The Salary Calculator

Universal basic income trialled in two places in England

by Madaline Dunn

There’s no denying we are living in challenging times right now. The cost of living crisis isn’t subsiding, financial insecurity is on the rise, the climate crisis is worsening. We’re also living in an era where technology is reshaping quite literally everything, including the world of work with AI and automation ramping up.

Universal Basic Income (UBI) is being proposed as a way of safeguarding against these disruptions, bolstering income security and reducing poverty.

In this week’s article, we’ll walk you through:

• What universal basic income is
• Where, why and how is it being trialled
• The pros and cons of the introduction of universal basic income.

What is universal basic income?

The idea of Universal Basic Income stretches as far back as 1516 in Sir Thomas More’s Utopia, and it’s essentially a guaranteed income for everyone in society. As of late, following the disruptions of the COVID-19 pandemic, the rise of automation and AI, it’s becoming a serious conversation.

It’s been tried in many places all over the world. In the US, for example, there are long-running UBI schemes, including in Alaska. It’s also seen in the Eastern Band of Cherokee Indians Casino Dividend in North Carolina. Elsewhere, Finland has trialled UBI schemes, as have Spain, the Netherlands, Kenya, India and more. Currently, in Wales, there is a basic income pilot for 18-year-olds leaving the care system. Over 500 participants are receiving £1,600 a month for two years after turning 18.

As noted, the pandemic really revitalised conversation around UBI, and back in 2020, over 170 MPs and peers actually called for a basic income. As we know, this didn’t go forward, and instead, the government introduced furlough.

At the time, the now Prime Minister and then Chancellor, Rishi Sunak, told the Commons: “We’re not in favour of a universal basic income, although we have strengthened the safety net for the most vulnerable in our society with over £7bn invested in improving our welfare system.”

Speaking about the increasing need to pivot toward UBI, Will Stronge, the director of research at the thinktank Autonomy, said: “Our society is going to require some form of basic income in the coming years, given the tumult of climate change, tech disruption and industrial transition that lies ahead. This is why building the evidence base and public engagement now is so important, so the ground is well prepared for national implementation.”

What’s going on with the trials?

The UK is currently running a micro pilot scheme to test this out. Led by Autonomy, the scheme will run in central Jarrow, in north-east England, and East Finchley, in north London. A total of 30 people will be randomly selected from a group of volunteers, with 20% of places allocated to people with disabilities. They will receive £1,600 every month for two years. This will cost £1.15m across the two-year period.

Alongside this group, there will also be a control group, which will not receive the basic income amount, and their experiences will be monitored alongside the other group.

The likes of Green MP Caroline Lucas welcomed the plans and said: “It’s so exciting to see these plans for England’s first ever basic income pilot scheme,” she said. “We are in such uncertain times – worsening job insecurity, spiralling cost of living and a welfare state creaking at the seams.

“We need big, bold ideas to provide security and dignity for all – tackling poverty, improving wellbeing and transforming society. The government can’t ignore this idea any longer,” she added.

The Green Party has long advocated for its introduction. Back in 2019, for example, it became the first political party to promise a fully costed Universal Basic Income for every resident by 2025.

Meanwhile, Cleo Goodman, a co-founder of the initiative Basic Income Conversation, commented: “We’re hopeful that this plan will result in the first ever basic income pilots in England. No one should ever be facing poverty, having to choose between heating and eating, in one of the wealthiest countries in the world. Basic income has the potential to simplify the welfare system and tackle poverty in Britain.”

According to estimates, if this kind of UBI programme was implemented on a national level, it would reportedly cost just under £1 trillion.

Weighing up the pros and cons

There’s no escaping the working landscape looks very different on the horizon, and indeed, Stronge notes: “With the decades ahead set to be full of economic shocks due to climate change and new forms of automation, basic income is going to be a crucial part of securing livelihoods in the future.”

Further, he added that “all the evidence” demonstrates that it would “directly alleviate poverty” and “boost millions of people’s wellbeing.” He says that, ultimately, the potential benefits are “just too large to ignore.”

But, it’s not without its critics, and, as we’ve outlined above, it would be expensive, as well as requiring a huge overhaul of both our tax and social security systems. But, with such big disruptions to work and living in store, large-scale changes seem almost inevitable.

There are also critics who argue that UBI would de-incentivise people from working and result in inequity. That being said, regarding the former point, a Finnish study on UBI found that there was actually a greater incentive to work, and also meant that people had more time to pursue business ideas.

With the trial running for two years, it will be some time until we have data to analyse, but it’s an idea that’s increasingly entering the mainstream.

