A common debate among homeowners is whether it’s cheaper to leave the heating on all day at a low temperature or to use a timer to control your heating system. Let’s break down the facts to help you make the most energy-efficient choice for your home.

The Myth of Constant Heating

Some people believe that keeping the heating on at a low level throughout the day will save money by avoiding the need to reheat a cold home. However, this is a myth. Homes naturally lose heat over time, especially if they are not well-insulated. Keeping the heating on all day means your system works constantly to maintain a set temperature, leading to increased energy consumption and higher heating bills. Let's not get into the second law of thermodynamics ( we're not Professor Brian Cox). However, in very, very simple terms, according to the second law of thermodynamics, heat energy naturally flows from hotter areas to cooler ones until everything reaches the same temperature.

Timers Are More Efficient

Using a programmable timer or smart thermostat like Hive allows you to heat your home only when necessary. For example, you can set the heating to come on in the morning before you wake up and in the evening before you return home. This ensures energy is used efficiently, as the heating system only operates when it’s needed. Modern boilers and smart thermostats are designed to heat your home quickly, so there’s no need to keep the heating on throughout the day to maintain comfort.

Insulation Is Key to Savings

Whether you use a timer or leave the heating on, insulation plays a critical role in saving energy. Properly insulating your home—through draught-proofing doors, windows, and lofts—prevents heat loss and helps your heating system work more efficiently. Good insulation reduces the amount of energy required to maintain your home’s temperature, further lowering your heating costs.

Conclusion

In most cases, using a timer is the more cost-effective and energy-efficient option. By heating your home only when needed, you reduce unnecessary energy use. Pairing a timer with proper insulation and a modern heating system will help you lower your winter heating bills and keep your home warm without waste.

Proper home insulation is one of the most effective ways to reduce energy costs, improve comfort, and lower your carbon footprint. With winter heating bills rising, keeping your home well-insulated ensures the heat stays inside, reducing the energy you need to use. This guide explains the best areas to insulate, typical home insulation costs, and potential cost savings.

Loft Insulation

Loft insulation is one of the most cost-effective ways to stop heat loss through the roof.

- Cost: £300 to £500 for professional installation (for an average semi-detached home).
- DIY cost: Around £100 to £150 for materials.
- Savings: Up to £355 per year for a detached house and £150 per year for a semi-detached house.
- Payback time: Around 1 to 2 years.

Wall Insulation

Up to 35% of heat loss can occur through walls, so insulating cavity or solid walls is essential.

- Cavity Wall Insulation:
Cost: £450 to £1,000, depending on the size of the home. Government schemes may provide financial assistance to help with the cost.
- Savings: Up to £295 per year for a detached house and £180 per year for a semi-detached home.
- Payback time: 3 to 5 years.

- Solid Wall Insulation:
- Cost: £8,000 to £15,000.
- Savings: Up to £570 per year for a detached house.
- Payback time: 10 to 15 years.

Floor Insulation

Insulating floors, especially in older homes, can help cut draughts and prevent heat loss through the ground.

- Cost: £800 to £1,200 for suspended timber floors.
- Savings: Up to £130 per year for a detached house.
- Payback time: 6 to 8 years.

Draught-proofing

Draught-proofing is an inexpensive way to reduce heat loss by sealing gaps in windows, doors, and loft hatches.

- Cost: £100 to £200 for professional draught-proofing, or £50 for DIY kits.
- Savings: Up to £125 per year.
- Payback time: Less than 1 year.

Double Glazing

Replacing single-glazed windows with double-glazing reduces heat loss and improves home insulation.

- Cost: £3,000 to £7,000 for an average home.
- Savings: Up to £235 per year for a detached house and £105 for a flat.
- Payback time: 10 to 15 years.

Pipe and Water Tank Insulation

Insulating hot water pipes and tanks helps retain heat, reducing energy waste.

- Cost: £15 to £30 for DIY pipe insulation; £50 to £150 for professional installation.
- Savings: Around £50 to £100 per year.
- Payback time: Less than 2 years.

Roof Insulation (Flat Roof)

Flat roofs can be insulated to improve energy efficiency and reduce heating bills.

- Cost: £1,000 to £2,500 depending on the roof size.
- Savings: Up to £200 per year for a detached house.
- Payback time: 5 to 10 years.

Hot Water Cylinder Jackets

Adding a jacket to an uninsulated hot water cylinder reduces heat loss and lowers energy consumption.

- Cost: £15-£25 for a cylinder jacket.
- Savings: Up to £70 per year.
- Payback time: Less than 1 year.

Total Cost Savings Potential

By insulating various parts of your home, you can achieve significant savings on your energy bills. For a typical detached house, adding loft insulation, wall insulation, and draught-proofing could save up to £1,300 annually, cutting energy costs while improving comfort.

