It became very clear very quickly that the Coronavirus was going to have a significant financial impact on both the UK as a whole and the individual people who live in it. The government has been taking steps to try to mitigate this impact using a combination of direct support and working with industry to encourage or even mandate support for those who are struggling. If you are currently finding it hard to make ends meet, here are some tips on how to cope.
Make sure you are getting all the help you can
On the one hand, for some people, this may be a classic case of “easier said than done”. For example, the Coronavirus has highlighted just how difficult it can be for the self-employed to navigate the Universal Credit system. It certainly isn’t helping that the system is currently overwhelmed, as are the people who manage it. Frustrating as it may be, you do need to grit your teeth and deal with it.
Prioritise the rest of your expenses
Although the Coronavirus has significantly altered life in the UK, in some ways it’s still very much the same. When you have limited funds, you have to prioritise. Your priority is to buy whatever you need to keep going, for example, food. After that, it’s essential bills and then debts.
You need to treat your creditors as fairly as possible. You also need to keep in mind firstly that they can only get money from you if you actually have money to give them and secondly that there is an expectation and in some cases a requirement, that they show understanding if your income has been reduced due to the Coronavirus pandemic.
For most people, essential bills will be rent/mortgage, council tax and utilities/Internet/TV. If you’re renting from your local authority or your housing association, then you will probably find it relatively straightforward to arrange a payment holiday.
In the private rented sector, the situation is rather more complicated than some media articles may imply. There is, however, a ban on evictions (at least) until June. This means that tenants do have at least some leverage with their landlords. The astute and ethical move would be to pay what you can for now and see how the situation develops. Remember that landlords value good tenants and will generally be able to tell the difference between people who can’t pay because they can’t afford it, can’t pay due to temporary circumstances and just plain won’t pay.
If you’re struggling to pay your council tax or utility bills, talk to your local authority or supplier. Local authorities are effectively government entities and the utility sector is heavily regulated so there is an expectation that companies will behave reasonably. Additionally, if you believe that you are being treated unreasonably, you may be able to complain to the regulator.
For the most part, the collection of government debts has already been suspended. The exception is advance payments for Universal Credit. Anyone due to make a payment on account to HMRC in July can have it deferred.
Most consumer lenders are already mandated to show “forbearance and due consideration” to customers in financial difficulties. There are some specific arrangements in place due to the Coronavirus, such as the ability to “self-certify” your difficulties (currently) up until the end of June, but these are really twists on existing arrangements. One key point to note is that interest will continue to be applied during payment holidays (except for payday loans), so they might not be as good a deal as they sound.
If you need help or are unsure of what to do regarding debt payments, please contact us.