Tags: Economy, employment, universal basic income

Green home upgrades to help you save money

by Madaline Dunn

Although the energy price cap dropped to £2,074 on 1 July 2023, it’s still significantly higher than it was before, and many are still struggling to pay their energy bills. As a result, many are looking for ways to make their homes more energy efficient with green upgrades. In fact, research shows that 72% of homeowners want to make their homes more energy efficient, and 40% reportedly have plans to make improvements before the end of the year.

This week, at The Salary Calculator, we’ll walk you through the following:

• Green tips that can help you cut back on energy usage and save cash
• Some of the top green upgrades, how much they cost and how much they save
• Grants and incentives to assist you access upgrades

Green tips that save cash

You’ll be glad to hear that green upgrades don’t have to cost the earth and small changes can indeed have a huge impact. LED bulbs are one of these small changes. These bulbs are far more energy efficient than halogen bulbs. They last five times longer and use 80% less energy while producing the same amount of light. Aside from this, there are emissions savings to be had. In fact, the Energy Saving Trust found that if everyone made the switch, yearly, 1.7m tons of carbon emissions could be saved!

So what’s the full cost versus savings breakdown?

The upfront costs of a LED light bulb are around £5.40 upfront, and with £19 in energy costs across a 20,000-hour lifetime, this amounts to £24.40. However, research shows you can save £153.40 by upgrading just one bulb to LED.

Weather strips are also a low-cost way of both weatherising your home and saving money. Air leaks in your home can mean that both hot and cold air escape. Some estimates are that you can access between 10-20% annual energy savings. So what’s the initial cost? Just £3. The savings? As much as £669 after five years, according to some estimates.

Smart thermostats, meanwhile, have also been highlighted for their ability to assist in keeping bills low. Once you’ve got a smart thermostat installed, you’ll be able to be in control of your heating – even when you’re not at home, adjusting your home’s climate. Makes like Tado even provide you with monthly bill predictions and room-by-room comparisons. While varying from around £100-£200 for installation, Google’s Nest estimates that people can save up to 16.5% of their energy usage. Tado, meanwhile, says this can go up to 31%.

And, from one smart device to another, smart metres can also help people be greener and get more insight into their energy usage, which, in turn, can help you take action. Research from Smart Energy GB found that if everyone made the switch, savings could go as high as £560 million.

If you want more ideas on green tips, Nationwide recently launched a tool which gives people more insight into how to make their properties greener.

Green upgrades

Beyond small changes like LED lights and weather strips, if you want to make some larger changes, there could be even more savings to be had. Roof installation, for example, magnifies the impact of weatherstripping, helping you reduce both heat loss (up to a 25% reduction) and heating bills. While you’ll spend an average of £550, you could save £2,079 after five years. Not only that, you’ll also shrink your carbon footprint by around 530kg a year.

Double glazing can also be a barrier to heat loss. Estimates are that people in Britain lose between 10- 40 per cent of their heat through their windows. However, double glazing can lead to big savings – up to £235, while reducing your carbon footprint by 6%. Some research has found it can even boost house value. It’s an investment that takes time to pay off, but there will be a payoff. Head over here for a full breakdown.

Rooftop solar panels are another way to make big savings – although there are also some big upfront costs, too. Prices will vary depending on system size and number of panels, but research shows that:

• Installing a 3kW panel system with 12 panels could cost you between £5,000 to £6,000 to set up, but will save you around £850 a year on bills, and after 25 years, around £21,250
• For a 5kW panel system with 20 panels, you’ll be set back between £8,000 and £9,000, saving you £1,460 and up to £39,550 after 25 years.
• If you decide to go bigger than this, with a 6kW panel system that has 24 panels, you’ll pay between ​​£8,000 – £9,000 but save over £1,460 and over £40,325 after 25 years.

Grants and initiatives

These bigger investments in green upgrades can set you back quite a bit, as we have seen, despite their long-term savings.  However, there are grants and initiatives which can assist you in greening your home.

While the Green Homes Grant, which is no longer open to people, might have been deemed a “slam dunk fail” by the Public Accounts Committee (PAC) report, there are other schemes being delivered regionally.

For example, back in March 2023, the government announced that £1.4 billion would go to authorities, providers of social housing and charities to upgrade homes and off-grid households with energy efficiency measures.

Cumberland Council and Westmorland and Furness Council are some of the recipients of funding from the government Home Upgrade Grant Phase 2 (HUG 2) scheme, having been successful in their bid for a minimum of £12.4 million.

The ‘Bright Green Homes’ project across the South West will also see over 500 households in Bristol, North Somerset and Bath & North East Somerset (BANES) receive funding for energy efficiency and renewable upgrades.

Similarly, the Cambridgeshire and Peterborough Combined Authority Consortium secured £82,313,888 in its Home Upgrade Grant Phase 2 funding bid.

A full list, along with eligibility criteria, can be found here. 

