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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.

The ongoing cost of living crisis appears to be an endless one. Living standards face their largest fall since the mid-1950s. Millions are being faced with dire financial situations and around 1.3 million are confronted by “absolute poverty.” As the situation worsens, many are desperately searching for a solution, and some are looking toward switching jobs as the answer. 

That said, some experts are warning that the grass is always greener on the other side, and that while workers may be lured in by higher-paying salaries, switching now might hurt them in the long run. 

At the Salary Calculator, we’ll explore:

• How the cost of living crisis is affecting jobs
• How switching jobs may benefit you
• What to watch out for when thinking of exploring a new position

Cost of living crisis encourages job switches

Research conducted by Totaljobs has found that more and more people are looking for new job opportunities to help support them through their financial woes caused by the cost of living crisis. The UK job found that workers’ salaries are increasingly squeezed, and 47% are now living from payslip to payslip. 

Despite the ongoing financial challenge faced by many, nearly half (48%) have not received a pay rise, and those who did (42%) saw a rise that failed to meet the current rate of inflation. This has pushed 17% of workers to take on another job to supplement their income; meanwhile, 30% are taking on additional shifts. If you are one of the people thinking about taking on a second job, at The Salary Calculator, we can help you calculate your total take-home, just head over here.

For many, though, the crisis is pushing them to look further afield. Now, nearly 40% (37%) are looking to change lanes and find a new job. Those who were classified as essential workers were twice as likely to have to leave their jobs and move into a new sector due to higher wages. 

Commenting on the figures, Jon Wilson, CEO of Totaljobs, said that key workers were those who suffered most, despite the fact society “couldn’t have functioned without them” during the course of the pandemic. “This research illustrates that everyone is feeling the pinch of the rising cost of living – yet it is disproportionately felt by our key workers – to the extent that some are looking to move jobs for one that provides them with more financial security.”

Research from PricewaterhouseCoopers (PwC) has also uncovered that nearly one in five employees intends to leave their current jobs and find a new role within the next year. A further 16 per cent plan to leave the workforce on a temporary or permanent basis. Similarly to Totaljobs, the research, which considered responses from over 2,000 people in the UK, found that the main motivation for switching job roles was pay (72%).

The benefits of making the change 

Research from the Office for National Statistics (ONS) last year, revealed that those who switched jobs saw a pay increase of 6.6%. That said, the figures show that the size of the rise was dependent on sector and experience. 

Pay growth for those in the arts, entertainment and recreation sectors hit 21%, meanwhile, for those working in information and communications, the increase was one percent lower (20%). While employees working in these sectors saw significant salary growth, the research showed that the increase was even higher for those who moved to a new industry; overall median earnings growth in this scenario stood at 2.1 percentage points higher. 

For those with more years of experience within their sector, the benefits of a switch were also greater, with average earning growth in this bracket at just over 16%.

If you’re considering switching jobs, head over to this page to compare your current salary with the salary offered by a potential new job.

What do the experts say?

While there are certainly financial benefits to be had from a job switch, it’s important to note that it’s not all sunshine and roses. Some experts have said that switching jobs for financial reasons may mean less stability, and a loss of statutory rights. From a broader perspective, some have also noted that switching jobs regularly might make it more difficult to keep track of one’s pensions and ensure one is keeping up with one’s levels of pension contributions. 

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, outlines: “The grass is slightly greener on the other side of the fence, but the ground may be less stable.” Adding: “Switching jobs will boost your pay by an average of 6.6%, and switching industries, occupations or regions at the same time can have an even more dramatic effect. But before you jump the fence, you need to know what you’re giving up.”

Discussing the impact of switching jobs on pensions, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments: “You may have a job where pension contributions are above the auto-enrolment minimum, say 12%. If you then left that job the next role might only come with an 8% contribution, and if you don’t take action to increase your contribution back up to this level, then you will likely see a significant shortfall by the time you hit retirement. As we move jobs more often care needs to be taken that contribution levels are maintained wherever possible.”

Morrisey continues: “In addition, regular job moves increase the likelihood that you will lose track of pensions from previous employers. You may misplace paperwork or stop receiving documents because you moved house and didn’t update your details, or your provider might change name making it harder to track down.”

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All VAT-registered businesses in the UK must now meet new reporting requirements introduced as a consequence of Making Tax Digital. If you don’t run a VAT-registered business, Making Tax Digital won’t have affected you so far. You may not have even heard of Making Tax Digital.

