The Salary Calculator

The rising rent issue

by Madaline Dunn

Rent prices in the UK ​​are rising at the fastest rate in five years, further hiking up the cost of living as millions of people feel the squeeze. As the ‘cost of living crisis’ continues, politicians have commented that it’s a “very difficult time” but are failing to take meaningful action.

As more and more low-income tenants are forced to make ‘heat, eat or pay rent’ choices, many argue there has never been a better time to reintroduce rent controls to help address the crisis.

The latest news is undeniably distressing, but at The Salary Calculator, we’ll make sure you’re up-to-date with the latest on personal finance. In this article, we’ll walk you through:

• Why rent prices are rising
• What the experts are saying about the situation
• Whether calls for rent controls are being taken seriously

What’s going on with rent prices?

In the UK, rent prices are on the rise, with statistics from ONS showing that this rise is at the fastest rate in five years. Research shows that the average annual UK rental growth has also reached a 13 year high, with rents increasing by 8.3 % by the end of last year. Unfortunately, there is further bad news, with Rightmove predicting that rent will increase by another 5% in the year ahead. Reports have revealed Wales and the northwest of England saw the largest increase in asking rents. There, rent prices increased by 12%, while in the southwest of England, rent rose by 11%.

Of course, this pinch is pushing many to the brink. Back in 2021, Citizens Advice revealed that half a million private renters in the UK were behind on their rent, with an estimated £360 million owed UK-wide, and within the last year, the situation has not improved. Together, housing charity Crisis and Heriot-Watt University have forecast that over 66,000 more people will be homeless by 2024. Likewise, a survey of 155 English councils found nine in ten town halls expect to see a surge of evictions from private rented homes in 2022.

So, exactly why are rent prices so high? Well, right now, there’s a high demand for renting and a low number of rental properties available, which is in part due to Covid-19’s disruption to the housing market. Propertymark, the membership body for property agents in the UK, has even warned that the situation is likely to worsen, with more landlords planning to exit the market due to “increasing regulation and taxation.”

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, calls this predicament a “dual problem” for renters, whereby rents rise while there are fewer properties on the market to choose from. Speaking to i News, she said: “No wonder we’re hearing so many stories of renters getting dragged into bidding wars, where they’re forced to pay more than the advertised rent in order to have somewhere to live.”

What are the experts advising?

When faced with rent hikes, often it feels like landlords hold all the cards, and there is nothing you can do as a renter to fight back, however as a renter, there are a few things you can do.

Renters are well within their rights to question why their landlord is increasing their rent. Likewise, it’s important to remember that landlords can’t just increase their rent prices by how much they want or whenever they want.

Once you’ve found out why your landlord is hiking your rent, you can also try to negotiate on the price. When negotiating, Citizens Advice recommends that tenants look at similar properties in the area and use those rent prices as “evidence” to show why the hike shouldn’t go ahead or that it should go ahead at a lower rate. The organisation suggests that often landlords will prefer to negotiate rather than lose their tenants.

That said, negotiation isn’t always possible, and in situations where tenants feel like they’re running out of options, they can appeal to a tribunal for rent complaints.

Unfortunately, if you’ve exhausted all your options, you may have to look into downsizing, becoming a lodger, sharing a house with other tenants, or moving into a cheaper area. Speaking about the terrible ultimatum renters are being faced with, Coles said: “Those hoping to stay in their home for another year are facing huge rental hikes. If they can’t afford it, they face the horrible expense and upheaval of a move – as well as the prospect of trading down to something smaller or in a less expensive area.”

Calls for rental controls

It is undeniable that the housing market is out of control in the UK, and to combat this; some are calling for rental controls to be reintroduced back into the UK. Rental controls are regulations that ensure the affordability of housing, and place a cap on the amount a landlord can charge tenants when leasing a new property or renewing a lease. These controls were essentially removed back in the 1980s during the Thatcher era, with the Housing Act 1988.

Now, Sadiq Khan, Mayor of London, is leading the call for change in London, and in the past has said that introducing rent controls in London could act as a “blueprint” for other cities with out of control rent prices.

Elsewhere, in Bristol, local housing chief, Tom Renhard, is lobbying Ministers to access rent control powers and wants to involve other core cities with this plan. The cabinet member for housing and communities argues that while there are “some good landlords”, there are also “a lot of terrible ones.” Adding: “Some [landlords] aren’t doing the repairs even now when rents are going up. If you can’t afford to upkeep a home, then why are you renting it out? People deserve to live in a home that’s fit for human habitation.” Bristol City Council is subsequently held a “Renting Summit” on 2 March 2022 to explore this.

Tags: housing market, Personal finance, rent

The National Insurance hike: What, How and Why

by Madaline Dunn

In another financial blow to many, the government has announced that the National Insurance (NI) hike will, in fact, go ahead. This comes at the same time as energy bills skyrocket, food costs rise, and interest increases, leaving many concerned about what it will mean for them and the general cost of living. 

