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If you are worried about the potential impact of COVID-19 on your ability to work, and therefore your financial situation, you are not alone. We’ve provided some guidance below on what you can do, and how you should prioritise your payments.
Everyone in the UK is being advised to stay at home, and to only leave their home for food, or health reasons, or to work if this can’t be done from home.
If you develop any symptoms of the virus you will need to self-isolate. This means not leaving your house at all. This will be 7 days from the start of your symptoms. If you live with other people, they will all need to stay at home for 14 days from the day the first person started showing symptoms
You may be able to claim Statutory Sick Pay if you have to self-isolate because of coronavirus; this will be paid from the first day of sickness. The rate of payment for SSP is £94.25 per week and this will be paid for a maximum of 28 weeks.
If you don’t qualify for SSP for example, if you’re self-employed, you may be able to claim Employment Support Allowance (ESA) or Universal Credit. You can find out more, and see if you're eligible here. You can also find links to benefit calculators here.
You can check whether you’re entitled to benefits by contacting a debt charity, or using a benefit calculator. You can find links to those calculators here. If you already claim ESA, PIP or Universal Credit, are self-isolating but need to renew your benefit claim, you should be able to do so without attending a face-to-face interview under temporary measures implemented by the DWP.
If you’re self-employed or run a business, you may be able to access a grant or government loan to support you through this difficult time. You can find guidance on whether you’re eligible here. VAT and self-assessment income tax payments have also been deferred – VAT by 3 months until June 2020, self-assessment payments until January 2021 – and retail and hospitality businesses won’t have to pay business rates for the 2020 – 2021 tax year.
If your employer can’t keep you in work because they can’t cover staff costs due to the coronavirus, they may be able to get government support to avoid redundancies. This is the Coronavirus Job Retention Scheme and will run for at least 3 months from 1st March.
The way they will do this is by making you a furloughed worker – this basically means that they’ll ask you to take a leave of absence rather than laying you off.
They will then be able to claim a grant of up to 80% of your wage, to a maximum of £2,500 per month.
You will remain employed while furloughed but you can’t do any work for your employer during this time. Your employer could choose to fund the difference between the government payment and your salary, but doesn’t have to.
If your income reduces as a result of these changes, you might be able to claim benefits such as Universal Credit.
This scheme is backdated so if you’ve been laid off or made redundant since the start of March, you should speak to your employer.
If you can’t work because your business has been forced to close, you may be able to access the Self-Employed Income Support Scheme.
This will pay a taxable grant 80% of your average monthly profit over the last 3 years.
It's open to anyone with profits of up to £50k and where their income is primarily from self-employment.
In order to qualify, you must have a tax-return for 2019 but, anyone that missed the return deadline in January, will be allowed until 23 April to complete it and access the grant.
Self-employed workers should be able to access this scheme by early June but, in the meantime, there is other support you may be able to access a grant or government loan to support you through this difficult time. You can find guidance on whether you’re eligible here. VAT and self-assessment income tax payments have also been deferred – VAT by 3 months until June 2020, self-assessment payments until January 2021 – and retail and hospitality businesses won’t have to pay business rates for the 2020 – 2021 tax year.
Contact your mortgage company – all mortgage lenders will allow 3 months’ payment holiday if you’re unable to pay because of coronavirus. Contact them as soon as possible – they can only help if you let them know that you have a problem. Make sure that you keep a note of any conversations you have with your lender. Also bear in mind that, if you take a holiday, you may need to increase your mortgage payment later on. Alternatively, they could be tagged onto the end of your mortgage which means you could end up paying interest on them for the remaining term. This is worth considering if you don’t really need the payment holiday, and you should check the terms of the payment holiday with your lender before you agree to it.
Similarly, if you rent, you should ask your landlord if you can reduce your rent or take a break from your rent payments. Landlords can’t start any eviction proceedings whilst the crisis is ongoing, and they’ll usually be able to request a mortgage payment holiday too so they won’t be impacted if you can’t pay rent. However, these payments will need to be paid back at some point so it’s best you pay as much as you can so you won’t owe as much later on.
If you're already eligible for a reduction in your council tax - e.g. if you receive income support, income related ESA, income based JSA, or tax credits - you may have a further reduction of up to £150 applied to your annual bill. You don't need to do anything to apply, your bill will be adjusted automatically.
If you’re struggling with your energy costs, speak with your provider. Energy providers have committed to supporting people using pre-payment meters who are self-isolating or ill with coronavirus, for example, by providing pre-loaded top-up cards to make sure their supply is not disrupted. No energy supplies will be disconnected during the crisis.
If you have unsecured loans - like personal or payday loans - or credit cards, contact your lender and ask them for a payment break. You should always prioritise your housing, council tax, utilities, and food costs before any unsecured debts. Don’t be tempted to borrow more money to cover your existing unsecured debt repayments, especially not with high cost (payday) lenders. If you do, you could find yourself struggling to meet repayments when things return to normal. If you have been struggling with your debts for a while, it may be worth seeking debt advice. You can get online debt advice here
If you’ve been financially impacted and are worried about how you’ll afford your bills, now would be a good time to take stock of your situation, and create a new, if only temporary, budget. You may find that there are lots of things that you won’t be paying for in the short-term, so your situation may look better than you think. For example, you may no longer be spending money on:
You may also see an increase to your benefits if you claim Universal Credit or Working Tax Credit. The government is increasing the basic element of Working Tax credit and the standard allowance in Universal Credit by £20 per week. This will be from 6 April 2020 to 5 April 2021.
You can download a basic budget planner here
You should also look into any activities that you’ve booked ahead (e.g. tickets for events like the theatre, trips, or holidays) to see if they’ll be sending you a refund. Most firms will have posted something on their website letting customers know what to expect.
If you’re in a debt solution, you should contact your provider – e.g. your debt management provider, insolvency practitioner or official receiver – and let them know how you’ve been affected. You might be able to arrange a short payment break, and they can let your creditors know and request that they show forbearance.
You can get help with your debts online, or by contacting us on 01925 599400.
You may be able to find a debt solution to help manage your current debts, but you shouldn’t rush into a solution, particularly insolvency, if there’s a chance that your situation could change. There are short-term options available if you’re hoping for things to improve.