However, if you report income and pay tax via Self Assessment, come April 2024, Making Tax Digital is likely to impact you. And the changes that Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will bring are significant, so finding out more about MTD for ITSA now is recommended, so you’re better prepared and avoid having to pay a non-compliance penalty.

In this guide you can:

• Find out what Making Tax Digital for Income Tax Self Assessment is.
• Discover whether you’ll be affected by MTD for ITSA.
• Learn how MTD for ITSA will change the reporting of taxable income.

What is Making Tax Digital?

Making Tax Digital is an important government digital initiative that is already transforming the UK tax system. Its introduction got underway in 2019 and it will continue in stages until complete. The VAT reporting system has already been digitised and Income Tax Self Assessment is next, before Corporation Tax gets the MTD treatment. Full introduction of MTD across the entire UK tax system remains some years off.

Why is Making Tax Digital being introduced? The government says it wants to make it easier for people and businesses to more easily and efficiently manage their tax responsibilities, while it hopes MTD will prevent basic tax reporting errors that cost the UK many billions a year in lost tax revenue.

Introduction of MTD for ITSA was to start on 6 April 2023, but it’s been delayed for a year until 6 April 2024 in response to COVID-19 and stakeholder groups asking for more time so that businesses and individual taxpayers could better prepare themselves for MTD for ITSA.

Put in very basic terms, Making Tax Digital for Income Tax is simply a new way of using digital solutions to report income and expenses to HMRC every quarter rather than once a year.

Who will be affected by Making Tax Digital for ITSA?

• If you’re a self-employed sole trader or landlord who is registered for Income Tax Self Assessment and you have a gross income of more than £10,000, you’ll need to comply with Making Tax Digital for Income Tax requirements from 6 April 2024.
• Members of ordinary business partnerships who earn more than £10,000 a year must sign up for MTD for ITSA by 6 April 2025.
• You can apply for a MTD for ITSA exemption if it’s not practical for you to use software to keep digital records or submit them to HMRC digitally, for example, because of your age, disability, location (ie poor broadband connection) or another justifiable reason. MTD exemption can also be granted on religious grounds. You’ll need to explain your reasons to HMRC and an alternative solution will be sought.

How will reporting change under MTD for ITSA?

Sole traders, landlords and other Self Assessment taxpayers with taxable income won’t need to submit a Self Assessment tax return each year (unless they choose to report other income from shares, interest, etc, via Self Assessment, although HMRC would prefer you to report all taxable income via MTD for ITSA).

MTD for ITSA requires you to maintain digital records of your taxable income and expenses/costs, update them regularly and send summary figures to HMRC digitally within a month of the end of every quarter.

If you’ll need to report via MTD for ITSA you must use:

• MTD for ITSA-compatible third-party software or
• “bridging software” that allows you to send the necessary information digitally in the right format to HMRC from non-MTD-compatible software, spreadsheets, etc.

At the end of the tax year (5 April), you must submit your “end of period statement” (EOPS) and a final declaration (MTD version of the current self assessment tax return), confirming the accuracy of the figures you’ve submitted, with any accounting adjustments made and any additional earnings reported. HMRC will then send you your tax bill, which you must pay before 31 January in the following tax year. Unjustifiable late submissions or payments will continue to result in penalties.

Should you sign up for MTD for ITSA now?

For some time, some businesses, landlords and accountants have been taking part in a live Making Tax Digital for Income Tax Self Assessment pilot scheme. 

You don’t have to sign up for MTD for ITSA. However, you can sign up voluntarily now for MTD for ITSA and start using the service if you’re:

• a UK resident
• registered for Self Assessment and your returns and payments are up to date a sole trader with income from one business or a landlord who rents out UK property.
• You can’t currently sign up if you also need to report income from other sources (eg share dividends).

Need to know! At this stage, it’s probably best to delay signing up for MTD for ITSA, until at least April 2023.The new system is very much in its infancy, with HMRC taking steps to refine it to iron out any issues and provide a better user experience.

Conclusion

Preparation is key, starting to use digital software now to record income and expenses on a regular basis will get you into the routine before MTD for ITSA comes into effect.

As April 2023 approaches you will then be in a better place to decide what software or bridging software will be best for your circumstance/business.

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GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.

The software submits directly to HMRC and is the solution for the self-employed, sole traders and anyone with income outside of PAYE to file their self-assessment giving hints and tips on savings along the way.