At The Salary Calculator, we’ll help you get to grips with the upcoming changes and explain:

• What the National Insurance hike is all about 
• How much more money you can expect to pay
• Who will be affected most by the hike

The National Insurance hike 

On 28 January, Chris Philip, Minister for Technology and the Digital Economy, announced that the planned National Insurance increase would indeed go ahead in April, much to the dismay of millions in the UK. 

This move goes against the Conservative Party’s 2019 election manifesto, and according to the government, is expected to raise £36 billion over a three year period. The hike is reportedly in response to Covid and the pressure it placed on the NHS. A portion will also be dedicated to reforming the social care system.

Defending the hike, in The Sunday Times, Prime Minister Boris Johnson and Chancellor Rishi Sunak called the policy “progressive,” adding: “We must clear the Covid backlogs, with our plan for health and social care – and now is the time to stick to that plan. We must go ahead with the health and care levy. It is the right plan.”

How much money you can expect to pay

The changes to National Insurance will come into effect on 6 April 2022 and according to reports for many across the country this hike is the equivalent of a 10% increase in deductions from pay packets. The rate of dividend tax will also increase by 1.25 percentage points. 

Those earning £9,880 a year, or £823 a month, won’t have to pay National Insurance, but those earning £12,875  or more will see their NIC increase. For example, basic-rate taxpayers will see their NIC jump from 12% to 13.25%. So, those earning £24,100, will say goodbye to an additional £180 a year which translates to £3.46 a week, or £13.84 a month. Meanwhile, those on £50,000 will pay £505 more a year. 

Those who are higher-rate taxpayers and on a salary of £67,100 will pay £715. While those on £100,000, will pay £1,130 more.

Who will be affected the most by the hike?

Although the tax will be progressive, with those who earn more paying more, those on £100,000 a year will pay just 7% of their overall salary in NIC, which is the same proportion as those on just £20,000 a year. Moreover, the NI hike means that someone on £50,000 a year will pay £5,086, around 10% of their gross salary.

With so many families already struggling to make ends meet, many argue that the NI increase should be postponed. Commenting on this, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Now is not the time for a tax hike: the National Insurance rise in April needs to be shelved.”

This is something echoed by Laura Suter, head of personal finance at investment platform AJ Bell, who said poorer families will be hit the hardest: “For a much bigger proportion of low-income families, monthly costs go on things like energy bills and food bills, who tend not to have the same ability to cut back as wealthier families.”

Tags: Economy, living costs, national insurance, salary

Energy prices on the rise

by Madaline Dunn

News of rising energy prices will come as another financial knock to many people across the UK after what has been a turbulent two years. The cost of living is set to increase once again following a worldwide squeeze on gas and energy supplies.

In October, around 15 million homes saw their bills up 12%. Unfortunately, the situation is only likely to worsen, with industry leaders calling for government intervention to help tackle the “national crisis”.

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

• How much you can expect costs to rise by
• The causes of the price hike
• Whether there’s anything you can do to navigate this

How much will costs rise?

In the UK, the trade body Energy UK has released some bleak forecasts regarding energy bills, outlining that they could rise by 50% by springtime, which will ultimately hit low-income households and small businesses the hardest.

As a result, reports say that the energy bill for the average household could increase by £600 by April – and looking forward, next year, bills could reach £2,200-a-year on average.

Of course, with other rising living costs, this is concerning news for many. Alex Belsham-Harris, of Citizens Advice, says that already people are feeling the pinch. He added: “With major hikes to energy bills from April and other costs of living rising, the quickest and easiest way for the government to provide direct support for those hardest hit will be through the benefits system.”

What’s causing the hike?

Energy costs are on the rise for a number of reasons. Wholesale energy prices have surged as economies emerge from the pandemic, with demand increasing and fewer exports. Last year’s cold winter in Europe also played a part. So, there has been a range of technical and geopolitical issues at play. Since 2020, energy prices have risen by 250%, and in August, they rose further by a staggering 70%. This has led to more than 20 domestic suppliers going bust as the price cap prevented companies from charging consumers more to deal with this.

Although Ofgem’s price cap has limited energy suppliers in regards to how much they charge, this is to move in April and could reach £1,995-a-year per household.

What can you do?

It can be stressful thinking about the prospect of rising energy prices, and it’s understandable to have concerns and questions.

Some important information to remember is that if you’re struggling to keep up with payments, don’t put your head in the sand. Reach out to your supplier as soon as possible. Suppliers can help set up an affordable payment plan if you feel things are spiralling – they may even pass on the details of charities that can help you with your financial burden.

