes, toiletries, toys, cots, sterilisers, baby baths, and medication. Some active baby banks include London-based organisation Little Village, Baby Basics, and The Nappy Project. 

To find out where your local baby bank is, reach out to Citizens Advice and Trussell Trust, or use Little Village’s interactive baby bank tool.

Toys & Books

While there are a fair few options available for food, drink and sanitary products, you may be wondering if there are organisations, charities, or schemes that can help you access toys and books for your youngsters. After all, a Gingerbread survey found that when looking to make cuts to spending, toys, books and games are often cut out first to make ends meet (52%).

When it comes to accessing books, BookTrust is the UK’s largest children’s reading charity, and entitles every child in England and Wales to a free Bookstart pack before they are 12 months old and again aged 3-4 years ( or 27 months old in Wales).

Likewise, for access to toys, you may find it helpful to look into toy libraries, which are exactly what you’d expect them to be, libraries where instead of borrowing books, children can borrow toys. There are more than 1,000 toy libraries around the UK, and yearly membership is low, costing as little as £3 per family for a year pass. Typically, toys can be borrowed for up to two to three weeks.

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