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Recent reports reveal that nearly 90% of people in the UK have noticed a hike in their living costs, with fuel, food and borrowing costs rising. According to the Office for National Statistics (ONS), a quarter of the people surveyed are struggling to make ends meet and pay their bills. Subsequently, around 17% have been forced to take out loans and increase credit card borrowing.

Helen Morrissey, an analyst at the stockbroker Hargreaves Lansdown, said that now, many poorer households were likely “burning through their lockdown savings in a bid to meet their day-to-day living costs while others opt to borrow more to meet their needs.”

With living costs rising so much and many turning to credit cards, it has been argued that tighter rules around credit cards are required to protect credit card users. At The Salary Calculator, we’ll explain:

• What the current rules are
• Why people are calling for reform around credit card rules
• What changes are on the horizon

What are the current rules?

Under the current rules, following EU harmonisation in 2011, the UK uses representative rates of APR, where only 51% of applicants accepted by a credit card provider get the headline rate. Prior to this, 66% of borrowers were given the advertised rate of interest, or “typical” APR.” This change means that 49% of those who borrow may end up being faced with a higher rate.

A new report from consumer advice site MoneySavingExpert (MSE) report found that this can be incredibly harmful to borrowers and pointed out a number of other issues with the current system. Firstly, there is no cap on what a borrower can be charged, with those who fail to receive the advertised rate being presented with any rate. Likewise, MSE revealed that 40% of personal loan applicants and 28% of credit card applicants were offered a higher rate than advertised at least once across the last three years. This, unsurprisingly, was also found to have a “negative impact” on borrowers both financially and emotionally.

The report also highlighted that unless an applicant is approved using a credit card eligibility checker, the only way to find out what rate you’ll get is through an application. This not only means that they may opt for a deal because of a low advertised representative APR and then be left with a much higher rate of interest, but also, due to applications marking your credit file, people will most likely stick with their original choice even if the APR is higher.

Call for credit card reforms as cost of living crisis worsens

The current, ongoing cost of living crisis is detrimentally impacting millions. According to Anna Anthony, UK Financial Services Managing Partner at EY, despite many “already feeling the cost of living squeeze,” it’s only going to get worse with inflation on track to reach a 40-year high. In response to the current climate, with so many already exposed to financial risk, Martin Lewis, founder of MoneySavingExpert, has launched a campaign to put an end to the current credit card rules and has urged the financial regulator to put more safeguarding measures in place for borrowers.

In a statement discussing the issue, Lewis said: “The fact so many people can be charged more than the rate advertised is demoralising and often financially dangerous. Many only find out once they’ve applied, leaving a negative mark against their file, forcing many to accept the higher rate, or making it harder to find a cheaper deal elsewhere.”

Lewis went on to say that the UK should now take advantage of the opportunity Brexit has afforded the country in this area: “For years we’ve railed against this, and now we’ve a golden opportunity for change. We are told there will be a Brexit dividend – well, this change was caused by EU harmonisation, so I’m asking the Government to deliver on this one. Lenders tend to make most of their profits ‘from the tail’ – those people who get charged higher rates – and often they’re the ones with weaker finances. They need protecting.”

Not only did MSE highlight the current issues with the system, but it also made a number of recommendations to improve the situation for borrowers. One of these recommendations is to turn to the old system of typical APRs, where 66% of applicants would be offered the advertised rate, and to implement a cap with regards to the typical and maximum APR.

For greater transparency, MSE has also recommended that firms disclose the “the average proportion of successful applicants who don’t get the advertised APR, and by how much.” Moreover, to help prevent applicants from their credit files being detrimentally affected by checks, MSE recommends ‘soft’ credit searches for credit card and personal loan applications, or, it says, at the very least, prior to application firms should “should communicate prominently the rate range for those not accepted at the advertised rate.”

Change on the horizon?

Chancellor of the Exchequer, Rishi Sunak, is reportedly supporting the reform call by MSE. He commented: “Leaving the EU means we are now able to set our own path on financial services regulation – to ensure our rules act in the interests of UK consumers and respond quickly to our flexible and dynamic markets.

He went on to note the importance of the advertised APRs reflecting the rate the consumer is likely to receive and said that he would request that the FCA “assess the merits of reform in this area”.

The FCA responded: “We are continuing our work to ensure that the credit market works well for borrowers and provides the necessary protections, particularly in light of the cost of living crisis. We welcome MSE’s report and will discuss the findings and recommendations with them and the Treasury.”

