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What are the financial impacts of working from home?

Many people have been working at home during 2020 and 2021 due to the coronavirus pandemic. There are many potential advantages and disadvantages of working at home depending on your occupation, household circumstances and individual working style. But what are the costs associated with working from home?

The financial impacts of coronavirus

These are difficult financial times for many, with many people unemployed, furloughed, or working reduced working hours due to covid-19. We are yet to see what the potential long-term impacts of coronavirus on the economy may be. Companies within some industries such as service industries may have had to furlough their entire workforce due to not being able to operate during coronavirus. These situations can have a huge financial impact on workers, but covid-19 may also have impacted you financially even if you have kept your job and are working at home.

Many people may find themselves needing help with managing existing debts or needing to borrow extra money now. If you need some assistance finding a suitable debt solution for you, you can contact Consolidation Express via the form directly below to receive a confidential call from an experienced advisor.

The rise of working from home

During the coronavirus pandemic, many people who have always worked in the office or other physical location have become remote workers due to necessity. Remote working from the home office, team catch ups via video call, and flexible working have all been utilised by some companies where it’s not been possible for employees to work in the office due to covid-19. Some companies may have found that the risk assessments to consider the return to the office indicated that it was not worth the risk and employees should continue working at home.

When considering whether you should be working at home, Unison has published advice on worker’s rights, whether you should be working at home, and whether you are entitled to be paid by your employer while you’re at home.

Some of the benefits of working from home

The most obvious benefit of working from home during the coronavirus pandemic is for those who are shielding or those who do not need to be in the office to reduce their risk of catching covid-19 by staying at home when possible.

Some of the other potential benefits of working from home are:

  • Avoiding the daily commute – many people spend a lot of money and time on their commute. Removing the commute may allow employees to save more money and spend their extra time working or doing other things;

  • The company may save money – some companies could reduce some of their overheads by having employees work at home, for example the cost of the electricity and other office costs;

  • Fewer distractions – this depends on your household circumstances but for those who enjoy working in a quiet, distraction-free space, working at home where you live alone or with a quiet household can be beneficial for your productivity;

  • Wear whatever you want – many people no longer need to dress up in office clothes for the office now they are working from home, which may mean that workers are more comfortable and could be spending less money on new clothes for the office than they usually would.

The impacts of working from home

There are some challenges to navigate when working from home. Firstly, some people just prefer working with other colleagues and experiencing the buzz of a busy office. Others may have been experiencing problems with having enough space in their home, sharing a home office with a partner or other family members, or have to juggle home schooling and childcare with their working day.

Some workers may have found the experience of working at home beneficial for their work life balance, with some people aiming to find the most lucrative work at home jobs following the pandemic rather than return to the office. On the other hand, other people may find that their work life balance has been impacted by coronavirus which may affect their mental health. According to Acas, employees working from home in the UK are still covered by the law on working hours. Having said this, some employees may find themselves working more hours than they usually would, whether this is due to being at home more in general and not having other social commitments due to the UK government’s guidance to stay at home, or for other reasons, such as if their company is asking for more from its employees to counteract working from home or loss of profits.

The NHS recommends using approaches such as sticking to a routine, setting up a dedicated work space or home office if you can, taking regular breaks and setting boundaries with your family or household members.

What does working from home cost?

There can be extra costs involved with remote working due to requirements for working at home. Creating a home office is not free – many people may have had to upgrade their laptops, purchase office equipment that they may not have needed before such as headsets, additional screens, keyboards and mice, furniture such as their own home office desk and chair, or even upgrading internet provider.

How to manage the extra costs of remote working

Many of these costs may be covered by your employer so it is worthwhile checking with them before you purchase additional equipment whether they will cover the costs or if they already have the equipment they can give you to use. This may not be an option for everyone, for example if you are self-employed, or your employer doesn’t cover expenses such as broadband.

Did you know that you can also claim for working at home? Many people have been claiming for working at home using the UK government’s tax relief for working at home to recuperate some of the extra costs that they have accrued during the covid-19 pandemic due. This a tax relief that you can claim for working at home for one day or more during this coronavirus pandemic – you may be able to claim a year’s worth of this tax relief even if you have not been working at home for the full year.

Many people may find that they need further advice or solutions to help with their financial situation. If you have existing debts and would like help keeping your payments to creditors manageable, you can fill out the quick and easy CEX application form and we will get in touch to discuss how we can help you.