The verdict

Proper insulation is one of the best ways to lower your heating costs, increase comfort, and reduce your home's carbon footprint. Start with easy and cost-effective upgrades like loft insulation, draught-proofing, and pipe insulation, and then consider long-term investments like wall insulation and double glazing. By investing in home insulation, you’ll not only save money but also contribute to the UK's carbon reduction goals. Home insulation is just one of the ways you can save money and help the environment. See our recent article on switching to an EV for more ideas.

As energy prices rise across the UK and winter fuel payments end for many pensioners, many homeowners are faced with a crucial decision: should they rely on electric heaters or central heating to keep their homes warm? This article explores the pros and cons of both options to help keep you informed and save money this winter. So, which is more cost-effective for your home? Electric Heaters vs. Central Heating: let the battle begin.

Cost Efficiency

For heating an entire home, central heating is usually the most cost-effective option in the UK. Gas-powered central heating systems are designed to heat multiple rooms efficiently. With a programmable thermostat, you can control the overall temperature and ensure your home stays warm for less money. According to the Energy Saving Trust, gas central heating can be up to four times cheaper than electric heating for whole-home warmth.

Electric heaters, while cheaper to buy upfront, can become costly to run over time due to their high electricity consumption. This is particularly true when using multiple units to heat a large area. However, for heating one room or small spaces for short periods, electric heaters can be a more budget-friendly option.Energy Usage

Modern central heating systems, especially energy-efficient gas boilers, spread heat evenly through radiators or underfloor heating. Gas is typically cheaper per unit of energy than electricity, meaning central heating is a more cost-effective way to heat large spaces.

Electric heaters run on electricity, which is more expensive per unit. While they provide quick, focused heat, using them to warm larger areas or for long durations can significantly raise your energy bill. Spot heating—warming just one or two rooms—can be a practical use of electric heaters, but central heating is generally better for long-term and whole-home warmth.

Flexibility and Convenience

Electric heaters are more flexible because they are portable and can be used to heat specific rooms as needed. This makes them ideal for small flats or for individuals who spend most of their time in one area of the home. They are easy to set up, require no installation, and are perfect for short-term heating needs.

Central heating is more convenient for whole-home heating. With a programmable thermostat, you can set the heating to match your daily schedule, heating the house only when needed. Central heating can also be tailored with zoning systems, allowing for different temperatures in specific areas of the house, improving overall energy efficiency.

Safety Considerations

Central heating systems are installed by professionals and are designed with safety features to prevent issues like gas leaks or fires. Once installed, they require minimal interaction, reducing the risk of accidents.

Electric heaters, while convenient, can pose higher safety risks. They can overheat or cause fires if not used properly, especially when left unattended or placed near flammable materials. It’s important to use electric heaters with caution and follow manufacturer guidelines.

Related: 7 Simple ways you can make money now

The Verdict

When deciding between electric heaters and central heating, it largely depends on the size of your home, your budget, and your heating needs. For whole-home heating, central heating systems are typically the more economical and environmentally friendly choice. However, electric heaters can be a viable option for short-term or spot heating. If you want to reduce your winter heating bills, consider pairing your heating system with proper insulation and energy-saving measures.

Saving for a house deposit might seem daunting, but with proper planning, discipline, and the right strategies, you can reach your goal within 2 years. Whether you’re a first-time buyer or planning for your next property, following these tips will help you achieve your target faster and save for a house deposit in 2 years.

Set a Clear Savings Goal

Before you begin saving, you need to know how much you should save for a house deposit. Most buyers require between 5-20% of the property’s value for a deposit. For example, if you’re aiming to buy a £200,000 property, you’ll need a deposit between £10,000 and £40,000. Breaking this down into monthly targets will help you understand how much you need to save to reach your deposit goal in two years. It’s worth knowing that the average property price for the UK in October 2024 is £293,000, although there is significant regional variation. You’d need a deposit between £14,650 and £58,600 based on the average house price above.

Create a Detailed Budget

One of the best ways to save efficiently is by creating a budget that tracks your income and expenses. Budgeting Apps like Monzo, YNAB, or Emma can help you see exactly where your money goes and identify areas where you can cut back. A well-structured budget will ensure that you stay on track toward your savings target. Budgeting for a house deposit is essential, as it allows you to prioritize savings over unnecessary spending.

Open a Dedicated Savings Account

To maximize your savings, consider opening a high-interest savings account or a Lifetime ISA (LISA) if you’re a first-time buyer. A LISA offers a 25% government bonus (up to £1,000 annually), which can significantly boost your deposit savings. You can put in up to £4,000 each year until you’re 50. You must make your first payment into your ISA before you’re 40; otherwise, you’ll miss out.
Keeping your savings in a dedicated account will reduce the temptation to dip into it for other expenses. Obviously, there are conditions attached to a LISA, such as it must be used to buy your first house, and the £4000 does count towards your annual ISA allowance of £20000.