Some energy companies also offer free insulation or grants to assist you with making your home more energy efficient, in line with the Energy Company Obligation (ECO) Scheme. Learn more about that here. 

Tags: cost of living crisis, Energy prices, savings, upgrades

Travel money: Navigating exchange rates 

by Madaline Dunn

While we might be nearing the end of summer, it may be the case that you’ve not yet escaped for your summer holiday. After all, August is typically the most popular month for a getaway. If this is the case, or perhaps if you’re planning on taking an autumnal vacation abroad, it’s likely that exchange rates will be on your mind – or at least they should be.

Getting the most bang for your buck can really help you make the most of your getaway, and at The Salary Calculator, we’ll show you how.

Navigating foreign exchange rates

There are a total of 180 currencies that are recognised by the UN as legal tender, with the four most widely used being:

• The US dollar (USD),
• The Euro (EUR),
• The Japanese Yen (JPY) and
• Great British Pound (GBP).

They’re also fluctuating all the time, and different currency exchanges offer different rates. For this reason, it’s always important to see what’s out there depending on where you’re going and how much you’re looking to exchange.

The pound has seen some serious fluctuations in recent years, from the 31-year low following Brexit, hitting its lowest point against the US dollar since 1985, following the budget announcement by former Prime Minister Liz Truss and Chancellor Kwasi Kwarteng. However, 2023 is looking like the year the pound rebounds after ranking as one of the worst-performing currencies of 2022.

Right now, if you’re converting pounds into euro, one of the best rates for cash delivery for £500 is Eurochange, which offers 1 GBP = 1.149 EUR, or 1 EUR = 0.870 GBP. If you’re planning on travelling a little further afield to Australia, for example, and exchanging £400, Travel FX offers the best rates at 1 GBP = 1.886 AUD, or 1 AUD = 0.530 GBP. If you fancy trying some of the fancy Swiss chocolate in Switzerland, Currency Online Group is the right place for you to exchange £500, there you’ll get 1 GBP = 1.1063 CHF or 1 CHF = 0.904 GBP. Remember, this will differ depending on whether you get your money delivered or pick it up in person.

You can find out more about where you can find the best exchange rates by heading over here. 

Tips for getting the best rates and making your money go further

As we’ve noted, exchange rates vary widely depending on which currency exchange you choose and how much you’re exchanging, so in order to ensure you get the best rates, research is your best friend. Make sure to compare all different rates to ensure you get the most for your money.

According to Alon Rajic of MoneyTransferComparison, excessive exchange rate margins are still “very prevalent” among banks and some specialist providers. Indeed, Rajic noted that people still pay over a 5% markup on their currency exchanges – this, Rajic says, essentially removes benefiting from any of the “recent gains” made by the pound.

If using your card abroad, it’s also important to factor in foreign transaction fees. With foreign transaction fees, implemented by credit and debit card issuers and ATM networks, they are charged per transaction on purchases or withdrawals made overseas and vary between 2% to 3% of the purchase or withdrawal.

If you’re asking yourself whether using a cash machine abroad is better or worse than changing cash at the airport, we’re here to tell you that ATMs usually offer better exchange rates. The reason? Currency exchange stores and kiosks at the airports mark up the exchange rate for profit – so watch out! That said, you need to be wary because withdrawing cash from an ATM can see fees of almost 5%. It’s advised not to use Bank of Scotland, Lloyds Bank or TSB. These cards charge 50p to £1.50 for transactions on top of their normal exchange-rate charge, although spending euros in the EU, Iceland, Liechtenstein or Norway, is exempt.

Another thing to remember is to always choose to pay in local currency if using an overseas card.

It might also be worth getting a specialist travel credit or debit card, as this can give you ‘near-perfect’ exchange rates worldwide.

According to MoneySavingExpert, some of the best out there right now include:

• Barclaycard Rewards (top pick visa Credit card) – With this card you get interest-free withdrawals, and an ongoing 0.25% cashback.
• Chase (top pick Mastercard visa card) – This offers fee-free spending abroad and ATM withdrawals, and 1% cashback -although bear in mind that there’s a £1,500/month limit on ATM withdrawals.
• First Direct (top pick Mastercard debit card) -This offers fee-free spending abroad and ATM withdrawals, plus you’ll receive £175 if you switch over your existing bank account.

Finally, when researching, it’s advisable to look for a buy-back guarantee. This means that you’re guaranteed to keep the initial exchange rate, and there will also be no additional hidden costs.

Also, remember that if you use a bureau de change to exchange cash, and it goes bust while it has your money, you have no protection. A quick swap there and then is the best option to safeguard yourself against this potential risk.

Tags: Currency, foreign exchange rates, holiday money, holiday travel