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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. 

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.

Saving into a pension can help safeguard your future; the state pension is just £203.85 per week, and the cost of living is only increasing. However, the cost of living is also making it more difficult than ever to save into a pension, and increasingly the research shows that people are unable to afford to do so and are cutting back on contributions in order to afford the basics.

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

• What the data shows about people not being able to afford pensions
• The percentage of self-employed people that don’t pay into a pension
• How much is it recommended that you save into a pension?
• What the consequences of not saving into a pension are
• Where to go for advice and guidance

More and more people can’t afford to pay into a pension

According to a survey commissioned by insurer Aviva Life and Pensions Ireland, the cost of living crisis, and energy crisis are negatively impacting people’s ability to take sustainable action in their personal lives, despite a desire to do so. For example, the research found that four in ten people aged between 55 and 65 would like to hold some investments, this includes pensions.

However, while nearly 90% are eligible (over 22 and earning over £10,000 per annum) for the automatic pension enrolment scheme, more people are either stopping or reducing their workplace and personal pension contributions.

The number of people doing so reportedly increased by almost a third between March and July 2022.

Some proposed solutions to help counteract this have included increasing the amount that employers pay in under the scheme from 3% to 6%, allowing workers to supplement their disposable income. Others have suggested that employers opt to continue contributions while workers take a “temporary contribution holiday.”

What percentage of self-employed people don’t pay into a pension

While there’s an increasing number of people reducing or stopping their pension contributions when it comes to the self-employed population, which makes up 4.39 million workers, only 16% save into a private pension.

Further to this, as the number of self-employed people has risen, the number contributing to a private pension has fallen. It makes sense then, that a recent report from the Office for National Statistics (ONS) found that there’s a significant difference in the average pension wealth between employed and self-employed, with the latter, more likely to report not being able to afford to pay into a pension.

Further, the Institute for Fiscal Studies found that, for those self-employed workers that do pay into a pension, most rarely increase their contributions, even as their income rises. Indeed, nearly half kept their contribution at the same level for two years, and for those who had saved into a pension for nine years, one in five never increased their contributions. The average contribution is just £600 per year.

How much is it recommended that you save?

When it comes to saving into your pension, there are a lot of numbers thrown around, some advisors suggest that you contribute as much as ten times your average working-life salary by the time you retire. Others suggest that you aim for the ’50-70′ rule, which means you end up with an annual income that is between 50 and 70 per cent of your working income.

Elsewhere, it’s recommended that if you’re 30 years old, 15% of your salary should be pension contributions; further some advise that by your mid-thirties, you need to have twice your annual salary saved into your pension pot.

Of course, for many, this isn’t a feasible option, and many people have more immediate priorities to think about. Speaking about this to The Independent, Rebecca Aldridge, managing director of Balance: Wealth Planning, said that focusing solely on building up a pension pot “ignores the reality of life” for most people under the age of 35.

Indeed, it overlooks high levels of debt, and the expenses associated with raising children and childcare, for those who have them.

“Most worryingly in my view, most have little in accessible savings, making them incredibly vulnerable if they are made redundant, can’t work due to illness, want to take longer parental leave or so on. A healthy pension fund won’t help with any of those,” she said.

Instead, Aldridge recommends building a strong foundation by saving a little each month, enough to work toward paying off debt, and building up a savings fund of six months. After this, she explains, it makes sense to put money into “a mixture of other savings pots.”

What are the consequences of stopping paying into a pension?

More and more people are feeling less confident in their ability to afford retirement, according to research from Hargreaves Lansdown. In fact, 39 per cent feel this way, up from one-third a year prior. And the cost of living crisis is compounding the issue.

Speaking about this, Hargreaves Lansdown senior pensions and retirement analyst, Helen Morrisey, said that the real shift has come from people who were “unsure if they had enough to retire” who now seem to know they “definitely don’t” as their costs rise and their investments “took a pounding.” Further, she said that while the younger you are, the better your chances of boosting your pension contribution, for those coming up to retirement age, “the prospects look bleak.” This, she said, is why more and more people who have retired are returning to work.

