How to plan your family budget for 2021


With 2021 now underway, many UK households will be planning their budgets for the year ahead.

2020 brought many changes to household income as the UK battled the Covid-19 pandemic. From vacation pay to mortgage holidays, many people will have felt an impact on their finances, either for better or for worse.

For those looking to plan ahead and budget for 2021, you need to consider any financial changes as a result.

To help you properly budget for the coming year, Lowell has put together a list of helpful calculations, considerations, and tips to keep in mind when putting together your 2021 budget.

Energy consumption

With the UK set to continue working from home, it’s important that you factor in any additional expenses.

Working from home full-time can cost an extra £5.05 a month 1 . This comes from the additional heating and electricity needs, as well as the lower costs of running the microwave or kettle. Britons planning to continue working from home in 2021 should factor these costs into their budget.

Tax relief

If you regularly work from home you may be eligible to claim £6 a week of tax relief 2

The UK government has introduced a scheme to help people working from home with additional expenses. It should be noted that you cannot claim tax relief if you choose to work from home, only if your employer has also asked you to.

The tax relief covers water bills, heating and household insurance. Claiming will help households save a little more.

Travelling expenses

Parking costs on average between £1.10 and £1.65/hour. 3 (£3.00-4.80/hour in London), with the average 30-49 year old spending £28.40 per week 4 In public transports. While many hope 2021 will bring an end to lockdowns and restrictions, Britons calculating their transport budget for 2021 should consider how often they will travel and budget for daily, weekly or monthly mileage, parking and passes. spend travel accordingly.

It may be worth noting that if you need to travel on public transport regularly, you may want to consider monthly or weekly passes to reduce the overall cost.


Those who have spent 2020 furloughed should plan for additional income in their 2021 expenses when the easing of restrictions allows them to work again.

The average reduction in income for anyone on the furlough scheme was 20% of their salary. Over the course of a year, this equates to a reduction of 2.5 months of salary.

If you find a full-time job again in 2021, you’ll want to make sure you offset that extra income.


While it’s tempting to browse online sales at this time of year, it’s important to note the value of having even a small amount of cash set aside for any unexpected costs. that could occur.

This is worth considering throughout the year, as using the funds you already have, whenever possible, to cover expenses is always a much better option than taking out credit. Credit cards and loans often come with high interest rates, which means you pay more overall.

When reviewing your 2021 budget, try to find ways to set aside even a small amount each month if you can for emergencies.

Housing costs

Homeowners who took a mortgage holiday in 2021 should contact their bank for a repayment plan, which should be considered when calculating a 2021 budget.

Renters may be eligible for additional benefits if they live on a reduced income. People concerned about paying rent should contact their landlord directly.


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