Cut Unnecessary Expenses

Cutting down on unnecessary expenses is crucial to hit your savings goal. Consider reducing discretionary spending on things like dining out, entertainment, gym memberships or subscriptions you rarely use, and never go to a supermarket without a shopping list. If you have Netflix, Prime, Apple TV and Disney +, do you need them all? Redirect the money saved into your house deposit savings fund. Even small sacrifices like cutting back on daily Starbucks can accumulate over time; ditching a fancy coffee a day can save approximately £1600 per year!

Boost Your Income

If cutting expenses alone doesn’t get you where you need to be, consider ways to boost your income. Picking up a side hustle like freelance work, tutoring, or driving for Uber can help you save faster. Alternatively, asking for a raise at your current job or exploring a new job opportunity can significantly accelerate your progress toward your deposit goal.

Explore Government Schemes

First-time buyers can benefit from government support, for example, in England, the First Homes Scheme, which, if you’re a first-time buyer, you may be able to buy a home for 30% to 50% less than its market value. Obviously, there are conditions such as the home must be your only or main residence, and you do need a mortgage offer for at least half the price of the home – tap into the bank of Mum and Dad, perhaps? Although you can no longer apply for a Help to Buy Equity Loan for properties in England, you can still apply for a similar scheme in Wales. This scheme offers equity Mortgages to buyers of new-build homes.

Automate Your Savings

Setting up automatic transfers to your savings account is a great way to stay consistent. Automating your savings allows you to transfer a set amount of money every month without thinking about it. This ensures that your deposit grows steadily, and you are more likely to stay on track with your savings goals. Many digital banking apps, such as Revolut and Monzo, also offer the facility to put your spare change from purchases directly into a savings account. This is a great way of building up a pot of cash without even thinking about it.

Avoid Debt and Build Credit

While you’re saving for a deposit, it’s important to avoid taking on new debt that could affect your mortgage application. Focus on building your credit score by paying off existing debts and making sure all bills are paid on time. A strong credit score will help you secure better mortgage rates when you’re ready to buy. Another thing to consider is that mortgage lenders will carry out affordability checks when you apply for a mortgage, so if you are spending £500 a month on a shiny new car, they will consider that when deciding how much you can afford to pay each month.

Track Progress and Stay Motivated – Avoid temptation

Saving for a house deposit can feel like a long journey, but by regularly tracking your progress, you’ll stay motivated. Break your total savings goal into smaller milestones, and celebrate when you achieve them - frugally! Keeping your eye on the bigger goal of homeownership can help you stay focused throughout the process. While you may not want to live like monks and never go out, you may want to think about giving your high-spending friends a bit of a wide birth if they are constantly eating out – the peer pressure could prove too much and before you know it you’ve spent £100 on a meal. According to the ONS ( Office for National Statistics), the average household spends around £1278 per year eating out – not including alcohol.

Bonus Tip: Stay Updated with Property Market Trends

As you save, keep an eye on UK property market trends and mortgage interest rates. Also, sites like Zoopla provide a lot of information on market trends. Being aware of market shifts and interest rate changes will help you make informed decisions when the time comes to buy.

Investing Strategies for Your 20s 

Investing in your 20s can seem daunting, but it's one of the best ways to build wealth for the future. The earlier you start investing, the more time your money has to grow. If you are interested in beginner investing then you will need to take a look as these effective strategies you can start using to make your financial planning easier. This will help you understand how to start investing, it's never too late to start but the earlier you can, the better so you can maximize your return.  

Here are 7 effective investment strategies tailored for your 20s.

The Importance of Retirement Planning 

Retirement planning is crucial for your financial stability in your later years, as you will have to sustain your lifestyle without a regular income. If you must rely on the state pension, this can lead to a challenging financial situation. By beginning your retirement planning as early as you can, you are giving yourself the best chance later on.  

Learn more about state pension.

Find out below how much you should have already saved for retirement based on your age group and what strategies you can put in place today to keep up!

Overview of Average Savings for Retirement 

In the UK, many individuals struggle to save adequately for retirement. The average retirement savings can vary significantly based on factors such as income level and age. Generally, it’s recommended that individuals aim to save at least 15% of their salary annually to achieve a comfortable retirement. However, many fall short, often relying on state pensions, which may not provide sufficient income to maintain their desired standard of living. 

Impact of Age on Savings Strategies 

Age plays a vital role in shaping retirement savings strategies. If you can start putting money away for retirement as you begin to enter full-time work, you will be able save much more. The amount you save each year can also increase as you earn more overtime and are able to manage your finances. As people begin approaching retirement age, their risk tolerance also decreases meaning that the return can often be limited.  

If you are thinking about beginning your retirement planning, no matter your age, it is never too late to start, get saving now and live your best life during retirement! 

Statistics on Average Savings by Age Group 

In the UK, average pension pots vary significantly across different age groups. Use this as your guide so you know what to aim for. Despite this being what others similar to you might have saved, the amount you need to save for retirement is a lot more! 

