Coronavirus and Your Finances: This is The Help Available

This is a really worrying time for a lot of reasons. The health of people around the world is the biggest concern, but financial worries are coming in as a close second with a huge number of people losing their jobs or having to take pay cuts.

The government is doing what they can to help the British public through this difficult time. This article will go through some of the help that has been put in place so far.

Mortgages

Interest Rate Cuts

Mortgages are a big topic at the moment, and the market has definitely been shaken up with The Bank of England cutting their base rate to just 0.1% - the lowest in history.

Payment Holidays

If you’re struggling financially because of the Coronavirus, then you should be able to apply for a three-month mortgage payment holiday. Most banks entered into an agreement with the Chancellor on 17th March 2020 to help those who are struggling by offering to suspend mortgage payments during this time. This is applicable to residential and buy-to-let mortgages.

In order to apply for this payment holiday, you will need to have made all of your mortgage payments up to this date. If you are already in mortgage arrears then you are unlikely to qualify for a payment holiday, but your lender should look at other options to help you.

If you take a mortgage payment holiday, you will have to make up for those missed payments later down the line. This will either be in the form of increased future payments, or an increased mortgage term.
Having a mortgage holiday will not affect your credit score as it will be pre-agreed with the lender, so the account won’t go into arrears. 

Rent

Suspension of new evictions

The government has recently announced new emergency legislation to stop all new evictions for the next three months. This means landlords are not allowed to apply to the court to start eviction proceedings during this time frame – all social and private tenants are included.

If you are renting from a private landlord, then they should be able to apply for a three month mortgage payment holiday, so they shouldn’t be putting any pressure on you to pay rent during this time if you’re struggling financially because of the Coronavirus.

If you are still struggling with income and are unable to make rent payments after three months, then your landlord should work with you, take your financial circumstances into account, and work out an affordable repayment strategy before starting any court proceedings.

Loans, Credit Cards and Overdrafts

Loans

As well as mortgages, a lot of banks are offering help to those struggling to pay back secured and personal loans. Some banks are offering payment holidays, while others are offering reduced payments or are waiving fees for missed payments.

To find out what your bank or lender is offering, make sure to contact them directly as soon as possible.

Credit Cards

Credit card rates are unlikely to be affected by the Bank of England base rate changes as they are a lot higher than that anyway. However, just like mortgage lenders, credit card providers are also offering some help to people having financial difficulty. Again, some providers are allowing payment holidays, waiving fees on late payments while some are offering emergency credit limit increases.

If you’re currently experiencing financial difficulties, then contact your credit card provider as soon as possible to see how they can help.

Overdrafts

For people relying on overdrafts, there doesn’t seem to be any changes happening at the moment, and actually banks are still set to increase their interest rates on 6th April, in line with the FCA changes. However, with more pressure being put on banks to help those in trouble, I don’t think it’ll be too long before we see some changes for overdrafts. If you are currently using your overdraft and you have worries about being able to pay it off over the next three months, contact your bank as soon as possible to see if there’s anything they can do to help.

Council Tax

For people who pay their Council Tax in 10 monthly instalments, payments will be due again in April. If you contact your local council many are allowing customers to move their April and May payments to February and March next year, giving you a breathing space for the next 2 months. 

It’s important to contact your council if you are in difficulties as if you miss a payment they may ask you for the full yearly amount in one payment. 

If you think you are going to be unable to make your council tax payment during this uncertain time, make sure to contact your local council as soon as possible as they should be able to help you, especially if your financial difficulties are a result of Coronavirus.

Gas and Electricity Bills

If you’re on a prepayment meter, companies are now offering help to people who are unable to top up due to financial strain, or because they are in isolation and can’t go out. Energy providers are sending credit to customers through the post, automatically topping up customers’ meters, or are sending people out to top up meters on their customers’ behalf.

If you’re on a normal meter, phone up your provider to let them know that you may have difficulties before you miss a payment. They will be able to help you by setting up an affordable repayment plan, and they should also assess your current tariff to see if it’s best suited for your current needs. Even if you’re in arrears, you can switch providers to get a better tariff.

Water Bills

Water companies across the country are now providing extra measures to support those struggling financially because of a loss of income due to the Coronavirus. The support you’ll get will depend on your circumstances and will be judged on a case-by-case basis. Some of the available support includes payment holidays, adjustment of payment plans and stopping any new court applications on unpaid bills and stopping enforcement action. Contact your water provider as soon as possible to find out how they can help you.

Vehicle Finance

If you know you’re going to struggle with your vehicle finance, make sure to contact the company as soon as possible and before you miss a payment. They should be able to reach some kind of agreement with you to help you through this situation, especially if you’ve never missed a payment or been in financial trouble before.

Refund Entitlements

Cancelled events

Now the UK has entered into a partial lockdown, sporting events, shows and concerts due to take place in the near future are being cancelled. Most companies should give you a refund in this case, for example Ticketmaster has already stated that for all events that have been cancelled due to Coronavirus, all ticket holders will be refunded. However, check the terms and conditions with the company you purchased tickets from to see what you’re entitled to – be aware that you may not be refunded for any booking or delivery costs.

Train tickets

Since Monday 23rd March, the government temporarily took over rail operators and now only very limited services are running. The good news however is that nearly all tickets can be refunded. Daily advanced, peak or off-peak tickets can be fully refunded, and you can also claim a refund for the part not used on a season ticket. Many firms have waived the admin fee for cancelling or rescheduling tickets but check with your ticket provider as some are still charging.

To claim a refund, contact the company you purchased the tickets from – most will allow you to do this online.

Subscriptions

Some companies where customers set up a subscription or pay them via direct debit for a monthly service have allowed customers to pause their contract.

Sky Sports is one example, as there is currently no live sport, they are allowing customers to pause their subscription which means your subscription will stay in place, but you won’t be charged for now. They will reinstate your subscription and take payment when live sport resumes. BT Sport are have advised customers to contact them to discuss options.

Odeon has also said that all customers who pay for their Limitless membership will have their payments paused until their cinemas reopen.

If you’re paying a gym membership or a direct debit to any other company where you cannot use their services due to Coronavirus, you should contact them as soon as possible to see if you can pause your membership or if they can do anything else to help.