That said, if you feel as though the situation has advanced beyond that, it may be time to reach out to a debt adviser to help you navigate missed payments and the like.

Likewise, it’s worth noting that if your provider is one of the unlucky ones caught up in the crisis and goes bust, and you have credit on your account, it won’t be lost. Instead, your balance will be transferred to your new energy supplier – the same goes for any debt on your account; it will be passed on.

Of course, there are ways you can use energy more efficiently, too, to keep your bills lower. Simple things like not leaving appliances on standby and switching off lights when they’re not needed can have a big impact. Switching to low energy light bulbs can keep costs lower, too, as can using draft excluders and investing in better insulation and double glazing – although the latter may not be financially viable options for everyone.

Tags: Economy, Energy prices, living costs, Personal finances

New year, new you: Rethinking finances in 2022

by Madaline Dunn

2022 is finally here, and after what has been a difficult financial time for many, you may be looking for ways that you can improve your finances, especially following the splurge of the festive season.

Thousands of people make New Year’s resolutions each year, with finances often being a key focus. However, at the same time, many who make financial New Year’s resolutions find them hard to stick to. Often this is because the resolutions people make are inflexible, extreme and ill-thought-out.

At The Salary Calculator, we’ll walk you through some top tips that can send you on your way to a more secure and safe financial future and outline some resolutions that are easier to stick to. In this article, we’ll explore:

• Ways to build your credit
• How to build up an emergency fund
• How remortgaging can be helpful
• How to tackle debt
• How to become more financially literate
• How to set your sights on a new job

How to build your credit

When it comes to building credit, it may not be something you thought about until you decide you want to finance a car or perhaps buy a house. The credit system essentially gives lenders information about you and your finances, and if your credit score isn’t great, this could affect your ability to, for example, buy your dream house, or may mean you’re faced with pretty rubbish interest rates.

You can start building your credit in simple ways, such as getting a credit card. After making this decision, ensuring you pay it off in full each month will help to boost your credit score. Likewise, it’s also important to use only a small percentage of your credit limit, say up to 25%, to keep your score high. The same goes for if you have an overdraft; staying far below the limit and paying it off shows your responsibility when it comes to finances.

Keeping an eye on your household bills and setting up a direct debit is also a good way to make sure your credit score doesn’t dip into the red.

Building up an emergency fund

The last two years have certainly taken a toll on many people’s finances, and in the New Year, many may be looking to prepare and safeguard against future turmoil. Each month, if you can afford it, it can be a good idea to put away a percentage of your income for a rainy day.

According to WalletHub, working towards building up an emergency fund “should be one of the first orders of business for any financial makeover.”

The best way to start is by setting out clear goals and working out what you can realistically save. This amount will vary depending on your financial situation and type of occupation.

That said, once you’ve settled on a figure you feel comfortable with, it’s important to put this money aside in an account that enables instant access, so when you need your emergency fund the most, you’re not faced with lots of red tape and barriers. When choosing your account, it’s best to take a look at what’s out there on the market, and compare and contrast. There are a number of comparison websites that can help you out here, including Compare the Market, Money Supermarket, and GoCompare.

Remortgaging in the New Year

Remortgaging in the New Year can be a great way to save money. If, for example, your deal is coming to its end, your home’s value has increased, or you want a better rate, this could be a good move for you.

According to Norton Finance, the average household can save £400 each year through remortgaging. That said, it’s important to take into consideration whether remortgaging is the right decision for you. If, for example, your financial situation has recently changed, or perhaps you’ve experienced credit issues, or if you’re already on a good rate, this may not be the move for you.

Tackling your debt

Confronting one’s debt can feel daunting, and often it can feel easier to bury your head in the sand. However, the New Year is a great opportunity to set out a plan to face your debt head-on.

Starting to pay off your credit card debt is a great step towards better financial health, and of course, becoming debt-free can be incredibly liberating. This can be done in small chunks to make it manageable.

Elsewhere, when paying off your debt, make sure to prioritise what needs to be paid off first. Consolidating your debt can be helpful here, too, if you have different loans and credit card balances. If you’re unsure about how to go about this, speaking to financial experts can be a great way of accessing guidance.

Become more financially literate

Becoming more financially literate can make a world of difference to your life. Research shows that, in fact, few people are financially literate (just one in three in the UK).

Better financial literacy can help you to set better financial goals, invest your money more wisely, and save more efficiently. Whether it’s checking out the latest finance podcast, hitting the books or using financial management tools, accessing this kind of knowledge can place more control in your hands, help you avoid debt, and keep an eye out for risky investments and fraud.

There are some great podcasts out there that can help you on your way to becoming more financially savvy, including BiggerPockets Money, Future Rich, and Money 101, which provide down-to-earth, accessible guidance and top tips, making finances less intimidating.

