With the UK economy still feeling the effects of the COVID-19 pandemic, people are naturally worried about their families, jobs and businesses. There’s a pretty long list of initiatives aimed at tackling the crisis and guiding the country through it safely. Here are the latest updates on keeping your finances healthy, and the resources that are on offer to help.
*Last updated 12th May 2021
Housing
The Bank of England's big move of slashing the UK's base interest rate to just 0.1% sent an earthquake rippling through the mortgage market. Obviously, if you're on a fixed-rate mortgage you won't have seen any change, but variable rate and tracker agreements reacted to the rate cut with a dip in the interest charged. Depending on your mortgage, you might have seen as much as a 0.65% drop in your rate, worth perhaps £40/month for every £100,000 you've got left to pay off.
If you don't yet have a mortgage, you're probably going to find the rates being charged on new deals dropping as well. Keep an eye out for what's on offer, and shop around until you find something that works for you.
For those in mortgage trouble, you might still be able to arrange “tailored support” from your loan provider. Depending on your situation, this might mean a short-term holiday from your payments, reduced payment amounts or extending your actual mortgage terms. Obviously, taking a break will increase what you're paying each month after your payments resume (since you'll still have to pay off the full amount plus interest), but it could mean some valuable breathing space in the meantime.
The first thing to do is talk to your provider the moment you realise you'll be struggling. Keep in mind that the type of support you get could end up on your credit report.
You won't generally have to “prove” that the epidemic's the actual cause of your payment problems, and your lender should be able to suggest the options that best suit your situation. For instance, taking 3 months out of your payments might end up making the rest of your mortgage difficult to afford. Similarly, if you're already behind on your payments, a mortgage holiday might not be for you.
For people who rent, it's best not to wait until you're already in deep trouble before talking with your landlord. With a bit of luck and goodwill, you could arrange a more manageable payment plan. At the very least, social renters can’t generally be evicted because of the impact of the pandemic. If you're getting benefits, it's been announced that Universal Credit and housing benefit should cover at least 30% of the low-end rents in your local area.
For those already in over their heads, it's been made tougher for private landlords to evict tenants who are unable to pay during the COVID-19 crisis. Under the new rules, you need to be given at least 6 months’ notice before being kicked out (12 weeks in Northern Ireland). There’s also a ban on bailiffs evicting anyone until the end of May in England (the end of June in Wales). Watch out, though: if you’re 6 months behind in rent with an eviction order on you, the ban won’t cover you.
Worker rights
It's a stressful time for most UK workers right now, with the threat of being laid off still hanging over many people's heads.
For people who are off work sick, or self-isolating in line with official advice, Statutory Sick Pay (SSP) is still available from day 1 of their absence instead of day 4.
Smaller businesses with under 250 employees are getting a boost, with the government footing the bill for 14 days' worth of SSP payments.
Keep in mind that you can't just decide to self-isolate and expect to get Sick Pay for it. The new day-1 rule only applies to people suffering from COVID-19, or who've been officially advised not to go to work.
Employee rights
The Coronavirus Job Retention Scheme (CJRS) has been one of the government’s boldest moves during the pandemic, reimbursing 80% of UK businesses' wage bills for employees who’ve been put on furlough. The details have shifted around a bit over the lifespan of the scheme, as has the timeline for phasing it out or cutting it off altogether.
As things stand, the CJRS is set to run until the end of September. Until the 30th of June, the government will keep paying up to 80% of furloughed employees’ wages. There’s a cap of £2,500 per month on that, though. After June, employers will have to start taking some of the strain, with the government paying 70% and leaving them to pick up the remaining 10%. As of August 2021, the government’s share will drop again to 60%, with employers chipping in 20%. Employers are still responsible for pension and National Insurance payments as normal.
Remember that being furloughed through the CJRS doesn’t mean you have to sit at home doing nothing. You’ll still be able to work part time, getting your furlough pay for the hours you’re missing out on. Just make sure you’re not actually working any of the hours when you’re supposed to be furloughed, though.
Education
UK Schools are open again, so some of the pressure’s been taken off struggling parents dealing with childcare and work hassle. There are still a few details to keep in mind, though:
Money
Of course, mortgages aren't the only kind of loan agreements people are worried about during the crisis. While you won't be seeing any drop in your credit card interest rates after the Bank of England's rate change, some providers have become slightly more flexible in their terms. Depending on which cards you have, you might be able to get emergency raises to your credit limits, repayment holidays or cancelled penalty fees if you miss a payment date. If you've got loans you're worried about paying off, it's definitely worth sending up a distress flare to your lender. You might find them willing to relax their rules a little, as long as you talk to them in advance.
While most banks bumped their overdraft rates up to 40% after a change in the rules, the move actually resulted in most people paying less than they were before. People with unarranged overdrafts found themselves getting the worst of it, though, with fees skyrocketing in many cases. However, the crisis got the banks reaching out to people with overdraft problems. Some upped their interest-free limits, at least temporarily, while at least one committed to ditching all charges for agreed overdrafts for a limited period.
In April 2020, some more help came from the Financial Conduct Authority (FCA) in the shape of a new set of rules designed to protect people during the COVID-19 crisis. Under these rules, borrowers were entitled to:
Now, though, those payment holiday schemes have ended. That means people who are struggling will need to organise some tailored support from their loan or credit providers. You should have the same types of options (and warnings) as for the mortgage help we mentioned above.
Again, it’s important to remember that a payment freeze isn’t the same as getting free money. Even though you might be able to get a payment holiday, the debt you’ve run up will still be gathering interest as normal, meaning you’ll end up paying more overall. Depending on your situation, taking up the payment freeze offer might just mean storing up bigger problems down the road.