“Many believed they had enough set aside to see them through retirement, but the enormous hike in the costs of essentials such as fuel and food is making many revisit their plans. Though we expect inflation to start falling this year, it is likely to remain a squeeze on peoples’ plans for the foreseeable future.”

However, many finance experts advise that while it might feel tempting to pause your pension contributions, so you can divert that money elsewhere, it could come back to bite you in the long run. Not only will you miss out on your employer matching your contribution, you’ll also no longer benefit from the tax relief the government pays on those contributions. Even pausing for a period of two years could see tens of thousands of pounds wiped from your pension pot, depending on salary and contribution.

Where should I go if I’m seeking advice?

Considering the long-term consequences of cutting back on contributions, it’s a good idea to speak with a financial adviser who can give you a deeper understanding of how it might affect you later on, alternatives and ways in which you can mitigate the effects of reducing your contributions.

Some sources which can help and point you in the right direction include:

• Unbiased 
• Money Helper
• Citizens Advice 

As the cost of living crisis drags on, nearly 200,000 low-earners have been hit with HMRC penalties for failing to file their tax returns. This high figure is a reminder of the scale of confusion that surrounds Self Assessment.

At The Salary Calculator, we’ll walk you through the key information, to help safeguard you against being hit with tax-related fines. Below, we’ll explore and explain:

• How many penalties were issued and why,
• The rules around Self Assessment,
• HMRC’s response and upcoming changes

HMRC issues hundreds of thousands of penalties to low earners

Recent figures have revealed that between 2018 and 2022, HMRC handed out 660,000 fines to earners who didn’t owe any tax. Eleven million people are required to submit a Self Assessment income tax return to document their other sources of income or past income. Missing the submission deadline on 31 January, means people are automatically hit with a £100 penalty.

For the 2020-21 financial year, 184,000 people were fined for failing to complete a Self Assessment tax form by this deadline. These 184,000 taxpayers were paid less than £12,500 a year, meaning they were not subject to income tax. A total of 58000 of the 184,000 low earners who were fined were successful in their appeal, bringing down the total to 126,000.

Thinktank Tax Policy Associates (TPA) obtained the data following a FOI request, and found that 92,000 people among the lowest-paid 10% of the population were fined by HMRC in 2020-2021, while just 39,000 of the highest-paid 10% received fines.

Speaking about this, Dan Neidle, a tax campaigner and founder of TPA, said: “We believe the law and HMRC practice should change. Nobody filing late should be required to pay a penalty that exceeds the tax they owe.”

“People are falling into debt and, in one case we’re aware of, becoming homeless as a result of HMRC penalties. Advisers working with low-income taxpayers see this kind of situation all the time, and filing appeals for late-payment penalties often makes up a significant amount of their work.”

What are the rules and penalty charges?

So, what are the rules around Self Assessment that you need to adhere to in order to avoid being hit with penalties?

If, in the last tax year, any of the following applied, you must file a tax return:

• You were self-employed as a ‘sole trader’ and earned over £1,000 (prior to deducting anything you can claim tax relief on)
• You are a partner in a partnership business;
• You are a minister of religion;
• You are a trustee or the executor of an estate.

There are some other circumstances where you might also need to file a Self Assessment Tax Return. You can find out more about that here.

It is important that you register with HMRC for Self Assessment by 5 October, following the end of the tax year in which the income or gains first arose. If you fail to do this, you may be subject to penalties. This deadline is extended to 31 October for paper returns.

Other key dates include 31 January, which is the deadline for both submitting your online tax return and paying the tax that you owe.

The second payment on account is due 31 July 2023, and by January, if you still owe HMRC tax following your payment on account, you’ll need to pay a balancing payment.

If you miss the submission deadline, you will be hit with an automatic £100 automatic late-filing penalty.

