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💉 Weight Loss Jabs for Unemployed?! + 🤫 My 10k Anti-F***wit Fund + 💡 Pre-Budget Pension Action

💉 Weight Loss Jabs for Unemployed?! + 🤫 My 10k Anti-F***wit Fund + 💡 Pre-Budget Pension Action

The 99 - 21st October 2024

Alice Tapper
October 21, 2024

Good afternoon and welcome to the news round-up.

The 99 is the home of financial news and insights made simple. You can count on accessible, trustworthy, and unbiased news insights every Monday.

Introducing The 99’s Explainers…

Each month, we'll explore a specific theme (throughout the month; sharing knowledge in bite-sized and actionable guides that are easy to grasp and apply to your own financial journey.

This month’s topic…The Fundamentals.

Alice x

49%

The percentage of graduates who won’t consider a non-hybrid job.

After a survey of more than 1,000 final-year university students, the numbers mean employers that require full-time office attendance will source from just 33% of the talent pool. 83% of the graduates cited commuting costs and time as a major deterrent, with hybrid work offering savings equal to a 13% salary boost.

“I have a 10k anti-f*wit fund... here's why”**

Weight-loss Injections To Get Unemployed Back To Work:

The Health Secretary’s Big Idea

💷 Obesity affects 1 in 4 adults in the UK.

🩺 The financial burden on the NHS due to obesity-related illnesses is around £11 billion a year, more than smoking-related diseases.

🥶 Obesity has been cited to cost the UK economy an estimated £98 billion every year due to lower productivity, economic inactivity and long-term sickness.

📍In constituencies with obesity rates over 15%, economic inactivity rates were over 45%, said the IPPR.

🤢 On average, obesity leads to an additional 4 sick days taken by affected individuals each year.

Who Actually Said What?

Health Secretary Wes Streeting has proposed giving weight-loss jabs to unemployed individuals living with obesity.

The aim is to help them lose weight and improve their chances of getting back into the workforce.

Starmer Weighs In

Prime Minister Sir Keir Starmer has supported the initiative vocally, calling the jabs ‘very important’ and saying that we need to ‘think differently’ to solve the crisis.

And this isn’t just an idea — there’s an actual plan in place.

What’s The Plan?

The government announced the launch of a 5-year trial in Greater Manchester to see if weight-loss drugs can actually make a difference to employment rates.

Pharmaceutical company Eli Lilly, which manufactures the marketed drug called Mounjaro, is investing £279 million into the UK market, including money for the trial itself.

The drug, Tirzepatide (called Mounjaro on the market), works by regulating blood sugar and energy, reducing one’s appetite and cravings, and is currently already used to treat type 2 diabetes. Nearly 250,000 people across the UK are expected to receive the Mounjaro jab over the next 3 years for a variety of reasons.

The trial will involve up to 3,000 people with severe obesity (those with a body mass index over 40 and at least 3 health conditions linked to weight).

The study will track participants' weight loss, hoping to prevent diabetes, and reduce other obesity-related complications.

How will this help with employment?

Researchers will also monitor how the drug affects people’s employment status and sick days, trying to establish whether weight-loss medication can lead to tangible improvements in the job market.

If successful, the trial could pave the way for wider use of the weight-loss medication as part of the government’s strategy to combat both the obesity epidemic and its employment-related consequences.

This is all part of Labour’s plan to drive economic growth but the plan has been described by some as dystopian. Streeting wrote in the Telegraph:

‘Our widening waistbands are also placing significant burden on our health service, costing the NHS £11 billion a year – even more than smoking. And it’s holding back the economy.’

What do you think of the plans?

Inflation Beats 2% Target For First Time In 3 Years

The Numbers In A Nutshell

Inflation in the UK has fallen below the Bank of England’s 2% target and hit 1.7% - its lowest measure since 2021. The drop, driven by cheaper airfares and petrol, was larger than expected from the 2.2% measured in August.

Hold on - Inflation recap

Inflation is the rate at which prices of goods and services increase over time. E.g. if a loaf of bread costs £1 and then goes up by 10p, that’s a 10% inflation rate for bread!

