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Coronavirus and your money
What to do if you’re worried about your finances due to Coronavirus. Check back here for updates on financial help and topics around Coronavirus and your money.
Coronavirus and your money
The UK government has announced plans to amend the emergency Coronavirus bill to cover self-employed people for up to 80% of their net monthly earnings. The amount will be based on their earnings averaged over the last three years, or £2,500, whichever is lower; bringing the support for freelancers and the self-employed in-line with that offered to employees.
This proposal is in addition to the other measures already outlined: self-assessment payments will be deferred until January 2021; also, no businesses will pay VAT until June and the repayments for this will not be required until the end of the financial year. Find out more in our guide to Financial Help for the Self-employed.
The Government is already helping employees with grants that cover 80% of the salary of retained workers, up to a total of £2,500 a month. This is open to all employers and will be backdated from the beginning of March for at least three months. For the time being, this should help relieve some financial strain.
The Universal Credit standard allowance, for the next 12 months, has been increased by £1,000 a year, as has the Working Tax Credit basic element. This should help those on lower incomes get through the difficult climate caused by the Coronavirus outbreak.
Financial help steps you can take right now
Understand your current outgoings with our monthly budget planner – Your priority is to make sure that you have enough money to meet your basic needs. To do this, work out how much money you need to live on a day to day basis. You can do this by downloading and completing our handy budget sheet.
Assess your savings – If you have savings that you can rely on then don’t assume that you can’t get your money if it’s in a fixed term or notice savings account. Check with your bank or building society if they’re able to help, as some are now saying you’ll be able to access without penalties.
Consider using a switching service to save money – It may be worthwhile for you to switch tariff or supplier. Comparing prices online is an effective way to find a good value energy tariff. Use a comparison site like Compare the Market to see if you can find a cheaper supplier.
What should I do about my debts during the Coronavirus outbreak?
Prioritise your payments – Some bills and debts are classed as priority because the consequences of not paying are more serious than others. Priority debts should be dealt with before your non-priority debts. Don’t be fooled, non-priority debts are still important and will need paying but the consequences are less severe than priority debts. Make sure you understand the difference and act accordingly.
Speak to your bank, lender or credit provider if you think you’ll miss payments – If you contact a creditor to explain that you’re in financial difficulties, and you’re seeking help from a debt advice organisation, most companies will give you at least 30 – 60 days breathing space. Alternatively, if you need to reduce your payments to them in the short term, then ask if they’ll accept the amount that you can currently afford each month.
It has also recently been announced that having a temporary ‘payment holiday’ or ‘emergency payment freeze’ with your bank or lender because of Coronavirus problems won’t harm your credit score. This was already the case for mortgage payment holidays but now also applies to unsecured debts such as loans, credit cards, catalogues and store cards. Whilst your payments are stopped or reduced, the status of your account won’t be affected, meaning that your credit score will remain unchanged.
It’s worth noting that these changes must be agreed by your lender so they become authorised changes. If you just stop paying, or pay less then the normal amount or cancel a direct debit, then that will be reported on your credit report as missed payments. These ‘unauthorised’ changes will harm your credit score. So speak to your lender as soon as you can!
Get debt help as early as possible – If you are worried about your money or concerned that you will or have fallen into arrears then it’s always better to seek advice sooner rather than later. There is lots of free, confidential debt advice out there to support you and you don’t have to face the problem alone. Talking to someone can mean one less problem off your mind.
How can I look after my finances during Coronavirus lockdown?
Coronavirus has changed how people spend and earn money. Whether you or someone in your household has been financially affected by lockdown, there are steps that you can take to look after your financial wellbeing. Use our guide to look after your finances during lockdown.
What should I do about my finances if my health changes?
As with any change in your health, the quicker you review your finances and make changes needed, the better. The advice is changing every day, but we have summarised key points below:
What will happen if I have Coronavirus – You are entitled to your workplace’s usual sick leave and pay entitlements. Obviously, this will differ if you are self-employed or are on a zero-hour contract. You’d usually have to supply a sick or fit note from a doctor to do this, but now you’ll be able to get this by calling NHS 111.
I’m self-isolating – The advice is changing on if you have to miss work due to self-isolating – keep up to date on self-isolating on the government website.
I don’t qualify for sick pay – Then you may be entitled to benefits. The dedicated Coronavirus and claiming benefits page is being updated by the government. This page provides information on the arrangements the Department for Work and Pensions is making to support those who are affected.
Anything else? You may be entitled to council tax or housing benefit. Local authorities are getting an extra £500m for vulnerable people, and it’s anticipated that most of this will be spent on council tax support schemes. If you’re a homeowner, you may be entitled to help from a government mortgage scheme
I’ve got insurance and payment protection – Review your policy as soon as possible and get in touch with your provider if anything is unclear. Find out what you’re entitled to and how long you’re covered for.
I need urgent help with money and food; what can I do?
Access emergency food at your local foodbank – Food banks provide a minimum of three days’ emergency food and support to people in crisis. They work with frontline professionals to identify people in financial need and issue them with a food bank voucher. These include children’s centres, housing associations, advice charities and mental health teams.
To be able to access a foodbank you’ll need to be referred by one of the following agencies:
- Jobcentre Plus
- A social worker
- Citizens Advice
- Children’s centres
- Local authorities
- Police or probation workers
- GPs, health visitors or other medical professionals
If you aren’t already in touch with the agencies above, you can get in touch with your local foodbank to ask for help. They’ll work with one of their referring agencies to arrange an appointment with you. Once you’ve been referred to a foodbank, they will give you a voucher which can be exchanged for a parcel containing a minimum of three days’ nutritionally balanced food.
Find out if you qualify for emergency funding – You may be able to apply to your local council / authority’s Local Welfare Assistance Scheme. These local funds assist people in crisis situations and support independent living.
Local councils / authorities sometimes have slightly different names for this funding, so also look out for:
- Emergency support scheme
- Local support scheme
- Community and crisis support
- Discretionary local support scheme
These schemes are usually available to people on a low income that are facing financial difficulty. Each local authority runs their own scheme with different qualifying criteria. They may also provide different things such as grants, loans, referrals to credit unions for loans or providing goods such as fridges, prepayment cards or vouchers.
Different emergency funding is available depending on where you live in the UK. Get in touch with your local council / authority: