How long term home working will affect your finances
There’s a chance that many workers may never return to 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.
Also, 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. If you’re an employee you can find out more and how to claim here. But if you’re a director and/or complete a self assessment tax return you’re likely to have to put the claim through when you submit your tax return.
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.
If you’d like to know more about how your career choices affect your financial future, please get in touch. We’d be more than happy to help.