Meanwhile, if you’re looking to get your nose stuck into some books, Money: A Users Guide – Laura Whateley, Real Life Money: An Honest Guide to Taking Control of Your Finances by Clare Seal, and Manage Your Money Like a F*cking Grown-Up’ y Sam Beckbessinger, may help to give you a fresh perspective on finances.

Seeking out a better paying job

The New Year is the perfect opportunity to seek out a fresh start job-wise. You may be aware that you’ve got as far as you can in your current role, and perhaps you’re not receiving the kind of wage packet that your skills entitle to you. Say goodbye to rubbish pay in the New Year, and take on the adventure of a new job. Reports even show that January is the best time of year to lookout for a new job!

That said, when looking for a new job, it’s also important to take into consideration a few different factors. Look inwards, and ask yourself why you’re seeking a new role, what kind of skills you have to bring to a new role, and what jobs do you expect to be eligible for. It’s always great to be ambitious and strive for something new and exciting, but be sure that you’re realistic in your approach, too.

Take a look at your CV and resume, ensure they’re up-to-date and in tip-top condition. This will allow you to put your best foot forward. Branch out on Linkedin, too. Connections are never a bad thing, and networking can even help you access a contact that could lead to you landing your dream job. Of course, practice interview tips as well, especially if it’s been a while since you last did an interview! This way you’ll be able to speak confidently about your abilities, experience and accomplishments and win over your interviewer.

Tags: 2022, debt, Economy, Personal finance

All you need to know about UTR numbers

by Madaline Dunn

[Sponsored Post]

Self Assessment: It’s coming around to that time of year again. While some may have already completed and sent off their annual tax return, there are also many who have not! In 2020, 700,000 taxpayers waited until the last day to file their return, and a staggering 26,562 taxpayers left it to the last hour.

So, if you haven’t filed your tax return yet, and perhaps are doing so for the first time, you may have a few questions, including; what on earth is a UTR number?

Don’t worry; there’s still plenty of time to file your tax return before 31st January and make sure you’re not faced with late payment fines. At The Salary Calculator, in this article, we’ll get you to speed and explain:

• What a UTR number is
• When you need a UTR number
• How to register for a UTR number if you don’t have one
• What will happen after registering for a UTR number
• Where you can find your UTR number

What is a UTR number?

UTR stands for Unique Taxpayer Reference, and this is a 10-digit number that is unique for each person or business. Just as with a National Insurance (NI) number, once you have one, you have it for life. So, even if you’ve been out of business for a while, you’ll never lose your UTR number, your number will just become dormant.

A UTR number is issued by HMRC and sometimes includes the letter K at the end of it.

When do you need to provide a UTR number?

A UTR number is required if you:

• Need to create an online account with HMRC
• Are self-employed or have a limited company
• Owe tax on savings, capital gains, and dividends
• Must register individual taxes
• Work within the Construction Industry Scheme (CIS)

How do you register for a UTR number?

If you don’t already have a UTR number and need one, the most simple and fastest way to get one is to apply online on HMRC’s website.

Of course, not everyone’s preferred method involves a computer or laptop, so rest assured, you can also apply to get your UTR number via letter too. That said, this way is, unfortunately, much slower and will involve postage fees as well.

When it comes to registering for a UTR number, this must be done within the first three months of opening your business, regardless of your occupation.

In order to register, you must also submit a few different pieces of information. This information includes:

• Your name, DOB and address
• Your contact information (preferred number and email address)
• Your NI number
• When you commenced self-employment
• The type of business you have
• Basic business information (address, number, name)

What happens after registering for a UTR number?

Once you’ve applied for your UTR number, there are a few things to bear in mind. First of all, it can take up to ten days for your UTR number to arrive, sometimes longer.

In addition to this, once you’ve heard back from HMRC and received your activation code, don’t wait around too long before using it, as it expires at 28 days.

Where can you find your UTR number?

Your UTR number can be found in a number of places, including:

• Statements of accounts
• Your Self Assessment Tax Return
• HMRC payment reminders
• HMRC Self Assessment notices

If you think you’ve either misplaced or lost your UTR number, don’t panic. Contacting HMRC is your best bet. When reaching out to HMRC, you should have your NI number to hand, as you will be asked for it when you call.

HMRC can be contacted via:

• 0300 200 3310 (UK)
• +44 161 931 9070 (Outside UK)
• 0300 200 3319 (Textphone)

Final thoughts

Navigating the world of tax returns can be anxiety-inducing for some; that said, there are several sites out there that can lend a helping hand. HMRC are always available if you need guidance on your tax return and can answer any burning questions.

Go Simple Tax also helps to make things simple and straightforward. The software provides guidance, as well as hints and tips on how to save money.

Tags: Economy, Employed and Self Employed, Self Assessment, self employed, The Salary Calculator, UTR number