The Salary Calculator

What is the ‘Way to Work’ initiative, and how will it affect you?

by Madaline Dunn

At the end of January, the Department for Work and Pensions published its new plan to move “half a million people into jobs by the end of June.” The campaign is called ‘Way to Work’ and supposedly will “support people” back into work “faster than ever before.”

However, as positive as this sounds, the reality of the initiative is very different. Critics of the new campaign have called it “dangerous” and say that it “misses the point.”

So what exactly is the campaign all about and who will be affected by it? At The Salary Calculator, we’ll walk you through:

• What the ‘Way to Work’ initiative is
• Why the government has introduced it
• What the impact of the scheme will be

What is the ‘Way to Work’ initiative 

The Way to Work initiative focuses largely on Universal Credit (UC) claimants who are looking for jobs and will be facilitated at UK Jobcentres by claimants’ Work Coaches. The initiative will see the introduction of new rules whereby claimants will have to expand their job search and apply for job vacancies outside of their preference zone at four weeks of unemployment. Currently, the period at which claimants must expand their search is three months. 

As outlined by Thérèse Coffey, the Work and Pensions Secretary, the drive behind the initiative is to get people into “any job,” rather than a job that fits their skills set, qualifications, or interests. 

Now, under the new initiative, Universal Credit claimants will face tough sanctions if, after four weeks, it is deemed they have failed to make “reasonable efforts” to secure a job or if they turn down any offer. Claimants will ultimately lose part of their universal credit payment.

The amount of Universal Credit benefit claimants receive varies depending on their personal circumstances, but already, the TUC has outlined that it’s not enough to live on, especially in light of rising energy costs and the soaring costs of living. 

Why has the government introduced this initiative?

According to the government, the initiative is a response to the number of job vacancies in the UK, which is now at a ‘record high’ at 1.2 million vacancies, a figure that’s 59% higher than pre-pandemic levels.

Speaking about the motivation behind the initiative, Coffey said: “As we emerge from COVID, we are going to tackle supply challenges and support the continued economic recovery by getting people into work. Our new approach will help claimants get quickly back into the world of work while helping ensure employers get the people they and the economy needs.” 

What will the impact be of the scheme?

Although the UK government argues that this initiative will help to fill vacancies and kickstart the economy, experts argue that the move is doomed to fail, and that coercion into jobs has been proven not to work. Regardless, with over 200,000 new claims per month, many people across the UK will find themselves impacted by this initiative. 

Elizabeth Taylor, CEO of the Employability Services Related Association (ERSA), outlined that a “one-size-fits-all” approach is ineffective, and the initiative, as a whole, is “at odds with the people centered methodologies that employment support providers apply.” Adding: “Individually tailored support which meets personal and local labor market needs must remain front and center of any quality employability provision.”

Taylor, writing in Forbes, says that rather than coercing individuals into jobs they aren’t suited to, providing “quality employment support” and finding ways to get people into the “right job” is not only better for the employer and the employee, but the economy as a whole, too. 

Likewise, Ruth Patrick, a senior lecturer in social policy at the University of York, states that pushing people to apply to any job, “underpinned” by the threat of benefit sanctions, is, in fact, damaging and “corrosive” to relationships between claimants and advisers. Patrick explains that this approach risks pushing people into “insecure and unsuitable employment.”

A review by a University of Glasgow team also found that overall, the kind of sanctions proposed by the UK government has detrimental effects on health and wellbeing, leading to material hardship, unemployment and economic inactivity. Moreover, while in the short term, sanctions can boost employment levels, job quality and stability are negatively affected in the long term. 

According to a statement by the Minister for Employment, Mims Davies MP last week, there are now “positive signs of recovery,” with unemployment “continuing to drop,” however, for the time being, it looks as though the tough sanctions of the new Way to Work initiative are here to stay.

Tags: Economy, Jobs, unemployment, Universal credit

How the budget will affect personal finance

by Madaline Dunn

Chancellor Rishi Sunak recently delivered his “wide-ranging” 2021 Budget, and personal finances will be affected in a number of ways. From the national minimum wage to the price of a pint, millions will see changes to the amount of money in their pockets.

So just what is changing? At The Salary Calculator, we’ll give you the rundown. In this article, we’ll explain:

• What changes are being made to the National Minimum Wage and the Living Wage
• How much money will those who claim Universal Credit take home
• What’s going on with alcohol duty
• How travel costs will change

National Minimum Wage and Living Wage changes

The UK’s National Minimum and Living Wage are set to rise, and these changes will come into effect in the next tax year, in April 2022.

The National Living Wage, which refers to the minimum wage those aged 23 and over can earn an hour, will increase by 6.6% from £8.91 to £9.50 an hour. The National Minimum Wage, meanwhile, will increase from £4.62 to £4.81 for those under the age of 18, and from £6.56 to £6.83 for those aged 18 to 20.

Those aged between 20 and 21 will also benefit from a slight increase, with hourly wages rising from £8.36 to £9.18.

Those working as apprentices will see a small increase in their take-home pay, too, with hourly pay increasing from £4.30 to £4.81.

Although Sunak has said that this increase “ensures “the government is “making work pay” and “keeps us on track to meet our target to end low pay by the end of this parliament.” That said, if you think that this wage increase isn’t enough, you’re not alone.