If you fail to pay this for three months, the penalty can begin to increase by £10 each day, up to a maximum of £900 for 90 days.

At six months, a flat £300 additional penalty can be applied, or 5% of the tax due, whichever is higher, and if after 12 months you’ve not paid, you can incur another £300 penalty.

What was HMRC’s response and are there incoming changes?

Following a wave of criticism, an HMRC spokesperson released the following statement: “The government has recognised that taxpayers who occasionally miss the filing deadline should not face financial penalties, and has already announced reform of the system.”

So what reforms are set to be introduced? From 2026 onwards, the current standard £100 fine for late filing of Self Assessment tax returns will change to a points-based system.

According to HMRC, this will mean that those who make an occasional mistake won’t be hit with big fines straight away. Instead, those who miss the filing deadlines will be given a point, and a financial penalty will only be charged to them when a set number of points is reached.

The Government policy paper outlines that taxpayers will receive a point every time they miss a submission deadline, and HMRC will notify them when they receive a point.

When they reach a particular threshold of points, determined by how often they’re required to submit, a financial penalty of £200 will be charged, and they will be notified.

These thresholds are as follows:

• Annual – 2 points
• Quarterly (including MTD for ITSA) – 4 points
• Monthly – 5 points

As per these new rules, another £200 penalty will be issued for every subsequent late submission, but the taxpayer’s points total will not increase.

However, despite calls to reform the system further, the spokesperson said deadlines for returns are “necessary for the efficient functioning of the tax system,” adding: “We strongly encourage anyone who does not need to file a return to tell HMRC.”

“Our aim is to support all taxpayers, regardless of income, to get their tax right, and details of what to do if a person no longer needs to file a return are included in reminder letters every year.”

There are also further upcoming changes to Self Assessment, too. From April 2026, those who file Self Assessment reports each year and are self-employed, with annual gross income of over £50,000, will have to comply with the government’s new Making Tax Digital (MTD) for Income Tax rules. As per these rules, these taxpayers will have to keep records in a digital format, using specific accounting software packages or apps or maintain spreadsheets for recording business transactions.

Further, instead of a yearly report, people will be required to submit quarterly updates to HMRC. The deadlines for this will be as follows:

• 6 April to 5 July
• 6 July to 5 October
• 6 October to 5 January
• 6 January to 5 April

In addition to the quarterly returns, this will conclude with submitting an ‘end-of-period statement’ to confirm the final taxable profit for the accounting period.

From April 2027, those who file a Self Assessment tax return and are self employed, with an annual gross income of between £30,000 and £50,000 will be required to do the same.

Crypto is in a constant state of flux. In 2022 we witnessed the infamous crypto-crash, it’s now in the midst of regulatory changes, and two of the biggest crypto companies are currently facing lawsuits. With so much confusion and incoming crackdowns, it makes sense that you might be having questions about what’s happening and how the crypto landscape is changing.

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

• How the current crypto market is faring,
• Legislative changes and regulated crypto activity
• What’s happening with Britcoin
• How to stay as safe as possible when trading

How is crypto faring?

There are currently 23,171 cryptocurrency projects in the crypto market amounting to £954 billion, with the leading three being Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). The former is the original cryptocurrency and the world’s largest, with a 1 Bitcoin worth £24,019.77, up from £18,929 in August last year. However, as highlighted, despite this, the crash saw it fall from its all-time high of £69,000 the year prior to this much lower figure.

Ethereum, similarly, has fallen meteorically; last year in May, the cryptocurrency fell over 20 per cent in 24 hours – at the end of June, it was worth £1,481, with a market cap of £178.1 billion.

Tether, meanwhile, lost USD 20 billion in 2022, but according to the latest reports, it has now recovered this, surpassing USD 83.2 billion in market capitalisation.

