There are many changes set to be made financially in 2022, due to the impact that the pandemic has had on the economy, as well as various political situations around the world, and the repercussions of Brexit. Keeping up to date with the changes that are being put into place this year can help you keep on top of your finances and manage your cash flow more easily. If you find that you’re struggling to manage due to the changes being made, payday loans online can help in an emergency.
Below, we’ll look at some of the changes being made this year and how they could impact your finances.
As we know, inflation is a hot topic in finance this year, with countries all over the globe suffering from rising prices of products and services, energy, and fuel. There is no sign of inflation slowing down, and it is set to carry on into the rest of this year, and potentially even longer.
The inflation that we’re seeing is due to industries trying to make money back that they lost during the pandemic – a surge in demand cannot be met due to supply issues, and therefore this pushes the cost of living up. There are other political factors that are having a further effect on the price of goods, such as a war breaking out in Ukraine, as well as Brexit.
Changing views on pensions
Pensions are an important part of our finances, but the way people think about them may be about to change. Different people have varying retirement plans, not to mention the fact that we’re all living longer and therefore will be retired for a longer period of time. Changes that we may see in pensions this year are as follows:
- Downsizing – this is increasing in popularity amongst the retired that are looking to make a bit of money on larger properties that they don’t need now
- Health and wellbeing – with people living longer, it is forecast that more people of retirement age are going to be using pension payments to pay for emergency bills and healthcare expenses
- Savings – Pension platforms are already adapting so that people can save for a longer retirement and will continue to adapt to this new way of living this year, and in the years to come
Increasing interest rates
Another increase that is taking place this year is an increase in interest rates. Whilst this may sound like good news for people with savings and can mean making a little bit of extra money, for people with mortgages, credit cards and overdrafts, the news is not so great. Although they have only increased a small amount, it means homeowners will have to pay more by hundreds of pounds a year on their loans.
We have inflation to thank for these increases, and although it may seem easier to ignore the current increase in rates, it could leave you in a worse scenario further down the line, so if your mortgage payments are going up, or are set to in the near future, call an expert to see if re-mortgaging is something that could be beneficial to you.
National insurance rises
National insurance is set to rise this year to pay for social care, with the lowest-paid workers being hit hardest by this new increase. Due to the pandemic and the ageing population, pressure on the care system in the UK is rising, meaning the residents of this country are being taxed to help revive the system. Concerns around the rise in national insurance have been voiced as it is said that it could have a detrimental impact on those earning less, as well as young people and women – and most are already facing an increase in the cost of living.
2022 is set to be a difficult year financially for a lot of us, with inflation and the cost of goods and services increasing, alongside the increase in National Insurance payments. It is said to get worse before it gets better – but it’s not all doom and gloom, the minimum wage has risen this year, and savers can take advantage of rising interest rates.