MAJOR changes still to come this year could affect your finances – from Universal Credit payments to coronavirus help.
Even your household bills could change, but we’ve rounded up what’s happening and when, so you can plan ahead and protect your cash.
But there’s still plenty happening between now and December and these are the dates ahead you should make a note of – plus some tips on how you can prepare.
Furlough changes again
The furlough scheme has been helping out millions of people unable to work because of the coronavirus pandemic since last year.
As the country opens up again the government is winding the scheme down.
Can I be made redundant if I’m on furlough?
EVEN though furlough is designed to keep workers employed, unfortunately it doesn’t protect you from being made redundant.
But it doesn’t affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.
Your employer should still carry out a fair redundancy process.
You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you’ve been working somewhere for at least two years.
How much you’re entitled to depends on your age and length of service, although this is capped at 20 years. You’ll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
Sadly, you won’t be entitled to a payout if you’ve been working for your employer for fewer than two years.
There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.
If you’re made redundant after your company has gone into administration you can claim redundancy pay via Gov.uk.
The coronavirus job retention scheme (as it’s officially known, or CJRS for short) gives workers 80% of their current salary for hours not worked, up to a maximum of £2,500.
That was covered entirely by the government until July 1, when its contribution dropped to 70% and employers started covering 10%.
From August that will change again, and employers will have to put in 20% and the government contribution will drop again to 60%.
Anyone furloughed will still get the same amount (80% of their salary up to £2,500).
Some companies are also topping up wages to 100%, but they don’t have to.
If you get this top up, it’s worth checking if your employer will continue paying the extra.
There have been fears that furloughed staff could be made redundant as struggling businesses might not be able to pick up the extra costs.
If you’re worried about your job, you can check out your rights in the box above.
Universal Credit change – minimum income floor returns
The government is planning to reintroduce the Universal Credit minimum income floor in August, ending a benefits boost for workers.
It was temporarily removed in March 2020 as part of the emergency coronavirus budget.
Since the minimum income floor was suspended, those earning less than the minimum wage have been receiving extra benefits.
But it will return as the government rolls back Covid-related financial support.
The minimum income floor is an amount used to calculate your Universal Credit payments if you’re self employed.
Its return could cut the amount you get in Universal Credit, so keep an eye on your payments from then if you work for yourself.
After the wind down of furlough in August, the scheme will come to and end completely at the end of September.
Furlough had been due to end on October 31 last year but has been extended a number of times since then because of the ongoing pandemic.
Chancellor Rishi Sunak announced in his Budget in March that furlough will finish at the end of September.
It’s hoped that anyone who couldn’t work because of coronavirus will be able to return by then.
The economy has improved since the depths of lockdowns too, with shortages of hospitality staff and lorry drivers and vacancies returning.
Universal Credit – £20 boost ends
Universal Credit claimants across the country were handed a £20 a week boost because of coronavirus.
The much-needed support worth £1,040 a year will finish by the end of September.
Despite pressure to keep the uplift, including by former ministers of the Department for Work and Pensions (DWP), the government has not extended the payment beyond September.
What to do if you have problems claiming Universal Credit
IF you’re experiencing trouble applying for your Universal Credit, or the payments just don’t cover costs, here are your options:
- Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it’s a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
- Alternative Payment Arrangements – If you’re falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you’re part of a couple.
- Budgeting Advance – You may be able to get help from the Government for emergency household costs of up to £348 if you’re single, £464 if you’re part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You’ll have to repay the advance through your regular Universal Credit payments. You’ll still have to repay the loan, even if you stop claiming for Universal Credit.
- Cut your Council Tax – You might be able to get a discount on your Council Tax by applying for a Council Tax Reduction. Alternatively, you might be entitled to Discretionary Housing Payments to help cover your rent.
- Foodbanks – If you’re really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.
Letters will start going out to Universal Credit claimants in the coming weeks reminding them that it will end.
This could leave anyone who gets UC short from September, so you may need to adjust your household budget.
The last payment that includes this £20 extra will depend on when you normally get Universal Credit, but from October onwards you won’t get it.
Keep an eye out and check in with the job centre or DWP if you want to know the last payment date that will include the extra cash.
If you’re struggling or worried about bills when it ends, or before, you can get free and friendly advice from charities like Citizens Advice, Turn2Us and Stepchange.
We’ve also rounded up the extra money you could be missing out on if you claim Universal Credit – and it could add up to more than £1,000.
Stamp duty returns to normal
Stamp duty will return to pre-Covid normal from October.
A holiday on the property tax was introduced last year to get the housing market moving again during the pandemic.
The threshold for paying the tax when buying a home was set at £500,000, so buyers could save big bucks.
The tax break changed on July 1 as the support winds down, reducing the threshold at which tax is due to £250,000.
That will reduce again at the end of September, returning it back to normal.
That means stamp duty will be due when buying a property worth £125,000 – unless you’re a first-time buyer.
Anyone jumping on the property ladder for the first time will still pay no tax on homes under £300,000, and will pay less on those under £500,000 compared to other buyers.
You can check out The Sun’s “My First Home” series where we speak to first-time buyers about tips for saving money on a house purchase if you missed out on stamp duty savings.
What is stamp duty?
STAMP duty land tax (SDLT) is a lump sum payment anyone buying a property or piece of land over a certain price has to pay.
Up until July 8 2020, most house-buyers in England and Northern Ireland had to pay stamp duty on properties over £125,000.
This was temporarily increased to £500,000 until March 31, 2021 in the government’s mini-Budget in July 2020.
The Chancellor extended the help until September 2021 in his Spring Budget.
The holiday has now been reduced to £250,000 as of the beginning of July 2021.
The rate a buyer has to fork out varies depending on the price and type of property.
Rates are different depending on whether it is residential, a second home or buy-to-let, or whether you’re a first-time buyer.
The usual system in England for residential properties means:
- First-time buyers pay nothing on properties below £300,000 (and relief available on properties of up to £500,000)
- You pay nothing if the property costs below £125,000
- You pay 2% if it is worth between £125,001 and £250,000
- You pay 5% if between £250,001 and up to £925,000
- You pay 10% if it is between £925,001 and £1.5million
- You pay 12% on anything over £1.5million
For second homes or buy to let properties:
- 3% on purchases up to 125,000
- 5% on purchases between £125,001 and £250,000
- 8% on purchases above £250,001 and £925,000
- 13% on purchases above £925,001 and £1.5 million
- 15% on purchases above £1.5 million
Energy bills rise
Energy prices are capped, so the average household should never pay more than that for gas and electric bills.
The current energy price cap is set at £1,138, but the amount can go up or down over time to keep up with changes in the energy market.
It’s set in April and October according to the regulator Ofgem.
The next change will come this October then, but we don’t know by how much it will rise (or fall) by.
A rise is expected though, because wholesale energy costs have gone up, and Martin Lewis has urged bill payers to switch now to lock in good deals.
The price cap last went up by £96 in April hitting 15 million customers.
Mr Lewis has said the latest spike in prices happening now could push up this price cap by between £50 and £100 in October.