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How to save money working from home

From claiming tax relief to reducing your energy bills – there are a number of ways you can save money working from home.

If you’re working from home, instead of your usual workplace, you may find certain household costs increase. This could include phone and utility bills, as well as setting up your home working environment. 

The good news is, you may be able to save money in other areas. Here are some tips to help you do it. 

Claim tax relief when working from home

If you’ve had to work from home – even for one day – you may be able to claim tax relief on additional household costs that are not reimbursed by your employer, such as heating, metered water bills and business calls. You may also include a suitable share of your rent, mortgage or council tax costs. The tax relief is at the rate you currently pay tax. 

You may be able to claim tax relief on either:

  • £6 a week from 6 April 2020 (you’ll not need to keep evidence of extra costs); or

  • the exact amount of additional costs you’ve incurred above the weekly amount (you’ll need to have evidence of this and keep receipts)

This could save you £60 if you’re a basic-rate taxpayer or £124 if you’re a higher-rate taxpayer. 

The tax year ends on 5 April. To check eligibility and to make a claim, visit GOV.UK

It can also be useful to check if you’re eligible for any other benefits, which could help with any outgoings you have. 

Save what you’d usually spend at work

There may be some costs you no longer need to pay for when working from home, including:

  • train or bus pass

  • fuel to get to and from work

  • accommodation when working away

  • buying lunch out

  • takeaway coffee

As these outgoings may have stopped or reduced, you could add the money you would have spent into your savings account. Moving it across on payday can help reduce the temptation to spend it. 

Save on your equipment

Speak to your employer about any equipment you need to be able to work from home. For example, you may be able to borrow an extra monitor, or an office chair from your workplace. Your employer may also reimburse you, or contribute some money towards any items you’ve needed to buy for work. 

Save on your energy usage

If you’re spending more time at home, your energy usage is likely to increase. According to research, household fuel bills are set to soar due to working from home restrictions – which could add an extra £45 a month to your energy bill.1  

Everything from boiling the kettle to turning on the heating more often will raise the cost of your energy bills. To help keep costs down, there may be a few things you can try, including:

  • putting on an extra layer of clothing before turning on the heating

  • only heating the rooms you’re using

  • turning off the lights and making the most of natural light when working

  • turning electrical items off instead of leaving them on standby

  • turning your thermostat down by 1 degree

Check your insurance policies

If you’re not having to drive to work regularly, or at all, you may be able to alter your car insurance policy and pay a lower premium. 

Some car insurance companies also offer goodwill gestures such as money back for their customers. However, not all do. If your provider offers this usually they’ll contact you directly. 

When considering insurance, it’s also important to check your home and contents insurance policy to make sure you have the cover you need. For example, you may need extra cover for new items purchased, such as laptops or phones. 

Keep your food bill down

If the whole family is spending more time at home, you may find your food bills goes up to cover the extra lunches and snacks throughout the day.

You may need to allow a little extra cash in your food budget to cover this, but there are ways you can keep your food bill from growing too much. 

Explore: Food shopping: how to save money and waste less