Not just bread - the Office for National Statistics (ONS) tracks the prices of about 700 items (that change depending on our habits/trends) to calculate the Consumer Price Index A.K.A the CPI, which is one of the official measures used to inform economic decision-making.

2024 figures

Inflation & Interest Rates - Hand In Hand

🔄 The two typically work in opposite ways to each other. When inflation - the rate of price increases - rises, the Bank of England often uses the interest rate as a tool to slow things down a bit.

👌 How? For example, higher interest rates make borrowing more expensive for consumers and businesses, meaning people spend less and save more. This reduced demand can help slow down price increases, helping bring inflation under control.

How Will The 1.7% Rate Affect You?

📉

Interest Rates ✅ ❌

With inflation down, pressure is mounting on the Bank of England to cut interest rates.

Predictions say that there is a 90% probability that the BofE base rate will drop to 4.75% in November.

This is good news if you’re looking to borrow (cheaper interest rates on credit) or have a mortgage (lower mortgage payments for those with variable rates).

But if you're a saver? You might see lower returns on your investments.

🔐

State Pension ✅

Thanks to the “triple lock” policy, state pensions will rise at the rate of whichever is highest: inflation, wage growth, or 2.5%.

Inflation is usually the highest, but, since wages are now rising faster than the inflation rate, pensioners are looking at a 4.1% increase in their payments next year.

The new flat-rate state pension is expected to increase to £230.30 per week, up from £11,502 to £11,975 annually.

💰

Benefits/ Welfare ❌

September’s inflation rate is used to calculate increases in benefits like universal credit in the following year. The weaker inflation figure means a more modest rise—universal credit for under 25s will only increase by about £5.30 a month. For a couple aged over 25, the rise is likely to be £10.50 a month, according to investment platform AJ Bell.

And with energy prices rising again in this month, inflation could quickly pick up speed, but it will be too late to be accounted for in the benefits payout.

🍂

Autumn Budget ✅ ❌

A lower inflation rate can ease the government's budget pressures, as the cost of public services and the benefits payout will be slightly lower and therefore save some cash.

But with inflation low and tax thresholds frozen, wage increases are more modest and the government may collect less in taxes because fewer people are being bumped up into the higher tax brackets.

🛒 Cost of Living ✅

You’re looking at a bit of relief. As inflation cools, your money and wages will stretch a bit further when buying everyday items—for now at least.

💺

Supercommuters: Why More People Are Travelling Long Distances to Work

Do you have a very long commute?

More people are spending extraordinary amounts of time travelling to work, and there’s a new term for it—supercommuters.

A recent LinkedIn poll revealed the following:

25% of workers have a commute of more than 1 hour each way.

8% of those are travelling for more than 90 minutes each way.

37% spend between 30 to 60 minutes commuting.

38% manage to keep their commute under half an hour.

What Is A ‘Supercommuter’?

A supercommuter is someone who spends at least 90 minutes getting to work. Thanks to hybrid working, they typically split their time between home and the office, making long commutes less of a daily grind.

47% of them said they started the habit during or after the pandemic.

Research by Trainline found that the average supercommuter is heading to the office 3 days a week, clocking up at least 12 hours on the train.

That’s more than an entire workday per week spent travelling.

Why Are People Choosing This?

Surprisingly, many supercommuters say they’re happier with a long commute. According to the Trainline survey:

⚖️ Work-Life Balance ⚖️

73% of supercommuters say they prefer a longer journey to the office because it gives them a better work-life balance.

💡 More Opportunities 💡

29% say their family has more opportunities because of their decision to live outside of the city they work in.

💷 Lower Cost of Living 💷

34% say they’ve found a cheaper cost of living by living farther from expensive cities.

However, 93% of supercommuters say they still make an effort to come into the office enough to stay connected with their colleagues and clients.

Would you consider a supercommute? (90+ mins each way)

Pension Panic: How Budget Uncertainty is Changing Money Habits

& What You Can Do About It Today

The UK government has warned that the upcoming Autumn Budget will bring "painful" decisions. People are starting to feel anxious as the 🗓️ 30th of October draws closer, and it's already affecting how they manage their money—especially when it comes to pensions.

Why The Panic?

🚨 Investment experts are predicting a potential “tax raid” in the Budget as the government looks to plug the £40 billion hole in public finances.