As of recent data: 

Under 30s: The average pension pot is approximately £8,000. Many in this age group are just starting their careers and may not be prioritising pension contributions. 

Ages 30-39: The average rises to about £32,000. Individuals often begin to focus more on savings as their careers progress. 

Ages 40-49: The average pension pot increases to around £77,000, reflecting a growing emphasis on retirement planning. 

Ages 50-59: The average jumps to approximately £125,000, as many are actively preparing for retirement. 

60 and over: The average pension pot for this group stands at about £190,000, though this can vary widely depending on individual circumstances and retirement plans. 

You can also find out the average savings based on age so you can find out if you are on track.

Factors influencing average retirement savings: 

Income Levels: Higher earners typically save more, contributing to larger pension pots. Conversely, lower-income individuals often find it challenging to save adequately. This is true for private pension pots as well as workplace pensions as your salary will decide how much is put into your pension pot. 

Lifestyle Choices: Personal spending habits can significantly affect how much individuals are able to save. Those who prioritise long-term financial security may allocate more towards their pensions. 

Employment History: Career stability and job changes can impact savings. Individuals with consistent employment often have more opportunities for pension contributions, while those with gaps in employment may struggle to build adequate savings. 

Financial Literacy: Understanding the importance of retirement savings and investment options plays a crucial role. Individuals who are more informed about pensions tend to save more effectively. This is why learning effective ways to save for retirement is so important. The more you know, the more you can help yourself. 

Importance of Having a Personalised Savings Target 

Having a personalised savings target is essential for effective retirement planning. It allows individuals to set realistic goals based on their unique circumstances, including income, lifestyle aspirations, and retirement age.  

Having a tailored approach will help you assess how much you need to have saves to achieve your desired retirement outcome.  

Find effective ways to save for retirement.

How Much Money Do You Need to Retire at Age 60? 

When you are planning your retirement funds it can be effective to determine your potential expenses. This way you will know what you are saving for. During your retirement it is expected to spend about 70-80% of your pre-retirement income annually. 

For the minimum retirement living standard from reports from 2019 is £10,900 for a single person and £16,700 for a couple according to Standard Life. Since 2019 this would have increased around £700 and £1000 respectively. 

For a comfortable lifestyle during retirement which includes several luxuries such as, holidays and financial freedom will cost on average £33,600 for a single person. This would be £49,700 for a couple which would have increased since 2019 by an estimate of £2,200. 

The key expenses include; 

1. Housing Costs: This can include mortgage payments, property taxes, and maintenance. On average, retirees may allocate around £12,000–£15,000 per year for housing. The amount spent on this will depend on location and type of property. 

1. Healthcare Expenses: As individuals age, healthcare costs typically increase. Estimates suggest retirees might spend around £3,000–£5,000 annually on health-related expenses. 

1. Living Expenses: Daily living costs—such as groceries, utilities, and transportation—can average around £10,000 per year. 

1. Leisure and Travel: Many retirees save for leisure activities and travel, with average annual spending in this area often reaching £5,000–£10,000. 

1. Emergency Fund: Setting aside an emergency fund of £1,000–£2,000 is recommended to cover unexpected costs. 

Overall, a retiree at 60 may need approximately £25,000–£40,000 annually to maintain a comfortable lifestyle, depending on individual circumstances. 

Savings strategies by age group 

In Your 20s: Start Early 

By starting early you can maximise the power of compound interest. Use our compound interest calculator to see how it works.

Aim to save 10-15% of your income. Consider contributing to a pension scheme, such as a Workplace Pension, where employers often match contributions. A Stocks and Shares ISA is also a great option for tax-efficient savings and investments. What is an ISA?

Tips for Budgeting and Saving Effectively 

Create a budget to monitor your spending and identify savings opportunities. You can use budgeting apps to help you. 

In Your 30s: Building Momentum

As your income rises, increase your savings contributions. Strive for 15-20% of your income to go towards retirement savings, taking full advantage of any employer matching in your pension.

Start diversifying your investments by including a mix of equities and bonds in your pension or ISA. This balance can help manage risk while maximising potential returns.

• Prioritise high-interest debts, such as credit cards, and pay them off as quickly as possible.

• Consider consolidating debts to lower interest rates and make repayments more manageable while continuing to save.

In Your 40s: Catching Up

Reevaluate your retirement goals and assess whether your savings are on track. Adjust your strategy as needed based on lifestyle changes, income, or shifts in retirement plans. 

If possible, increase your pension contributions to the maximum allowed. Taking advantage of tax relief can significantly boost your retirement savings. 

• Consider side hustles or freelance work to generate extra income.

• Look into real estate investments, such as buy-to-let properties, to enhance your financial portfolio.

In Your 50s: Preparing for Retirement

Now is the time to boost your savings. Aim to save 20-25% of your income if possible, focusing on your pension and other investment vehicles. 

Evaluate your current spending and identify areas where you can cut back. This will allow you to redirect funds into your retirement savings in these crucial years. 

Common Retirement Planning Mistakes to Avoid 

Planning for the long-term -  People often underestimate the length of time they need to save for in retirement. Planning for a longer retirement can help ensure you don’t outlive your savings. 

Planning for Inflation and Unexpected Costs - Consider how inflation will affect your retirement savings. If you are just starting to save then by the time you need your retirement funds it will be worth less due to inflation. Additionally, you will need to prepare for any unexpected expense during retirement such as, home repairs.  

Importance of Regularly Reviewing and Adjusting Plans 

Life circumstances change, so regularly review your retirement plan. Adjust your savings strategy as needed to stay on track towards your goals. 

Adapting to Life Changes 

Be prepared to adapt your savings plans in response to job changes, family dynamics, or health issues, ensuring that your retirement strategy remains aligned with your current situation. 

• Limit discretionary spending on non-essentials and focus on building your emergency fund. 
• Automate savings by setting up direct debits to your savings or investment accounts. 

Have you got enough money put away for retirement based on the statistics above? Leave a comment below

In your 20s, setting solid financial goals can lay the groundwork for long-term financial success. A little time spent planning can help you avoid a lot of money woes both now and in the future. So, what are the 5 financial mistakes to avoid in your 20s? Read on.

How to Avoid Financial Mistakes in Your 20s

Mistake 1  - Not Having an Emergency Fund – How Much Money Should You Save by 30?

One of the biggest financial mistakes is not having savings to fall back on. Aim to have 3-6 months of living expenses saved to protect yourself from unexpected costs.

Having an emergency fund is key to financial planning and the minimum you should aim for in terms of savings. Think about having 3-6 months’ worth of living expenses to cover you if you change jobs, get made redundant, or have a hefty bill to pay.

Set a monthly savings goal and ask: How much money should I have saved by 30? Well, if you’re wondering, the average for the UK is around £3748.

If you’d like to see how you stack up and compare to other people, your age in terms of savings, check out our Average savings article based on Age. If you can create a savings pot now in your 20s, you’ll form the habit for life, which is great news as life has a way of throwing curve balls at you.

Mistake 2 – Making Minimum Payments Only – How to Pay Off Debt in Your 20s

Paying only the minimum on credit cards or loans increases the amount of interest you’ll pay. In your 20s, focus on paying more than the minimum to reduce debt faster and save on interest.

Credit cards have notoriously high interest rates when you flip over to their standard rate, and managing debt effectively is crucial. Your debt can build up quickly, especially if you use it for big purchases. If you are not good at keeping track of this and not good at managing credit card debt and switching your card to a new lower rate, then pay off the debt as soon as you can and ideally always more than the minimum payment. Student loans are another source of debt, and while they have much lower rates than standard credit card rates, you should look to pay them off as soon as you can to avoid long-term interest payments.

Mistake 3: Neglecting Investments – Start Investing in Your 20s to Grow Wealth

Starting to invest early is key to growing wealth. Learn how the power of compound interest can help your money grow exponentially when you invest in your 20s.

So, what is the best way to start investing in your 20s? That’s easy to answer – just start, but start now; the sooner, the better. If you haven’t heard of compound interest and how powerful it can be to make money over time, then check out our article on compound interest and the compound interest calculator. Simply put, the sooner you start investing and saving, the better; this is a huge advantage of being in your 20s compared to someone in their 30s or 40s. There are lots of low-risk options on how to save money in your 20s, whether it’s a high-interest saving account with your bank or investing in an ETF such as the FTSE100 ( the hundred biggest UK companies bunched together, so your risk is diversified). How much should you invest?– well, if you can invest 10% of your income a month, it’s a great start. But if you can only invest £10 a month, this is also a great start – just be sure to increase it over time, such as when you get a pay rise.

Mistake 4 – Not Using a Budget – Budgeting Tips for Your 20s

Budgeting is essential to keep track of your income and expenses. Set up a budget and stick to it to avoid debt and save more money each month.

Learning how to budget in your 20s is another key life skill. Get into the habit of budgeting your monthly/weekly income. There are lots of budgeting apps to help you do this. Or go old school and put physical money away – the envelope system. Don’t get to the end of the month and go into your overdraft – this is bad news and difficult to get out of because of the high interest your bank will charge. Think about an amount for supermarket shopping, going out, hobbies, bills, rent, etc. Budgeting in your 20s can be tough with so much stuff to tempt you, but remain laser-focused and reap the rewards.

Mistake 5 – Ignoring Debt – How to Build a Good Credit Score in Your 20s

Ignoring debt can damage your credit score. Instead, tackle it head-on by setting up a repayment plan and working with creditors to manage what you owe.

