The spread of the Covid-19 virus around the globe and the subsequent lockdown and social distancing measures implemented by the government will have had a significant financial impact on many people which will potentially make it hard to make ends meet. There are, however, some things that you can do to minimise the financial impact and we will take a look at some of these in this article.
If you have a mortgage, this is probably your biggest expense every month but potentially also the most important one. As part of the Government measures, banks are now offering anyone financially affected by the virus a payment holiday of up to three months. Because the banks have reduced staff to assist with the administration of these holidays, the best way to apply is to go to your mortgage lender’s website and apply online. The vast majority of lenders will have an online application system. Bear in mind when considering a payment holiday that your payments after the holiday are likely to be higher as interest will still accrue and you will still have to pay off the same amount over a slightly shorter period.
Credit card and loan repayment holidays
The FCA announced that it was also working with lenders to organise a freeze on consumer credit card and loan repayments for up to 3 months without adversely affecting anyone’s credit status. This came in to force on the 9th of April and the majority of large lenders signed up to the agreement. You should check your lender’s website for ways to apply for the repayment holiday on any loans and credit cards you hold. Remember that the same applies here as for mortgages and interest will still accrue so you will owe more at the end of the freeze. Bear in mind that your lender will assess whether a freeze is the best option for your individual circumstances and might offer you an alternative. Originally this freeze did not cover payday loans, car financing or pawnbroking loans but this is now being looked at and it is hoped that new rules will be in place later in April so make sure to keep an eye out on any updates regarding these types of loans and credit agreements.
Check your Council Tax
Some, but certainly not all, councils are allowing a council tax holiday which means that you might be able to start paying your council tax in July rather than May and June. You will have to check with your local authority as this holiday has not been universally adopted.
Set out a budget
Look at all your monthly outgoings and prioritise them in order of importance from “must be paid” to discretionary. Look at all the things you spend money on which you could cut back on like takeaways or other luxuries. It can be quite eye opening to do this exercise and see where your money goes. OK, it won’t be pleasant to have to cope without some treats for a period of time, but it is only temporary to help make ends meet.
Despite the outbreak of Coronavirus, changing utility providers for gas, electricity and even broadband and TV packages should not be affected. If you are coming to the end of a fixed tariff period or are not on a fixed rate, investigate cheaper deals which could save significant amounts of money. These changes will take a few weeks to kick in so the sooner you start the better. You can use websites such as Uswitch to help with this.
If you are struggling to make ends meet no matter how hard you try, then speak to your creditors as soon as possible to see what assistance they can give you. In these hard times they will certainly do whatever they can to help you.
We are living in very uncertain times and there is bound to be a lot of financial anxiety around. There are ways of reducing your outgoings which should go a long way to helping you balance the books. The help you can get is changing regularly so ensure that you keep up-to-date with any changes and whatever you do, do not stop or reduce payments to any lenders until you have spoken to them and have their agreement in writing.