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How long term home working will affect your finances

There’s a chance that many workplaces may never return to the office. Several prominent tech firms have already said that their staff can continue to work from home even after the pandemic and the evidence suggests that a large number of other employers are thinking the same thing.

Essentially, the pandemic accelerated an already established shift in the way we work, so that a few years worth of changes happened overnight.

The Chartered Institute of Personnel and Development recently conducted a survey and found that the proportion of people working regularly from home has risen to 37%, more than double the number from before the pandemic.

What’s more, employers think that the proportion of staff who work permanently from home full time will rise to 22% post-pandemic. In those pre-pandemic, halcyon days, this figure was 9%.

This shift will have financial implications for those home-working. And, as usual, the good comes with the bad. Here are some things you should consider:

It might affect your insurance costs

Back in March, the sudden change to home working will have been unexpected and you might have overlooked the impact it could have on your insurance. However, now the dust is settling, you should mention it to your home insurer. 

Chances are your home will have an extra printer, laptop and tablet, valuables that should be covered by your home insurance policy. Remember that if this kit belongs to your employer, their insurance should protect it. It’s worth double checking before you add anything to your policy.

Lastly, if you’re working from home permanently and no longer using your car to commute, tell your insurer. You may be able to pay less on your premiums.

You can claim tax relief on expenses

On 6 April, Rishi Sunak raised the claim allowance to £6 a week to cover extra household bills caused by working at home. 

When there is a home working arrangement in place, an employer can pay a weekly amount to its employees tax free. If you think that your costs exceed this amount, you should check with your employer to see if they will make higher contributions.

This benefit will only be available if your employer specifically asked you to work from home. If you’re working from home voluntarily, you cannot claim this tax relief on your bills.

It might be harder to secure a pay rise

By now, it’s widely established that working from home needn’t have an adverse effect on the quality of your work. However, there’s still quite a lot of uncertainty around the effects of homeworking on employees’ ability to secure promotions and pay increases.

When working remotely, it can be hard to keep relationships with people in your firm. There’s also a chance that employees who work from home permanently in a company where some staff still work from the office could get sidelined when promotions come up.

Showing the value of your efforts can be more difficult. It seems like good communication is important to avoid being overlooked. Try to communicate any new skills you have learnt and consistently show how your personal development is supporting you to do your job effectively at home.

Sources
https://www.independent.co.uk/money/homeworking-working-home-permanent-tax-income-insurance-bills-commuting-house-prices-a9652661.html

What will the new normal look like?

The Covid-19 outbreak has provoked a crisis of such enormous proportions that things will not just go back to the way they once were. When some semblance of normality emerges, things will be different. We are set for huge social, cultural and economic changes. It’s unlikely that we will suddenly wake up in a world where anxieties around the crisis have vanished into thin air. Rather, a new normality will gradually emerge from its ashes during a transitional period that could last for an extended amount of time. 

As lockdown restrictions are eased, it’s probable that we will enter a phase where life will hang between normality and lockdown. The government may again assert its need to tighten the rules depending on infection rates or the capacity of the health system. The operation of some businesses may be severely restricted and some social distancing rules may remain for some time. In short, we are not going to be able to draw a line in the sand behind coronavirus when the lockdown ends, as much as we may like to.

How the world will look after the outbreak is difficult to call. It depends on many factors, for instance whether or not countries are able to reduce infection rates around the world, and how long it takes scientists to formulate an effective vaccine.

However, there are a few changes that we can infer from what we have already seen during the crisis.

Working culture seems set to change for good. For many, social distancing has seen a complete shift to working from home. Technologies like Zoom and Slack have enabled many to move seamlessly into this way of working. If employees can maintain the same kind of productivity while working from home, there will probably be a large shift towards remote working in the long run. 

The impact of large scale remote working would be huge. London and Manchester would no longer see their daily deluge of commuters from the surrounding area. Experts have hinted that this could change the entire makeup of the country. Rural villages and suburbia could again become a centre of working life. Big city offices may only host a businesses’ core staff and be used occasionally for whole-company events. Flexible office spaces or co-working spaces could become a regular feature in suburbs, towns and villages.

The Covid-19 outbreak also looks set to accelerate the country’s shift to becoming a cashless society. People are being discouraged from using cash as it’s thought that cash can carry the virus, raising the risk of transmission. The crisis may mean that we are increasingly accustomed to using contactless to make transactions and this could continue even after a vaccine is found. 

Sources
https://www.thersa.org/discover/publications-and-articles/matthew-taylor-blog/2020/04/transition-covid-lockdown

https://www.stylist.co.uk/long-reads/life-after-coronavirus-predictions-uk-work-health-relationships-politics-climate-change/372608