Working from home – what’s the real cost and how can you make it pay off? 

Written by
Felicity Hannah
Finances expert
26 October 2021
5 min read
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Covid-19 has had a huge impact on our approach to work, with WFH (working from home) now a standard practice for millions of Britons. For those of us continuing to stay home to work, there are ways to make the most of the benefits, and minimise the downfalls. 

Of those who were working from home during the pandemic, 85% want to adopt a “hybrid” approach, splitting time between home and the office, according to the Office for National Statistics (ONS). 

Some companies have closed or reduced their office space, while for others it is back at the desk “as normal”, which means two feet away from a colleague eating a cheese sandwich for lunch. 

If you were working from home through the crisis, and you expect to keep doing so, what do you need to know to keep your costs down and your benefits up? 

Here are some quick and easy wins: 

Take a tax break 

If your employer requires you to work from home, you’ve always been able to claim for increased costs, such as heat or electricity, for the specific time at home. 

During the 2020 lockdown, HM Revenue & Customs (HMRC) launched an additional “microservice” which, even if you only needed to work from home for a day, allowed you to get a whole year’s tax relief. 

This applies for the 2021/ 2022 tax year, too, meaning many can claim two years’ relief, worth £280. 

The microservice is designed to help people who are working from home cover the extra pressure on their bills, and it’s easier to apply than you might think – you don’t even need to keep receipts. 

If you’re working from home now, you may be able to claim £280 in tax relief 

Work out your commuting costs 

Staying home really brings down commuting costs, as you don’t need a train ticket to get from your bed to your kitchen table. 

If you’re now working at home some days and taking the train to an office for others, then a season ticket – a cost-saving solution for regular commuters – may not be saving you anything compared to the cost of individual journeys. 

However, you can now buy flexible season tickets, which enable you to travel between two named stations on any eight days in a 28-day period. 

Although the new flexible season tickets apply to National Rail operations in England, they are available on cross border commuter routes, for example Bristol to Cardiff, or Berwick to Edinburgh. 

But do your sums in advance. While the government estimates average savings of up to £350 a year, critics of the scheme claim that commuters will only make any savings compared with a walk-up ticket if they travel at peak times for all eight days a month. 

Call your car insurer 

If you’re continuing to work from home at least some of the time, then talk to your car insurance company about whether the price could fall because you’re doing fewer miles. 

And if you are fully home-based now, then switching your policy to just “social use” could also bring the cost down. Just make sure you let your insurer know if you do start driving back to the office. 

If they can’t help you, then make sure you  shop around and compare policies to see if you can get a better deal. 

Switching your car insurance policy to just “social use” could bring the cost down 

Resist the treats 

Not going out to an office each day can save you lots of money on small, everyday treats, such as a coffee or lunch out with colleagues. 

However, being home all day and ready to collect parcels has its own risks. The temptation to shop online in your lunch break, just to have something to break up the monotony a bit, can be huge. 

And it’s alarmingly easy to persuade yourself to spend money shopping when you know you’re saving on other costs like commuting. Eventually, you can end up spending more than you did before. 

So, set a shopping budget each month and stick to it. In fact, spending half an hour drawing up a budget is one of the best ways to gain complete control of your finances. 

Set a shopping budget each month and stick to it 

Find a cheaper gym membership 

Lots of money-saving articles suggest ditching the gym and going for a run. This isn’t the right answer for everyone, but you might be able to save some extra money on your gym membership fee right now. 

Working from home can make it easier to go to classes or work out at lunchtime instead of on the way home from work when gyms are at their busiest (and sweatiest). And some gyms offer a reduced cost membership if you visit in the middle of the day rather than at their peak times. 

If you don’t plan to swim, then there’s no sense paying a monthly fee. Maintaining a pool tends to drive up monthly club costs and memberships fees, and can quickly leave you out of pocket. 

If it’s fitness classes that you are most tempted by, consider getting just a class card so that you’re only paying for the instructors and space when you use them. 

You could save money, avoid lunchtime shopping sprees, and free up your evenings for seeing all the friends you missed during the pandemic. It’s a triple win. 

3 things to do right now...

Take a few minutes to unsubscribe from retail marketing emails with Unlistr. It will scan your inbox and compile a list of your email subscriptions, which you can then edit. 

Do you need to print things out? Post things? Any costs involved in normal office activities should be covered by your employer. Speak to your boss to find out what you can expense each month. Keep all receipts. 

If you’re planning on signing up for a gym membership, make sure that you do it at the end of the month, when the sales team is trying to close last-minute deals to reach their quota. This is the best time to ask to get a deal. 

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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.