The current coronavirus pandemic is altering the way UK citizens live their lives. Our main concern is, or course, for the health of our family and the well-being of those we love. However, the health of our finances is also an important factor, with many of us worried about the financial impact of paying monthly bills, rent or mortgages.
Our guide helps you to understand what financial help is available during these uncertain times.
Help for homeowners
Despite the Bank of England’s reduction of the UK’s base rate to a record low from 0.75% to 0.1% in under a week, many of us are rightly concerned about keeping up with our mortgage payments whilst facing reduced hours, a period of furlough or a vastly reduced income.
Help has been made available by banks in the form of mortgage repayment holidays, which means that families who are struggling to keep up with utility bills, food bills all whilst keeping on top of the mortgage payments can apply for a three-month payment break, during which time they will not have to pay their monthly mortgage payment.
If you are feeling the pinch, it’s worth applying for a mortgage payment break online. You are not guaranteed to receive the help, but most banks have agreed a tolerance on mortgage payments until the country returns to ‘business as usual’.
A mortgage break does not mean you will pay less over the terms of your mortgage. It’s a temporary stop-gap to allow customers in financial difficulty some breathing space, and when payments begin again you may find yourself paying a slightly higher monthly fee, as the payments from the three-month break will be split over the monthly payments for the rest of the term of the mortgage.
Respite for renters
If you are finding it difficult to pay your rent due to the COVID-19 crisis, then the advice is to speak to your landlord in the first instance and try to come to an arrangement to reduce payments until the pandemic is over.
Lots of renters have concerns over eviction if they cannot meet the rent payments and government guidance is ‘encouraging tenants and landlords to work together’ to organise a payment scheme for rent over this period.
It is also worth checking if you are entitled to financial help from the Universal Credit system if your circumstances have changed and you cannot afford your monthly rent.
Credit card and loan repayments
Aside from keeping a roof over our head, UK citizens are finding it harder to keep up with loan and credit card repayments, which adds worry to an already stressful time. The Financial Conduct Authority are helping by instructing banks to offer payment holidays to customers under financial strain.
Of course, if you do find yourself in the situation where you are unable to meet your repayments on your debt, you must always speak to your lender as soon as possible to formulate a repayment plan and make them aware that you are struggling.
Council tax considerations
If the monthly council tax bill is a concern, then you should speak directly to your local authority to see what help is available during the coronavirus pandemic. Help varies between each local council, but some are offering a two-month payment break and others are suspending enforcement action.
It’s important to remember that a payment holiday will not reduce the amount of money due over the course of the year. Once payments resume, they are likely to increase as they are readjusted and split of the remaining months for that period.
Mobile phone boosts
Keeping in touch with loved ones is vitally important when you can’t be with them face to face. Thankfully we have the technology available to video call, send messages and stay in touch much easier than ever before.
Mobile phone providers are offering extra data at no cost to help us stay in connected during the lockdown period. It’s worth checking with your provider as to what is available for your network. For example, Tesco Mobile are not counting any data usage for helpful sites such as the NHS, Mind, Samaritans and many others allowing you to stay informed and protected.
Vodafone are offering free unlimited mobile data to its half a million customers who are on pay monthly contracts.
TV licence help for the elderly
The BBC have revoked its plan to start charging over 75s for a TV licence until August 2020 as a result of the COVID-19 pandemic. Originally the over 75s were due to be charged from June 1st, but a two-month grace period has been implemented to help some of the most vulnerable in our society at this time.
Car insurance credit
If you are no longer travelling to and from work daily, it’s well worth checking with your car insurer to see if your premiums can be reduced.
Some of the larger insurers, including Direct Line, have told Money Saving Expert that if you have reduced your annual mileage by 1000 miles due to working from home or being on furlough leave, then refunds may be available.
Help is available
A range of support measures have been put into place across the country to minimise the financial impact of the current pandemic on businesses, the self-employed and families. It is a worrying time, but if you do find yourself unable to meet your financial commitments it is incredibly important to reach out to your lenders, local authority or utility suppliers to see what help can be put in place to guide you through these uncertain times.
The COVID-19 situation is changing rapidly, and whilst this information is currently up to date we advise checking the latest information at https://www.gov.uk/ for updates.