The Salary Calculator

Seasonal saving tips

by Madaline Dunn

With merriment and mistletoe, gingerbread houses, and Christmas lights, the festive season can be a wonderful time to get together with loved ones. However, it can also be pretty pricey, especially these days. According to research from the Trades Union Congress (TUC), for example, the cost of traditional Christmas dinner food has risen by an average of 18% in the space of a year, three times faster than wages! Meanwhile, Finder predicts that those across the United Kingdom will spend £20.1 billion on Christmas gifts this year.

With the cost of living crisis making us feel the pinch more than ever, it’s likely you’re looking for ways to scrimp and save this Christmas. So, at The Salary Calculator, we’ve compiled a list of seasonal saving tips to make things a little less stressful.

At The Salary Calculator, we’ll explore the following:

• Ways to save on Christmas food shopping,
• Guidance on how to keep presents affordable,
• Tips for low-cost transport,
• The top tips for energy saving in the season, and
• Apps that keep saving simple.

Christmas Food Shopping Saving

With so many little bits and pieces to buy for the festive dinner, it can really add up! However, it can help to know some of the cheapest supermarkets to buy your Christmas food from. Alert conducted a study into this (not including Aldi and Lidl), and found that Asda has come top of the list at £55.90 for festive essentials this year. Holding the middle ground is Morrisons, at £64.24, while Waitrose, perhaps unsurprisingly, was the most expensive at £73.81.

In a separate review by MoneySupermarket, which included Aldi, the budget supermarket was crowned the cheapest supermarket for festive bits in 2022. This was followed successively by Asda, Tesco, and Lidl.

Once you’ve decided which supermarket you’ve chosen for your Christmas shop, you can save further by employing some of the following tips:

• Go plant-based! – There’s a misconception that going plant-based is expensive, however, researchers from Quorn found that going meat-free this Christmas could save you up to 71%. Whether you buy a meat alternative, or make a nut roast, swapping out the meat components to your Christmas dinner can save a fortune, while also helping the planet and saving the animals!
• Check online codes for new shoppers & other discounts – Many supermarkets offer discount codes to first-time online shoppers, which can save you a tonne on your Christmas shopping. This can be as much as 30%. Plus, this time of year, there are lots of other discount codes available as well. Sites like VoucherCodes.co.uk can be a big help here.
• Use your leftovers, don’t throw them away – When you’ve finished your Christmas dinner and you’re full to the brim, often the thought of more food can make you a bit queasy and you may throw away the extra bits left uneaten. This leads to five million Christmas puddings, two million turkeys, and 74 million mince pies being sent to the rubbish tip while still edible. To make sure you don’t add to this, turn leftover veg into soups or bubble and squeak.
• Only buy what you’ll eat – For the above reasons, make sure to buy only what you know you’ll eat. It can be tempting to go ham on Christmas shopping and buy all the little trimmings and extras, but if you know it’s unlikely to get eaten, don’t buy it and save yourself a pretty penny.

Affordable gift giving

Gift-giving can be one of the most stress-inducing parts of Christmas and cause a lot of worry when it comes to finances. That said, there are things you can do to alleviate this stress and have a more affordable Christmas.

Agreeing to a price limit on gifts with friends and family can help to lessen the burden when it comes to gift-giving. This allows you to set a budget and stick to it.

Likewise, choosing ‘preloved’ presents can be another great way to cut the cost of Christmas. There can be a lot of pressure to buy your loved-ones new clothes, toys and ornaments, but there’s a whole world of preloved presents out there, just waiting for a new home. Charity shops can be a brilliant way to go, and you’ll be helping a good cause along the way, and not to mention the planet!

And, why not have a go at making Christmas presents this year? Whether that’s knitting a hat or making Christmas truffles or honeycomb, making your own Christmas presents can save a ton of money, be a fun activity, and add a personal touch to gift-giving.

Transport tips

Transport around the holiday can get pretty expensive, whether that’s because you’re travelling by train or you’re taking a cross-country car trip to see loved-ones. Luckily, we’ve got some travel tips to make things slightly cheaper.

One thing many people don’t think of when travelling by car, is how much extra fuel is used when the boot is packed in full. So, if you’re about to set off on your Christmas travels, remove any unnecessary items from the boot because this can end up costing you more than you’d imagine.

If you’re travelling via train, the age-old advice of booking your trains in advance has never been more true. Figures show that you can save up to 60% on your train fare by booking it early (up to 12 weeks in advance). If you’ve left it a bit late (after all, there is a lot to get done in the lead-up to Christmas), before you book an open return, see if you can buy single tickets or ‘split’ tickets to break up the journey, this can sometimes cut your ticket price by quite a bit.

Saving energy in the season

Everyone knows how expensive energy is right now, and unfortunately, prices aren’t expected to lower anytime soon. However, there are some practical ways to reduce your energy bill this Christmas.

Why not use the microwave for cooking your vegetables, rather than the hob? According to research by Quorn, carrots, sprouts, and peas can all be cooked in under three minutes, working out at around just 3p. The research team found that this is a 79% saving on using an electric hob, and a 6% saving on using the oven.

These days, it’s very much the age of the air fryer, and it’s not surprising why. Air fryers take less time to cook and use less energy – and they can be used for a whole variety of cooking. According to Jenny Tschiesche, the author of The Air Fryer Cookbook, you can cook just about anything, and even the star of the show of your Christmas meal can be popped in if the basket is at least 7-8 litres capacity.