Learning how to pay off debt in your 20s can be a real game-changer and can set you up for life. If you do get into debt, then deal with it head-on. Call your bank or credit provider and agree on terms to pay it back, they are more understanding than you might think and don’t forget, if you are struggling to manage your debt, there are plenty of official Government resources that can help

www.gov.uk/options-for-dealing-with-your-debts 

or Citizens Advice - www.citizensadvice.org.uk

You may ask yourself – How Can I improve my credit score? There are several ways of doing this – You can start by taking manageable and affordable credit like a credit card or a small bank loan and then paying the credit owed on time each month and ideally paying the credit off in full and start the process again. Other more surprising ways to improve your credit score are not moving home too often – trying to stay in one place for more than 3 years, and lastly, make sure you are on the electoral register www.gov.uk/register-to-vote

Improving your credit score is critical in your 20s and beyond. So, what is a good credit score? Well, according to Experian, is between 881 and 960. One example of why a good credit score is important is when you come to get a mortgage – a person with a bad credit score will always be charged more interest by the lender than someone with a good credit score. Companies like Experian offer free credit score checks if you’re wondering.

What financial mistakes did you make in your 20s, or what advice would you give to someone just starting out? Share your thoughts in the comments below!

Shock Fall - September inflation data

Inflation has fallen below the 2% target for the first time in more than three years in a shock fall announced today at 7am. The 1.7% rate for September marks the lowest level since April 2021, when it was recorded at 1.5%. This represents a decrease from August's 2.2%. While analysts anticipated a decline, they expected it to only reach 1.9%. Looking ahead, inflation is likely to rise again when we receive the October data in a month, primarily due to increasing energy prices.

Although CPI services inflation is expected to continue its gradual decline, they project CPI inflation will rise to 2.8% by December and reach 3% by next September. While this may sound somewhat pessimistic, it's important to remember that inflation peaked at 11.1% in October 2022 during the peak of the cost of living crisis. The recent drop to what is considered "normal" levels is setting the stage for potential interest rate cuts. The next decision regarding rates is scheduled for November 7, with analysts predicting a reduction from 5% to 4.75%.

Main points - UK Inflation Falls Below 2% Target

• Producer input prices fell by 2.3% in the year to September 2024, down from a revised decrease of 1.0% in the year to August.
• Producer output (factory gate) prices fell by 0.7% in the year to September 2024, down from a revised increase of 0.3% in the year to August.
• On a monthly basis, producer input prices fell by 1.0%, while output (factory gate) prices fell by 0.5% in September 2024.
• Services producer prices rose by 3.3% in the year to Quarter 3 (July to Sept) 2024, up from a revised increase of 3.2% in the year to Quarter 2 (Apr to June).

What was behind the drop?

Why does inflation impact interest rates?

Inflation has a significant effect on interest rates for several reasons. The Bank of England often increases interest rates to curb spending and promote saving. This strategy typically leads to a decrease in prices and inflation. As inflation decreases, interest rates usually follow suit.

Markets were already pricing a 80% likelihood of an interest rate cut before the announcement, and it seems almost certain that interest rates will decrease at the upcoming meeting, which is great news for consumers. The next decision on rates is set for November 7, with analysts predicting a drop from 5% to 4.75%.

Potential winners and losers from high inflation

There are both potential beneficiaries and those who may suffer from high inflation. In general, a high and unpredictable inflation rate is seen as harmful to the economy, but some individuals might find advantages in it. Workers who have strong bargaining power, such as those in robust trade unions, may benefit as they can negotiate for higher wages to protect their earnings. Producers might also gain if their prices increase faster than their production costs.

Additionally, individuals holding stocks or real estate could see their asset values rise during prolonged periods of inflation. On the other hand, retirees living on fixed incomes are likely to struggle, as inflation diminishes the real value of their pensions and savings. The most vulnerable members of society will also be hit hardest, facing higher costs for borrowing, food, and essential utilities.

Average personal savings based on your age

Related: The average savings based on your age

What is Statutory sick pay? 

Statutory sick pay (SSP) is a legal requirement in the UK which employers must adhere to, it provides financial support to employees when they are unable to work due to illness. If employees are off work for 4 consecutive days, employers must comply with SSP. 

 So what is statutory sick pay and how much is it?

What is the purpose of SSP? 

SSP is crucial to employees as it provides financial security and prevents job loss during illness. Employees will still receive the minimum level of income available whilst they are away sick, meaning they won’t have to worry about their finances or force themselves into the workforce.  

Complying with SSP also creates a healthier workplace for staff where they can reduce the spread of illness and be assured, they have the freedom to recover. This contributes to a more productive and longer-lasting workforce in the long term.  

What is the amount of Statutory sick pay?

If you working then you should know what Statutory sick pay you are entitled to and ensure that your workplace is adhering to their legal obligations.

You will be paid for all the working days you are off sick, except the first 3 working days which are counted as the waiting period. This is the amount of SSP you are entitled to in the UK.

If you are eligible, you can be paid £166.75 a week SSP for up to 28 weeks of the year. 