For people with overdrafts whose finances have taken a hit from the pandemic, the basic tailored support options will probably look like this:
For credit card debts, your tailored support options should include:
Utilities
If you're using pre-paid energy schemes for your utilities, you've probably had some trouble topping up while you've been stuck in lockdown. There are a few schemes in play to get you safely through it, though, whether by nominating someone else to do your top-ups for you, posting pre-paid cards through your door or boosting the credit on your meter automatically. Get in touch with your energy provider to find out how they can help.
With water bills, some good news came in the form of a complete halt to debt collection proceedings. On top of that, a range other measures were bought in, from payment breaks and caps to wiping out debts in exchange for setting up new payment plans. Again, if you're having trouble your best bet is to talk to the company and see what they can sort out.
Travel
With most of the UK's travel plans still on hold (at least for the moment), there's cautiously positive news for people who’ve had trips cancelled because of lockdown rules. If you’ve already laid down the cash for your journey, then had it cancelled by the travel firm, you’re due a full refund. Getting it might be a bit of a pain, though.
When your flight’s cancelled, you can get your cash back within a week – by law. You might get some pressure from the company to take vouchers instead, but you’re under no obligation to accept them in place of money. For package holidays, you can technically get a refund within 2 weeks instead – although the ongoing chaos will probably make it tricky to process it that fast. For hotels and other similar bookings, you’re probably still entitled to a refund for coronavirus-based cancellations. You’ll need to contact the firm you booked with to see exactly where you stand, though, especially if they’re abroad.
Cancellations
Up and down the UK, sports events, organised excursions and even weddings have been cancelled because of the rules on social distancing. Cinemas have shut down and venues have closed their doors. There's no single way of getting your cash back for cancelled events or memberships you can no longer use. Each case is different, but most have some kind of refund policy you can fall back on.
You'll probably have to do a bit of legwork, but it's better than dropping your cash down a hole. Check your rights and claw back what you can. You might be offered vouchers or something similar rather than money – and they're worth thinking seriously about. All kinds of businesses are struggling to stay afloat right now, and any that go under are only going to make getting your money back even harder.
While we're talking about getting your cash back, some shops have been loosening up their returns policies to account for the fact that they needed to shut down for a while. If you need to return an item but can't, either because the shop's shut or you're self-isolating, get in touch with the retailer to see what their policy says.
Bills
If your Council Tax bill's looking like a mountain to climb at the moment, there's a chance you might be able to sort out a payment holiday. If COVID-19 has affected your circumstances in ways that make paying up difficult, there might be come support available, like a bill reduction or temporarily stopping any enforcement action against you. Different councils are trying different approaches, though, so it's a bit of a postcode lottery in terms of what help you'll get.
Phones
Staying in touch is incredibly important in times like these, and many of us are relying more and more on our mobile phones. Check what your phone company's doing to make things easier at the moment, and you might be surprised. Some are offering things like free calls to the over-70s or temporarily upgraded data allowances.
Scams
As always, whenever there's a big story taking over the national conversation, the scammers crawl out of the woodwork. Already, huge amounts of money have been stolen through online shopping and other coronavirus swindles, with no end in sight. These fraudsters prey on people's fears, claiming to offer things like COVID-19 home testing kits and ramping up prices because they're in such short supply. At best, you'll get nothing for your money. At worst, you've just handed the keys to your bank account to an opportunistic criminal.
Fake sellers aren't all you need to watch out for, either. Scammers are taking every chance they can to bombard people with “phishing” emails and text messages designed to get sensitive information out of you. As always, update your anti-malware programs, be sure who you're sending payment details to and never click on a link or open an attachment you're not 100% on. There's more to staying safe in a crisis than washing your hands.
HMRC warns taxpayers not to be taken in by scammers who email, text, or call, offering money from HMRC then ask for the business bank details to be confirmed.
HMRC says DO NOT click on a link in an email, or reply to a text, purporting to be from HMRC.
Self-Employed
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There are about 4.5 million self-employed people in the UK (driven down from 5 million at the start of 2020 by the pandemic), and at first the only real COVID-19 support they were being offered was streamlined access to benefits and some relaxing of the Self Assessment deadlines. All that changed on the 26th of March 2020 with an announcement from the Chancellor of the following measures:
Overall, 5 rounds of SEISS grants were announced, with the eligibility rules and amounts paid out being reassessed over time as the pandemic rolled on. With the 4th grant in April 2021, the rules on who qualified were loosened up slightly. As long as you filed a Self Assessment tax return for 2019-20 by the 2nd of March, you were probably eligible. Of course, you still needed to fit the other criteria alongside this. Even if you only became self-employed recently, if less than half of your earnings came from self-employment or you’ve been making over £50,000 on average, you’re out of luck.
For the 5th and final SEISS grant, which you should be able to claim from around the end of July 2021, only people who’ve seen a 30% drop in their average turnover will get the full 80% pay-out (again, capped at £2,500 per month). If your turnover’s dropped by under 30%, then you’ll get a 30% grant level instead, with a total cap of £2,850.
There are no specific rules on how much financial damage you need to have suffered to be eligible for a SEISS grant, but your drop in profit needs to be “significant”, and you’ll need to be able to show proof if asked.
Contact from HMRC
Anyone eligible for the scheme will be contacted by HMRC with full details on how to make their claim.
You’ll have a form to fill in online, with the cash being paid directly into your bank account.
HMRC WILL NOT contact you about this by text message, or ask for your bank details in an email. Any such messages should be reported as attempted scams.
Wondering if you can claim a tax refund or need to submit a tax return? Use our online tools to find out if you're owed money by HMRC.
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