In the midst of the current pandemic, we understand that many of you may be concerned about your health, finances and current living and work arrangements.
Whether you’ve had to take time off work due to the Coronavirus (COVID-19) pandemic or if you’re self-employed and it has impacted your workflow, you may be wondering what you can do to support yourself and your finances during this challenging time.
To help you get your head around things we’ve put this page together. This guide will help you to understand your rights, what you’re entitled, and where to find more information regarding your home, health and work situations.
1. Know your rights and what you’re entitled to
The global pandemic is having huge implications across the world, not only just in the UK. In this time of need, it is vital for you to understand what your rights are and what you’re entitled to. As this will affect the following:
- Employment and pay
- Job Seekers Allowance (JSA), Employment Support Allowance (ESA) and Universal Credit
- Holiday and Travel
- Statutory Sick Pay (SSP)
- Debt, Loan and Mortgage/Rent payments
If you are self-employed and have had to take time off due to illness or lack of work, you may be entitled to the Self-employed Income Support Scheme. If you are eligible, you will be able to claim 80% of your monthly earnings of up to £2,500.
For more information, visit GOV.UK.
If you can’t work because you or someone in your house has been showing symptoms or has suspected Covid-19, you may be entitled to Employment Support Allowance (ESA) under new rules. If you are eligible, you will be given ESA payments starting from the first day of your absence from work.
For more information on ESA, visit GOV.UK.
If you own your own business, you can apply for the Coronavirus Job Retention Scheme which will allow you to cover up to 80% of your employee’s salaries.
As well as this, SMEs can apply for loans of up to £5 million with the Coronavirus Business Interruption Loan Scheme, through the British Business Bank.
Alternatively, for smaller businesses if your workforce is currently less than 250 employees, then the government will provide your employees with SSP for up to 14 days.
Those on reduced hours or unpaid leave
If you’ve been made to take unpaid leave or have had your working hours reduced by your employer, you may be entitled to Guarantee pay, Job Seekers Allowance or Universal Credit to help you to cover the costs of living.
For more information, visit GOV.UK.
Parents of school-age children
If your child or children’s school has been closed, you are entitled to take time off to look after them if you are unable to make other arrangements.
Discuss this with your employer, and they should allow you the time off. You should be able to take this off as holiday; therefore, you will still be entitled to your holiday pay.
Parents of school-age children who are key workers
If your child or children’s school has been closed and you are a key worker and therefore cannot arrange for your child to be kept at home or stay with a close relative, then educational provisions will be made for your child or children.
Employment Support Allowance (ESA) or Job Seekers Allowance (JSA)
If you claim ESA or JSA, then there will be no changes to your benefits. You should also not attend your Job Centre in the meantime for three months unless you are instructed to do so.
Universal Credit or Working Tax Credit
If you claim Universal Credit or Working Tax credit, then there will be no changes to your benefits in how they are paid.
If you claim disability benefit, this will not affect your payments; however, if you are due for a capability assessment, then all appointments have been suspended until June. The Department of Work and Pensions may be in contact with you to arrange alternative assessment methods in the meantime.
Landlords and Homeowners
If you are a landlord or homeowner, your mortgage repayments have been suspended for three months. The Bank of England base rate has been dropped to 0.1% encompassing these changes.
If you are currently renting, while rents have not been suspended, the government has suspended mortgage payments for buy-to-let properties, meaning there should be no pressure from landlords for you to make rental payments if you are unable to do so.
Additionally, the government has issued a complete ban on evictions during this period of 3 months, meaning that your landlord cannot take out court proceedings if you fail to pay your rent during those three months. Once this period is over, if it is not extended, you will then be able to discuss with your landlord the appropriate payment arrangements.
If you have an upcoming holiday booked, while travelling isn’t banned, all non-essential travel has been advised against. If you are looking for a refund or to rearrange your holiday get in contact with the company that you booked with or with your travel insurance provider to check their refund and cancellation policy.
2. Struggling to pay debts and bills? Here’s what you can do
As previously mentioned, mortgage and buy to let mortgage repayments have been suspended, alleviating some of the pressure on homeowners and renters to pay, however, what do you about all your other bills, such as:
- Gas, water, electric
- Council tax
- Credit cards and loans
Council Tax Bills
As it currently stands, there is no help for those who are struggling to make their council tax payments, for the time being. However, this could all change in the near future.
If you are unable to pay your council tax, get in contact with your local council to see whether you can work out an affordable repayment plan.
If you are currently receiving benefits or help from the government at this time, then you may qualify for your local council’s reduction scheme.
Gas and Electricity Bills
Gas and electricity companies are more than happy to help you if you are unable to keep up with your bills. What you’ll need to do is to phone or get in contact with them directly and explain your situation.