🔍 Capital gains tax, inheritance tax, and the tax benefits of pension savings are all rumoured to be under review.

📈 Hargreaves Lansdown estimates that if these changes go ahead, some people’s tax bills could increase by more than £200,000.

What Is a “Pension Tax Raid”?

Currently, you can take 25% of your pension tax-free once you reach 55, with a cap of £268,275.

But the government might decide to lower this percentage, or reduce the cap, meaning you could withdraw less money tax-free.

There's also speculation that the maximum amount you can contribute to your pension each year without paying tax (recently increased to £60,000) could be cut again.

How Are People Reacting?

According to investment site AJ Bell - one of the largest investment platforms in the UK - a concerning amount of their 542,000 customers are prematurely taking their tax-free money out of their pensions.

Some are also contributing more to their pensions now, hoping to take advantage of the current tax relief before any changes happen.

AJ Bell reported a 17% rise in new customers while other big wealth managers are also seeing people making early withdrawals or increasing their contributions.

It was enough to warrant an official letter to the Treasury from Steven Levin, CEO of Quilter, who manages more than £113 billion of customers’ money.

What Can You Do To Prepare?

Stay Calm Chill Out GIF by New Amsterdam

👆 Increase Your Pension Contributions 👆

By putting more into your pension now, you can take advantage of current tax relief rates before any potential changes.
Basic-rate taxpayers get 20% tax relief, higher-rate taxpayers get 40%, and additional-rate taxpayers get 45%.
It’s also a great way to reduce your taxable income.
You could also consider a "salary sacrifice" if your employer offers it. You can ask them to contribute to your pension instead of giving you a pay rise or bonus. This reduces your taxable income and bumps up your pension savings at the same time.

💨 Don’t Rush To Take Your Tax-Free Cash 💨

While it might seem tempting to withdraw it early, Helen Morrissey of Hargreaves Lansdown says only do it if you have a high-yield investment alternative.
While there’s talk of reducing the 25% tax-free withdrawal limit, it might not happen for a while.
Pensions grow tax-free, so leaving your money invested longer could help it grow more than taking it out and letting it sit in a low-interest savings account.

📣 Stay Calm And Wait For Official Changes 📣

Any big pension changes announced in the budget are unlikely to kick in before April 2025 at the earliest.
Avoid making panic decisions based on rumours—keep an eye on the official Budget announcement for the full details.

Have you made any financial moves ahead of the Budget?

October 101

The Fundamentals - Getting Organised

1. Unexpected Events Are A Part Of Life

Unexpected events are a part of life. If you’ve ever tried to adhere to a spending plan, you’ll know how difficult it can be to accurately predict future costs. Life can be expensive, and emergencies are inevitable.

1 in 4 adults does not currently have an emergency fund.

11.2 million people across the UK have savings of less than £1,000.

Read this Confession: ‘I have a 10k anti-f***wit fund... here's why’

2. What Is An Emergency Fund?

An emergency fund (EF), sometimes referred to as a "rainy day fund" or "freedom fund," is an essential financial safety net. This fund is designed to help you manage unexpected expenses, such as a broken boiler, illness, or an urgent veterinary bill. It provides the financial independence to leave difficult situations, such as a toxic job or relationship. This is your ‘in emergency break glass’ financial SOS tool.

3. How Much Should You Save?

📠

The Old School Advice

The old school advice is that you should save 3-6 months’ worth of living expenses. In this case, if you lose your job then you'd have a decent amount of runway to see you through until you find another job.

But for the average person, that's going to be between £4,500-£10,000. That's an amount that will probably take you months or even a year or more to save.

Let's say you're an average earner on £35,830* before tax, and you spend:

£700 on rent a month
£800 on groceries, bills, car insurance, maintenance costs etc.
£200 on holidays, eating out and fun stuff

After these costs, you can probably afford to save about £300 a month—at a push. To save just a £3000 emergency fund is going to take you around 10 months.

_{*The median salary in October 2024 according to the ONS}

💡

The New School Wisdom

So yes, in an ideal world, we’d all have at least 3-6 months’ worth of living expenses saved up. If you're on a high income, go for it.