While it might feel tempting to light up your house with an assortment of multi-colored lights and inflatable Christmas decorations, it might be a good idea to leave the lights off this year. You won’t be alone, either. According to a survey from GoCompare Energy, 27% of people are planning on putting up fewer lights this year and a sixth aren’t putting up any at all. However, if you’re overcome by the Christmas spirit, and feel the urge to light it up, purchase LED holiday string lights or timed lights that turn off automatically.

Best apps to help you budget and save

These days, there are lots of apps that can help you work out where you are with your finances and help you save.

The Too Good To Go app, for example, enables people to purchase and collect high-quality food from restaurants and supermarkets that would otherwise go to waste at an affordable price.

Meanwhile, the Emma app is a free budgeting app that tracks your subscriptions, sets up monthly budgets, tracks your payday, and makes payments within the app. Similarly, Money Dashboard links to over 90 UK banks and financial providers so you can get an overall view of your finances and budget accordingly.

Tags: cost of living, discounts, Economy, savings

Pensions in the current climate

by Madaline Dunn

Recently, there have been lots of government budget announcements and a number of changes made in regard to pensions. These changes come alongside discussions around potential alternations to pensions in the future. With such a raft of changes, it can be difficult to know where you stand or how exactly you’ll be affected.

At The Salary Calculator, we’ll walk you through all the information you need to understand pensions in the current financial climate in a straightforward way. We’ll cover the following:

• The triple lock and discussions around its replacement
• The increase the state pension
• The pension age increase
• Upcoming changes to tax payments for retirees

The triple lock

The triple lock was a pledge made by the Conservatives in their 2019 manifesto but was broken over the pandemic. Now, despite doubts, it has been reinstated under the new budget. It ensures that pensions increase in line with either:

• The average wage increase,
• Inflation, or
• 2.5%

As such, there will be a 10.1% increase in State Pensions from April 2023.

According to experts, the government has considered scrapping it altogether and replacing it with a new system following the next election. Some commentators have also forecast that, in the future, state pension entitlement could eventually become means-tested, a model that is currently present in Australia. A means-tested pension top-up was also proposed by former Chancellor Gordon Brown back in 2002.

This kind of means-tested pension is not without its critics, though, and with recent whisperings of this kind of model being proposed, former Pensions Minister Baroness Ros Altmann claimed it would be “disastrous.” Altmann, for example, outlined: “Without a decent basic state pension underpin for everyone, the real risk is that more pensioners will end up poor in retirement and this will damage long term growth for us all.”

The increase in the state pension

As per the triple lock, pensions will rise in line with September’s Consumer Prices Index (CPI) measure of inflation. So,

From April 2023, payments will be as follows:

• £203.85 a week, up from £185.15 for the full, new flat-rate state pension (for those who reached state pension age after April 2016).
• £156.20 a week, up from £141.85 for the full, old basic state pension (for those who reached state pension age before April 2016).

Increasing the pension age

The UK is currently in a recession, and the Treasury is frantically searching for ways to raise money. One of the proposals that would reportedly raise billions is increasing the pension age. As per current legislation, the retirement age is to rise to 67 by 2028. By 2039, this is set to increase further to 68. However, ministers are pushing to increase the pension age to 68 by up to six years earlier in 2033.

Some experts say that if this goes ahead, those who are currently in their 50s will receive £10,000 less when they retire.

New Work and Pensions Secretary Mel Stride has now confirmed that the outcome of the State Pension age review will be published before May 2023 – so a final decision is coming soon. Stride was recently grilled on potential upcoming changes to pensions in the Spring budget. When asked whether or not the portion of people’s lives spent in retirement should shrink (currently at one-third), he said he couldn’t be drawn on what his thoughts are “at this stage” and questioned whether John Cridland’s (who led a previous review of the state pension age in 2017) was right in his calculation of one-third.

WASPI – Women Against State Pension Inequality, meanwhile, has called for the government to introduce fairer policies. Jane Cowley, director of Waspi, for example, said that the government needs to “look less at average figures” and “take greater account of the lives of people in economically disadvantaged areas.” She added: “Often in these areas there is a drastically lower life expectancy and very few years spent in good health during retirement.”

Likewise, Angela Madden, chair of Waspi, said: “Ministers need to recognise that while we are living longer, people in their late 60s and early 70s tend to be in declining health.” Adding: “It isn’t right to expect everyone to work full-time till they drop.”

Upcoming changes to tax payments for retirees

According to reports, if the UK Government increases State Pensions by 10.1% next April, although 12.5 million people would see a boost, another 500,000 could be included in the “tax net.”

Former Liberal Democrat pensions minister and partner at pensions specialists LCP (Lane Clark & Peacock), Sir Steve Webb, explained that this is because of the freeze on tax thresholds, coupled with the increase in pensions.

Elaborating on this, Nimesh Shah, the chief executive of Blick Rothenberg, on the BBC Money Box podcast, called this a tax increase “by the back door.” He continued: “Everyone uses the word stealth tax increase. They didn’t want to increase the headline rate in the run-up to the next general election.” Shah said that this is an example of the fiscal drag effect: “Someone’s wages go up but they are paying more income tax because of those frozen allowances. The state pension is increasing by 10 percent which is great news but pensions are now going to get dragged into income tax.”

 

Tags: cost of living crisis, pension, pension age, retirement, state pension