The Salary Calculator

Over on our sister site LoanTutor, there is a new tool and a new article trying to explain what an offset mortgage is and how it could help you save money. With an offset mortgage, you use your savings to effectively cancel out some of your mortgage balance, which reduces the interest your lender charges you. You can use this to either reduce your monthly payments, or keep your payments the same and pay off your mortgage quicker.

If you would like to learn more, have a read of the offset mortgage article, or to see how much you might be able to save try out the offset mortgage calculator.

For the past couple of weeks, I’ve been trialling a new design for the many options that are available on The Salary Calculator. Some of you may have already seen this new design as part of the trial. Today, I have rolled out this new options design to all visitors, so you will all now see the options laid out in a new manner, which I hope you will find easier to use.

As more and more options have been added to the calculator, like Tax Codes, Pensions, Childcare Vouchers and Overtime, I felt that the old interface was getting more and more complicated. Since most of the options available were not required for simple salary calculations, it seemed that all the options on display might be confusing for people who just wanted a simple calculation. However, I know from the feedback I get that many visitors find the advanced options very useful when performing their calculations. To try to make the calculator less daunting, while still making advanced options available to those that want to use them, I have replaced the old design (where all options were displayed at once) with a tabbed interface that lets you choose the options you want to edit without spending time on those that are not relevant. Some mandatory or simple options are outside the additional options, as is the choice of tax year.

To see the new design, check out The Salary Calculator. Please let me know what you think in the comments below – did you find this design easier to use?

The Salary Calculator has been updated to support the latest changes to student loan repayments which will take effect for some tax payers next April. For students who start their courses this autumn, the way that deductions will be calculated when they enter the workplace will be different from the deductions applied to students of previous years.

Students whose courses started before 1st September 2012 (including those of you who have completed your course and have even started repaying) will see no change, and will repay the loan with deductions of 9% of your salary which is over a threshold of £15,795 per year. This is as before, but it is now called “Plan 1”. If your course started after 1st September 2012 and you are resident in England or Wales, you will repay under “Plan 2”. Plan 2 repayments are also made at a rate of 9%, but only on salary over a threshold of £21,000 per year. This means that deductions will be lower, and repayment of the loan will take longer. Of course, most students who started their course this autumn will not be expecting to enter employment for a few years, and deductions are only made from the April after you finish your course. However, if your course is short or this will apply to you when you graduate and you would like to see how it will affect your take home pay, The Salary Calculator will show you if you tick the “Plan 2” box. Check out The Salary Calculator to see what your Student Loan deductions will be.

It is in fact possible to have a loan under Plan 1 and a loan under Plan 2 – for example, if you have studied on more than one course. In this case, the deduction from your salary is still just at 9% (over the Plan 1 threshold of £15,795), but the repayment is split between your two loans. Deductions due to salary between £15,795 and £21,000 go towards repaying the Plan 1 loan. Any deductions from salary over £21,000 go towards repaying your Plan 2 loan.

Plan 2 loans also have a different interest rates charged from Plan 1 loans, which at the moment are higher than Plan 1 interest rates. This, coupled with the lower monthly repayments made under Plan 2, means that students with Plan 2 loans will spend more time (and more money!) repaying their loans. Our sister site Loan Tutor has a student loan repayment tool which will allow you to estimate how long it will take you to repay your student loan given your salary, outstanding loan amount and repayment method (i.e. whether your course started after 1st September 2012 or not).

For more information about student loan repayment, see the Student Loan Repayment website.

The Office of Fair Trading (OFT) has this week issued a call for information on the prices that consumers are paying at the pumps for petrol and diesel. They intend to investigate a number of things, notably whether there is sufficient competition between suppliers to lower prices, and whether or not a fall in the price of crude oil is reflected by lower prices for consumers at the pumps.

This last question is a bit of a hot topic for many petrol users as they feel that although oil prices are not at their peak, petrol is more expensive than ever. This great chart from Whatgas compares the price of petrol in green with the underlying cost of crude oil in blue:

As you can see, although the price of petrol does follow the cost of oil, it seems that there is a much larger gap between the oil cost and the price at the pumps since the oil price dropped in the middle of 2009. As the people at Whatgas say, some of this is due to currency fluctuations (oil is traded in US dollars, not pounds Sterling) and increases in fuel duty. The OFT will be investigating whether the whole discrepancy can be accounted for through “legitimate” reasons, or if they believe petrol companies are behaving unfairly and fixing the price higher than clean competition would suggest. The OFT expect to publish their findings in January 2013.

As a final thought, the BBC’s article about this investigation includes this interesting chart showing how the total price for each litre breaks down:

A new sister site to The Salary Calculator has been launched to provide information about loans and loan repayment.

Loan Tutor contains details about different loan types, such as mortgages, unsecured loans, debt consolidation loans and student loans. As well as a suite of tools for calculating loan repayment costs, there are also hints and tips and links to further information about borrowing money.

There will also be articles with suggestions of how you can save money with loans, including the first of these which explains how to avoid overpaying your student loan. Other articles and tools are planned for the future, including car loans, offset mortgages and credit cards.