Bridget Phillipson, the shadow chief secretary to the Treasury, has said that the increase is “underwhelming” and, in fact, works out as “£1,000 a year less than Labour’s existing plans for a minimum wage of at least £10 per hour for people working full-time.”

Adding: “Much of it will be swallowed up by the government’s tax rises, universal credit cuts and failure to get a grip on energy bills.”

Similar sentiments have been expressed by the Institute for Fiscal Studies, which has said that the increase won’t be truly felt due to inflation.

Universal credit take home

Following the government’s cut to the Universal Credit boost, which benefited 5.5 million people, Sunak announced there will be changes to the amount of money claimants take home.

Under the current taper rate, for every £1 earned above a threshold for the benefit, a worker misses out on 63p. This is being cut by 8%, meaning it now rests at 55%, down from 63%.

So, according to the government, that means that Universal Credit claimants will keep more of their payment when they find work or receive an increase in their hours. That said, this change benefits just a third of claimants who are worse off since the £20 cut.

The price of a pint

Considering the increase in living costs, cuts to Universal Credit, and the like, news that alcohol duty is being cut is unlikely to feel as exciting as Rishi Sunak has made it sound. Still, from February 2023, there will be what Sunak calls “the most radical simplification of alcohol duties for 140 years.”

This means a pint at your local will, according to the Treasury, will be 3p less dear. Rose, fruit ciders, ‘lower strength,’ beers and wines and liqueurs will also be cheaper.

This change has been made in part to get more people to go out for drinks rather than staying at home.

Changes to travel costs

While the tax on petrol and diesel remains unchanged for the 12th year, at 57.95p per litre, those looking to set their sights a little further than France or Spain are likely to see flight prices hiked. This is because flights over 5,500 miles will see Air Passenger Duty (APD) rise. This is a levy airlines pay, which passengers fund through the cost of plane tickets.

However, duty on domestic flights from April 2023 will be lower, meaning it’s likely that it will be cheaper to fly across the UK.

Tags: Alcohol Duty, Economy, national minimum wage, savings, Travel, Universal credit

Changes to Universal Credit and how to access alternative financial assistance

by Madaline Dunn

As part of the government’s Covid-19 support plan, back in 2020, it introduced a £20 boost to those receiving Universal Credit. However, this financial intervention was only temporary and officially ended on 6 October 2021, despite a considerable amount of backlash from across the board.

Of course, the announcement of the scheme’s end is not good news for many, and it’s understandable to be concerned about how this will affect you and your family financially. After all, the cut means that around six million unemployed and low-paid workers will face a £1,040 cut to their yearly incomes.

Speaking about what the cuts will mean for many families, Morgan Wild, Head of Policy at Citizens Advice, said: “More than half a million people have come to Citizens Advice for support with Universal Credit since the pandemic. We know the extra £20 a week has often meant the difference between empty cupboards and food on the table.”

That said, there are a number of different forms of alternative financial assistance that can help support you in this difficult and turbulent time.

At The Salary Calculator, we’ll guide you through some of the different types of financial assistance available, including:

• Help with essential costs
• A reduction in council tax
• Assistance with paying rent
• Free prescriptions
• How to check what financial aid you’re eligible for

Essential costs

If you and your family are finding it hard to keep up with the cost of essentials, whether that’s food or clothes, you can reach out to your local council and ask if you’re eligible for a hardship fund. To find out what your local council is and reach out for more information, head over here.

Equally, for those struggling to pay for food costs, you can try food bank vouchers. To access these vouchers, you can ask an organisation that’s supporting you, whether that’s a charity, school or Citizen’s advice, for a referral.

If you have children who are attending school and you receive governmental financial support, they might be eligible for free school meals.

Those who receive the following are eligible:

• Income Support
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Support under Part VI of the Immigration and Asylum Act 1999
• The guaranteed element of Pension Credit
• Child Tax Credit (provided you’re not also entitled to Working Tax Credit and have an annual gross income of no more than £16,190)
• Working Tax Credit run-on
• Universal Credit

For more information, visit the government website.

Reducing council tax

If you’re finding it hard to make ends meet following the Universal Credit cut, you can apply to have your council tax bill reduced. In some cases, applicants can get their bill reduced by 100%, but this will be determined by a number of different factors, including where you live, your circumstances and income and whether you have other adults or children living with you.

Help with paying rent

Rent is getting more and more expensive all the time, and with the added financial strain caused by the Universal Credit cut, it can be really difficult to find enough money to pay for life’s expenses. To help with this, you can apply for a Discretionary Housing Payment (DHP) through your local council.

To be eligible for this, you must already claim housing benefit or the housing element of Universal Credit.

Prescriptions

Little costs add up, and prescriptions for medication can sometimes end up costing you a bomb. Luckily, if you are a receiver of any of the following, you may be entitled to free prescriptions:

• Income Support
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Pension Credit Guarantee Credit
• Universal Credit

If you’re not too sure whether you’re eligible, you can double-check with the NHS’s eligibility checker.

How to check what you’re entitled to

It’s not always clear what financial assistance you are entitled to, but a great way to keep up-to-date and ensure that you don’t miss out is to carry out a benefit check. You can do this by using an online benefits calculator or by reaching out to your local Citizen’s Advice Office.

Tags: coronavirus, Financial assistance, unemployment, Universal credit