You will be paid by your employer through the same system as your normal weekly or monthly pay. If you have multiple jobs, you may get SSP from each one.  

SSP eligibility  

SSP is available to those working in the UK under a signed contract. Employees are eligible for 28 weeks of SSP, if you have used this amount already, you will not be provided extra.  

You must be ill for at least 3 days or more, this does include non-working days.  

You must inform your employer within their set time or within 7 days if there is no set regulation on this.  

You could be asked to provide an appropriate fit note to show proof of illness. This can include a printed or digital note from the GP, registered nurse, physiotherapist, occupational therapist or pharmacists.  

What if my employer is not providing SSP? 

As an employee, you are protected by law and employers who fail to meet SSP obligations could face penalties. If your employer is not providing Statutory Sick Pay and you believe you are entitled to it, then there are steps you can take.  

First, take a look at the criteria again to confirm you are eligible for SSP, then raise the issue with your employer to ask for an explanation. If they do not resolve this themselves then you can contact HMRC for assisstance. They will investigate the situation and if your employer is in breach of their legal obligations HMRC will help you get the SSP you are owed. 

SSP VS. Company sick pay 

While SSP can provide the minimum level of financial support for those unable to work due to illness, some employers will offer a more generous alternative, company sick pay.  

SSP is regulated by the government and there is a set amount which has to be paid to the employee if the criteria is met. However, company sick pay is a benefit offered by the individual business. This will usually cover the employee’s full salary or a higher percentage of their wages for a longer period than the SSP. The employee could receive their full salary for the first 2 weeks of illness, followed by a reduced percentage for any weeks after. 

This should be outlined in your work contract as company sick pay is an optional scheme set up by the employee.  

Recent updates to SSP 

There are changes to statutory sick pay. The BBC have reported that stronger protection for employees surrounding sick pay will be coming into action. There have been calls over the past year to increase the current SSP rate as costs of living increase. This would better support those workers living in periods of sickness without financial support. This would also include those working on a zero-hour contract as the criteria stipulates you must earn at least £123 per week.  

The government is working to improve standards including workers being entitled to SSP from their first day of sickness rather than waiting until the 4th. Additionally, they are aiming to increase the SSP rate dependent on salary. 

Ministers have said that these changes to statutory sick pay would benefit around nine million workers who have been with their current employer for less than two years.  

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Want to Apply for free school meals?

Free School meals are provided to students during the school day to make sure all children can access healthy food to sustain them in their education. For many parents, the rising cost of living is making it extremely difficult to provide everything needed and that’s why free school meals are there.  

The National Institute of health reports the correlation between healthy eating and academic success, attendance, and behaviour. This is why if you need help then make sure to check if you are eligible. 
Free breakfast clubs are on the horizon too as Labour pledge to start implementing this initiative from 2025. Families will be able to save up to £2000 when they can enroll their children in free breakfast clubs at school. You can read more about the Free Breakfast clubs initiative here.  

Who is eligible for Free School Meals? 

Free School Meals are available to children in full-time education in primary or secondary school in the UK. A child can obtain these meals if their family is receiving certain benefits, meets an income threshold or they are receiving asylum support. 

Your child is protected from losing their free school meals and will have access to the service until the end of their education period in Primary or Secondary school. 

Income threshold – Families who receive no public funding, which means no benefits and can work but have a lower income could be eligible for free school meals for their children. 

£22,700 for families outside of London with 1 child 

£26,300 for families outside of London with 2 or more children 

£31,200 for families within London with 1 child 

£34,800 for families within London with 2 or more children 

Additionally, the family cannot have more than £16,000 in savings or investments. 

Benefits eligibility - If you are receiving certain benefits your child could be eligible for free school meals; 

• Universal Credit, if you have an annual net earned income of less that £7,400. This will be assessed from up to 3 of your recent assessment periods. 

• 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 – paid for four weeks after you stop qualifying for Working Tax Credit 

Asylum support 

If you are receiving Home Office asylum support, your children may be eligible for free school meals. This benefit makes sure that children in families seeking asylum have access to nutritious meals during the school day. To confirm eligibility, you should check with your local authorities, this includes the council or local education department, or directly contact your child’s school. They will be able to provide information on the application process and guide you through any documentation required. Having access to free school meals can be crucial for asylum-seeking families in reducing financial strain while ensuring children are well-nourished for learning.

How do I apply? 

You can apply online through your local council’s website; you will have to wait until your child has a confirmed space in a school in that area. If you tell the local council that you qualify for free school meals, then your child’s school will be given extra funding to ensure this service can be carried out. You can include multiple children in one application and you won't have to inform the school yourself, the council should notify them.

Necessary documentation -

You will first need to create an account, if you don't already have one on your council's website. You will then be asked to fill out a form to apply for free school meals. They will ask for personal information such as, your address, the address of the school your child is enrolled in, bank statements as well as proof of benefits. This will be necessary so that the authorities can check you meet the criteria before they can accept.