You should be able to come to some agreement about your repayments to come up with a repayment plan. Alternatively, you can ask them to make the appropriate changes to your tariff if you are not currently on the most suitable one.
Some providers may offer you credit if you are using a prepayment meter. No disconnections will be made during this present time.
Water companies in the UK have made measures to ensure that those who are struggling financially and cannot afford to pay their water bills receive the support they need. You will need to get in contact with them to explain your situation so that they can make arrangements for you.
These can include making a repayment plan, offering a repayment holiday, applying for special schemes and providing you with advice on what to do next.
If you are worried about either illness or work situations affecting your existing debt or loan repayments, then there are several things that you can do.
Check for whether you took out PPI or Income Protection
Firstly, you can check the terms and conditions of your loan or debt to see whether you took out Payment Protection Insurance (PPI) or Income Protection. While PPI is not compulsory and was mis-sold in the past if you took out PPI or IP when you borrowed money, you should be covered in the event of the following:
- Circumstances affecting your ability to work
If you did take out Income or Payment Protection Insurance, get in contact with your provider to see whether you could make a claim.
Get in contact with your lender directly
Secondly, get in touch with your lender. If you are aware or concerned that illness or lack of income will soon affect your ability to make repayments, contact them as quickly as possible to explain your predicament. This will allow your providers to be aware of your financial situation to, therefore, make the appropriate arrangements.
Seek help as soon as you can
Thirdly, seek help for your debts as soon as you can. There are many online charities and free, impartial debt advice websites who can give you the support and advice that you need during this time. The Money Advice Service and the debt charity StepChange, are just a few organisations who can offer the support you may need.
3. Need to borrow money? Here are your options
If you don’t have enough savings to see you through this unsettling time until you get back on your feet again, then you may need to borrow money during this time. While borrowing money can seem like a great idea, there are a few things you need to consider first before you apply.
- Income - do you know when you’re next likely to be paid so that you can make repayments without defaulting on payments?
- APR - have a look at the representative APR and consider whether you’ll be able to afford to pay it in addition to your repayments.
- Additional fees - always check the terms and conditions of the loan before you agree to sign anything to access your affordability.
Borrow from family and friends
If you are struggling financially, then you can borrow from family and friends; however, you should ensure that they are also financially stable during this particularly unsettling time, as many will also be in the same position as you. The benefits of borrowing from friends and family at this time are that you won’t have to account for interest and additional fees. However, it can cause arguments later down the line, so you need to be completely transparent and upfront with whoever you borrow money from.
Use short-term credit
For short-term financial needs, you can opt for short-term credit options such as a short-term loan, overdraft or put your expenses on your credit card. However, as with most short-term financing options, you should be aware that they are designed to be used in emergencies for short periods only as interest rates reflect that. Only take out emergency coronavirus loans, or use your credit cards or overdraft if you can be sure that you can repay them.
- Only borrow from accredited lenders who are authorised and regulated by the Financial Conduct Authority.
- Don’t apply to a lot of different lenders in a short space of time, as this will affect your report.
- Do ensure that you’re going with a provider who can offer you the best rates with payments you can afford.
4. Other help with Coronavirus
How do I protect myself and my family against the virus?
To ensure that you decrease your chances of getting Coronavirus, here’s what you should do:
- Avoid touching your face, eyes, mouth
- Wash your hands frequently or use hand sanitizer if you are unable to wash your hands
- Avoid coming into close contact with others and abide by the 2m rule
- Only leave your house for food, medical supplies or to go to work if you are an essential worker
- Avoid visiting friends and family members
- Avoid all unnecessary travel
For more information on how to protect yourself and your community, take a look at this page from Public Health Matters.
I’m showing symptoms, what should I do?
If you are showing any signs or symptoms of Coronavirus, such as a high temperature or persistent cough, you should self-isolate for 14 days, avoiding contact with others, especially others who are classed as vulnerable (i.e. over the age of 70, weakened immune system, pre existing condition).
Someone in my house is showing symptoms; what should I do?
If someone in your household is showing symptoms, but you aren’t currently, you should also self-isolate for 14 days to allow the symptoms to develop if they are to do so.
Avoid going out and having contact with others, even if you are showing no symptoms.
Follow the advice on the NHS website.
I’m feeling anxious and/or depressed; what should I do?
Many will be feeling the strain of the current pandemic as both tensions concerning the virus, work and finances mount.
If you are struggling to cope with your mental health, then consider getting in touch with one of the following mental health charities or helplines:
I’m struggling to afford food, what should I do?
If you are struggling to purchase food for yourself or your household due to lack of finances or illness, you can get in contact with your local food bank or council to see whether you qualify for their Welfare Assistance scheme.