But a better question to ask yourself is this: If the worst happened, how much would I need to get through it or solve the problem?

Things To Consider When Setting Your Target

Situations you should explore include: redundancy, illness, home maintenance, family emergency etc. Think through those and then consider the following questions. A single person with no kids will have a very different answer to a family of 5….

⚠️ Risk Profile ⚠️

It's very important to factor in risk. A civil servant or a doctor will have a different risk profile for redundancy to someone who works in a more vulnerable sector.

🪂 Your Parachutes 🪂

You'll want to think about any other parachutes you can rely on.

Your non-financial back-ups e.g family, a spare room. Could you safely rely on a family member to support you? Could you move in with someone to save on rent? Do you have a room you could let out?

Protection - Does your employer provide things like health insurance or critical illness cover?

Thinking in terms of numbers and actually writing this down can help. Particularly if you're really worried about redundancy or a particular 'oh f**k' situation. With this in mind, you should be able to estimate roughly what you'd need for your Emergency Fund.

🗓️ Regular Reviews 🗓️

Review your plan for your emergency fund every year to ensure it still meets your needs. If you end up using your emergency fund then it’s back to the previous step to consider what you need to re-save and build back up your reserves. As your expenses and responsibilities grow, you may need to adjust your savings target to keep up.

🔋 The Power of Small Contributions 🔋

Even small, consistent savings can build up over time. Here’s a look at what saving a little each week could amount to annually:

Weekly Savings	Annual Savings
£5	£260
£10	£520
£25	£1,300
£50	£2,600
£100	£5,200
£200	£10,400

4. Paying Off Debt VS. Building An EF

Q: Should I pay off debt first?

A: If you’re paying high interest rates on a credit card, it’s essential to prioritise paying off that debt. Delaying repayment could cost you hundreds, if not thousands, in additional interest. As long as you have access to a credit card for emergencies, focus on directing as much of your income towards clearing the debt as you can reasonably afford before starting to build your emergency fund (EF).

Q: What if I feel nervous without one?

A: That said, having some cash available can be reassuring. You might consider spending a month or two building a small emergency fund before fully committing to paying off your debt. If your debt is on a 0% interest plan and the promotional rate isn’t expiring soon, you could focus on building your emergency fund. However, it’s crucial to monitor when that interest-free period ends and plan accordingly to ensure you can pay off the debt in time.

5. Where To Put Your Emergency Fund

This part is critical. The goal is not just to save but to make sure your savings are in the right place.

Pay Yourself First 🫵

The most important step is getting that EF money out of your current account ASAP so you don’t spend it. Set up an automatic transfer to move the money the day your paycheck hits.

If managing multiple accounts isn't for you, consider keeping your emergency fund in a savings "pot" or "vault" linked to your existing current account.

Accessibility 🚫

Avoid locking your emergency fund into accounts that are difficult to access. The goal here is quick, hassle-free access for genuine emergencies. Consider using an online instant-access savings account or even a high-interest current account with quick withdrawals.

Premium Bonds 💷

With premium bonds, your money is safe and accessible, and you have the chance to win cash prizes instead of earning interest. It’s a fun option, but not guaranteed income like traditional savings. However, the option to withdraw anytime makes it an appealing place to store emergency funds. Note: you can also opt to cash in your current premium bonds at any point but it takes approximately three working days which isn’t as accessible as an easy-access savings account. You might want to keep some of your EF more accessible.

Separate From Other Savings 📦

Maybe it's holidays or a new MacBook, but in addition to your EF savings, you will want to save into another 'pot' or account for the bigger, boujier, but non-essential purchases we all need to make. Keeping it separate from other savings means you can better keep track of your money.

✅ Week 3 Checklist ✅

Easy and quick actionable life admin you can do right now

⬜️ Set up a separate EF account

⬜️ Work out your target size for your EF

⬜️ Start small or grow your EF this week – save between 5-10% of your paycheck

Sources/Read More:

The Health Secretary’s (not so) Big Idea: Weight-loss Injections To Get Unemployed Back To Work

Inflation Beats 2% Target For First Time In 3 Years

Supercommuters: Why More People Are Travelling Long Distances to Work

Pension Panic: How Budget Uncertainty is Changing Money Habits