How to plan your household 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 battles the Covid-19 pandemic. From paid vacation to mortgage vacation, many people will have felt an impact on their finances, 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 budget correctly for the coming year, Lowell have put together a list of useful calculations, considerations, and tips to consider when crafting your 2021 budget.

Energy consumption

With the UK on the verge of continuing to work from home, it is important that you take into account any additional expenses.

Working from home full time can cost an additional £ 5.05 per month 1 . This is due to the additional heating and electricity requirements, as well as the lower costs associated with operating the microwave or kettle. Brits who plan to continue working from home in 2021 should factor these costs into their budget.

Tax relief

If you work from home on a regular basis, you may qualify for a tax break of £ 6 per week. 2

The UK government has a program in place to help people working from home cover additional expenses. It should be noted that you cannot claim tax relief if you choose to work from home, only if your employer has requested it as well.

The tax break covers the bills for water, heating and home insurance. By claiming, it will help households save a little more.

Travelling expenses

Parking costs an average of £ 1.10 to £ 1.65 / hour 3 (£ 3.00-4.80 / hour in London), with the average 30-49 age group spending £ 28.40 per week 4 In public transports. With high hopes that 2021 will end blockages and restrictions, Brits who are calculating their travel budget for 2021 should consider how often they will travel and budget for daily, weekly or monthly mileage, parking and leaving them. -pass travel accordingly.

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


Those who spent 2020 on leave should budget extra income in their 2021 expenses when the easing of restrictions allows them to work again.

The average reduction in income for anyone on the leave 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 yourself in full-time employment in 2021, you’ll want to make sure you match that extra income.


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

It is worth considering throughout the year because using the funds you already have, when 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 considering your 2021 budget, try to find ways to set aside even a small amount each month if you can for an emergency.

Housing costs

Homeowners who took mortgage leave in 2021 should contact their bank for a repayment plan, which should be taken into account when calculating a 2021 budget.

Tenants may be entitled to additional benefits if they live on a reduced income. The persons concerned with the payment of the rent should contact their landlord directly.


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