According to the OECD England has the most expensive publicly-funded university system in the world. Back in 1998, student tuition fees were £1000 a year, which increased to £3000 in 2006, and then skyrocketed to £9000 in 2012. Alongside this massive hike in tuition fees, since 2012, maintenance grants and NHS bursaries have been abolished, forcing many to take on more debt in the form of loans, rather than benefiting from non-repayable grants.

Student loans come with interest, which is added all the time, and you may have seen recent reports that there are changes coming for student interest rates, which will reach up to 12% in some cases.

Interests and loans can be complicated at the best of times, and circulating reports may have you furrowing your brow, but at The Salary Calculator, we’ll walk you through all the changes and explain:

• What’s going on with student loan interest rates
• How you might be affected
• Whether there are further changes ahead

Student loan interest rates

In England, according to government figures, the average amount of debt a student accumulates from their time studying is £45,000, and with fees and interest so high, few ever fully repay their loans. In fact, this percentage is at 20%

That said, according to the Institute for Fiscal Studies, students who took out a loan after 2012 are in for a “rollercoaster ride”. Interest rates on post-2012 student loans are based on the retail prices index, and after RPI rose in March, most graduates will see interest rates rise from 1.5% to 9%. Higher earners (with an income of £49,130 and above) will be hit the worst, however; the maximum interest rate on their loans will increase from 4.5% to 12% for half a year. 

According to estimates, this increase means that the average graduate with £50,000 debt will incur around £3,000 in interest over six months. The IFS study outlined: ​”That is not only vastly more than average mortgage rates, but also more than many types of unsecured credit,” adding: “Student loan borrowers might legitimately ask why the government is charging them higher interest rates than private lenders are offering.”

Looking ahead, Ben Waltmann, a senior research economist at the IFS, explained that unless the government makes changes to the way student loan interest is determined, there will be “wild swings in the interest rate over the next three years.” He outlined: “The maximum rate will reach an eye-watering level of 12% between September 2022 and February 2023 and a low of around zero between September 2024 and March 2025.”

He said that there is “no good economic reason for this.” Adding: “Interest rates on student loans should be low and stable, reflecting the government’s own cost of borrowing. The government urgently needs to adjust the way the interest rate cap operates to avoid a significant spike in September.”

To learn more about how the changes will specifically affect you, check out the government website, which provides a complete guide to terms and conditions. 

How will this affect you?

According to a Tweet by Michelle Donelan, the Minister of State for Higher Education, this interest rate hike on student loans has “no impact on monthly repayments.” Further to this, she said, “These will not increase for students. Repayments are linked to income, not interest rates.” However, not everyone agrees that the situation is as clear cut as this. 

The IFS’s Waltman explained that while it is true the interest rate on student loans has “no impact” on monthly repayments, it affects “how long those who do pay off their loans before the end of the repayment period have to make repayments and therefore the total amount these students repay over their lifetimes.”

In addition to this, the IFS said that one of the many detrimental effects of the hike could be discouraging students from going to university for fear of mounting financial costs, and with record hikes to the cost of living, this is a valid and reasonable concern. Alongside this, the IFS also said that the change might force some graduates to pay off large sums of debt when it “has no benefit for them”.

Are further changes ahead?

Aside from changes to interest on student loans, the government has announced proposals that will affect loan accessibility, too. In response to the Augar review of post-18 education, in February, the government announced plans to block students who ​​fail to attain English and Maths GCSEs or two A-levels at grade E from qualifying for a student loan.

Experts have warned that these new changes will detrimentally impact students from lower-socio-economic backgrounds the worst and put a “cap on aspiration”. Sir Peter Lampl, founder and executive chair of the Sutton Trust education charity, outlined: “The introduction of any minimum grade requirement is always going to have the biggest impact on the poorest young people, as they are more likely to have lower grades because of the disadvantages they have faced in their schooling.”

The government also outlined that the repayment threshold will be cut from £27,295 to £25,000 for new borrowers beginning courses from September 2023, and further to this; students will now pay off their debt for ten years longer (for 40 years rather than 30 years).

Speaking about the changes and their impact on graduates, Martin Lewis, founder of MoneySavingExpert.com, said: “It’s effectively a lifelong graduate tax for most.” Adding: “Only around a quarter of current [university] leavers are predicted to earn enough to repay in full now. Extending this period means the majority of lower and mid earners will keep paying for many more years, increasing their costs by thousands. Yet the highest earners who would clear [their debt] within the current 30 years won’t be impacted.”