During the application process you will be required to provide your national insurance number as one of the necessary documentation. This is used to verify your eligibility, making sure that the application meets the criteria set. Make sure to have this document ready when completing the application to avoid delays.

3 Benefits of Free School Meals 

The Nutritional impact -

There are so many advantages for children having healthy meals and this includes their academic success and focus. The World Health Organisation revealed that eating healthy from an early age can help to prevent complications later on. Eating the right food also have an impact on brain function which means your child can get more out of their education. 

Financial Relief for Families -

The cost of living has impacted how parents can provide for their children with many families deciding between food, water and electricity each week. By having free school meals parents can know their child is getting a healthy meal every day and they don’t have to budget this into each day. 

Social Inclusion 

Free school meals helps to promote inclusion within the school environment by allowing all students have access to the same food options. This can help those students to sit with their peers at meal times and reduce the stigma often associated with poverty. This sense of equality and belonging can improve children's self-esteem and contribute positively to their emotional well-being, enhancing their overall school experience. 

Common Questions 

Do I have to reapply every year? 

No, you will not have to reapply each year, your child should receive free school meals until the end of their education period, when they leave the school. You may have to inform the school and council if your situation changes. 

Will the School be notified? 

Yes, once you have submitted your application and it has been accepted by the council, they will notify the school. 

Do all schools offer free meals? 

All state funded schools will offer free school meals for those who qualify. From 2025 certain schools will start implementing free breakfast clubs too. 

Free School Meals During School Closures or Summer 

Food Vouchers - 

If your child is eligible for free school meals, then your school will often hand out food vouchers. This depends on whether your council is funding this service, so check on the website or ask the school. This scheme began during COVID but some regions are still offering this. 

HAF - 

The holidays and food program are funded by the government so those who are eligible to get free school meals during term time can also receive support during school holidays. This access includes free meals, enriching activities, and nutritional education during the summer and other school holidays. 

Take action! 

Take action today by checking your eligibility as your child could get nutritious meals at school for free. Even if you are unsure whether you qualify it can be worth checking as it could provide significant financial savings for your family. Don’t miss out on this opportunity to essential fuel children need each day.  

Contact your local authority or your child’s school to explore the options available to you. 

Free School Breakfasts in the UK: How Much Can Parents Save? 

The Labour party promised in their manifesto to introduce free breakfast clubs in primary schools. Now, its time to see if they will keep to their promises. This could alleviate a substantial financial burden on parents and families in the UK.  

For many parents, the daily struggle of balancing work, childcare, and school schedules adds both stress and expense. A free breakfast program could reduce these pressures, particularly for those already paying for school breakfasts or before-school care. 

What Can I Save with a Free Breakfast Club? 

Parents who currently pay for school breakfasts can expect to save around £400 per year when they receive access to the free clubs.

These savings are based on the typical costs that parents pay for breakfast services in schools, which often range from £1.50 to £2.50 per day.  

For families who currently rely on childcare before school, the potential savings are even greater. The savings could be as high as £2000 per year as the need for early morning childcare could be eliminated.  

The free breakfast initiative is particularly beneficial for parents of children with disabilities. A study by Pro Bono Economics found that couples with a disabled child earn, on average, £274 less per week compared to those without. This reduced income often means parents face added financial challenges, so the introduction of free breakfasts could provide meaningful assistance by reducing both food and childcare expenses. 

When Can I Expect to Have Free Breakfast Clubs? 

Labour has committed to investing £315 million in breakfast clubs by the 2028-29 school year, meaning parents can expect to see these changes rolled out in the coming years. 

The Chancellor has now announced that up to 750 schools with primary aged students will be invited to take part in a £7million breakfast club pilot.

This funding will allow those schools to run free breakfast clubs for pupils in the summer of 2025. Given the scale of the investment and the need for proper infrastructure, a phased rollout is likely, which means parents might see the gradual introduction of free breakfast clubs in some areas before the national launch. 

Will Free Breakfasts Include Schools for Disabled Children? 

One of the main questions parents are asking is whether this free breakfast scheme will cover all schools, including those catering to children with disabilities. Labour’s commitment to inclusivity in education suggests that the free breakfast initiative will extend to special education needs (SEN) schools. Given that parents of disabled children face higher costs across the board—including additional childcare and schooling expenses—the inclusion of these schools would be critical in alleviating financial pressures for these families. 

We are still waiting for confirmation that this initiative will also be launched in SEN schools. 

Free School Breakfasts—A Lifeline for Parents 

Parents and families are waiting for this initiative to begin as rising costs of childcare and school-related expenses make it more challenging. Although the full rollout is slated for 2028-29, parents can look forward to this much-needed support in the coming years. By easing the financial strain on working families and ensuring that all children start their day with a healthy meal, this policy promises to make a meaningful difference in the lives of many UK families. 

Let us know below if you are waiting for the roll out of free school breakfasts....