However, for the most part, trust has not been restored in crypto, and experts say that the road to recovery will be long. Indeed, considering the continued volatility of the currency, experts say that if you choose to invest in crypto, keep investment minimal and only weigh in money that you can afford to lose. It’s likely last year you will have seen stories of investors losing their entire life savings after betting on crypto – and it’s important to remember that even the most tech-savvy individuals are at risk of losing money, because the market is extremely speculative.

Legislative changes regulating activity and risk

There have been lots of regulatory shifts related to crypto in recent years, and just recently, the UK parliament moved one step further to recognising crypto as a regulated activity in the UK, voting the Financial Services and Markets Bill (FSMB) through to the House of Lords (HoL).

The legislation contains provisions to:

• Include stablecoins under the country’s payments rules,
• Include crypto as a regulated activity, and
• Supervise crypto promotions.

According to reports, new regulations could be introduced within 12 months.

Further to this, the FCA has also introduced new rules for marketing cryptoassets, whereby financial promotions on cryptoassets will only be permitted if they are “made or approved” by a firm with certain status with the FCA2. Further, if a firm promotes crypto, it must have clear risk warnings so that adverts are “clear, fair and not misleading.

There were a huge amount of hacks on crypto in 2022, whereby hackers stole a record $3.8 billion worth of cryptocurrency globally last year; 2022 was subsequently identified as the biggest ever year for hacking. And, indeed, this should be a warning to consumers who should be aware that crypto is still an environmental that comes with serious risk.

Speaking about the potential risk that consumers expose themselves to when dealing with crypto, Sheldon Mills, Executive Director, Consumers and Competition, said: “It is up to people to decide whether they buy crypto. But research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice.”

Further, Mills said that consumers should “still be aware” that crypto remains largely unregulated and high risk, and that those who invest should be prepared to “lose all their money.”

Interestingly, despite this ongoing warning, last year, the FCA found that almost one in 10 people surveyed owned cryptocurrencies in 2022.

Further, the International Monetary Fund (IMF) has even recently gone back on its advice that countries should ban crypto, and is now saying that outright bans “may not be effective in the long run.”

Is Britcoin advancing?

There’s been a lot of hype around Britcoin; some have said it will bring legitimacy to crypto, while others have criticised the proposal to introduce the digital currency, claiming that it will be detrimental to the UK economy and people’s privacy.

The House of Lords Economic Affairs Committee, for example, found that the introduction would see “a lot of risk” with “very little” reward. Further, it outlined that if Britcoin allowed anonymous transactions, it would be open to the same kind of criminal risks as the current cryptocurrencies, but if it introduced potential ‘safeguards ‘against this, privacy would be at risk. Indeed, a centralised digital pound would mean that all spending would be recorded.

Regardless of the criticisms, it appears that Britcoin is pushing ahead and projections are that it could arrive by the end of the decade. Indeed, Project Rosalind, a joint trial run by The Bank for International Settlements and the Bank of England, was trialling the best way an Application Programming Interface (API) could be implemented in central bank digital currency (CBDC) for retail transactions. This trial recently concluded, with it reportedly showing the potential CBDCs have for introducing “programmability” to money and it looks like things will be progressing further.

Things to bear in mind when trading

While it’s important to enter trading with the knowledge that it is inherently risky, some of the following tips can help you trade a little more safely and is advise that should always apply to cryptotrading.

1.) Research is always your friend. Whether you’re looking for a cryptocurrency exchange to trade on or deciding which cryptocurrency you’ll proceed with – you need to research in depth. Make sure to choose an exchange with high-security features. Likewise, with cryptocurrency itself, review reputation, risk and track record.

2.) As outlined above, crypto is prone to being hacked, so you need to keep your money secure. One of the best ways to do this is to use a crypto wallet. Here, either get a digital wallet on your computer’s hard drive or a physical hardware wallet. This is also key for ensuring you don’t misplace your crypto – as many as 1 in 5 Bitcoins have been misplaced.

3.) Get serious about security. Say goodbye to easy-to-guess passwords and use a password manager to help you store your highly-secure passwords.