What you really need to know to help you out financially during this pandemic
With the coronavirus lockdown putting plans on hiatus, devastating the economy and causing nationwide job uncertainty, you’re not alone if you’ve suddenly find yourself in a precarious position when it comes to your finances.
There’s a lot us in the same boat, wondering where to start in terms of arranging our budgets to fit these uncertain times. And if you don’t have an emergency fund (which experts say should be around three to six months’ income), don’t panic because we spoke to Barclays Director of Savings Clare Francis who’ll help ease your financial stress.
So whether you’re in a flat share or a family trying to balance the books, these nine tips may help stop any sleepless nights.
1. Ask for help as early as possible
It’s important to remember there is support available. The Government has announced lots of measures to help people who might have lost their job or self-employed people who have seen work dry up. If you are in, or think you might be, in financial difficulty, it’s important you talk to your bank as early as possible.
If you’re self-employed and self-isolating or caring for a child who is ill, and you aren’t on any benefits, then you may be able to get Employment and Support Allowance or Universal Credit. Find out what benefits you may be able to access at entitledto.co.uk.
2. Making mortgage and rent payments
Get in touch with your bank before you miss any payments on things such as mortgages, loans and credit cards as this may affect your credit score and limit your options in the future.
The government announced on 17 March that all mortgage providers should offer a three-month payment holiday to anyone affected by coronavirus. These range from mortgage payment holidays through to freezing interest rates. Barclays, along with other financial institutions, have introduced new measures to help support people during this tough time.
If you are worried about rent: the government has brought forward emergency legislation to protect you from eviction if you can’t keep up with payments – new rules mean they cannot evict you for at least three months.
3. Tackling credit cards and other debts
Companies have put measures in place to help those struggling because of the pandemic. If you have debt, such as credit cards and loans, call up your providers and explain to them you are struggling to make payments. The Financial Conduct Authority has suspended its credit card persistent debt rules. This means providers cannot cancel your card until at least October. This will give some relief to those relying on credit for everyday living costs.
Coping with an overdraft: Talk to your bank to see what it can offer you. Barclays has, for example, waived one months’ interest on overdrafts for customers.
4. Accessing fixed savings
There is usually a penalty for withdrawing money before the fixed period ends, however many institutions are now dropping this charge. Only withdraw your savings as a last resort.
5. Now’s the time to reboot your budget
If you’re facing a reduction in income or are worried about your job security, take a good look at where your money is going and see if there are any ways to make cutbacks to try and make things a bit easier.
Take a really close look at all your outgoings and cut back on any non-essential spending. One idea is to put away any money you’re saving from limited travelling, eating out and other events into an emergency fund.
If there’s one bit of good news, the fact we can’t go out should mean we spend less and therefore have a bit more money to save. This is an ideal opportunity to hit the reset button and think about what lifestyle changes you can keep up once things are back to normal.
6. Search around for the best deals
Take advantage of this time to see where else you can save. When was the last time you switched your energy provider, for example? It’s worth reviewing your household bills to see if you could save money by switching to a cheaper deal. And even if you are juggling work and childcare, it could still be worth doing as you’ll probably find you can save yourself hundreds of pounds a year.
7. Avoid the temptation to splurge online
It’s easy to get bored and start buying things you don’t really need. Who else has an inbox and social media stuffed with tempting offers, but research from Barclays reveal we sacrifice nearly £400 each a year of potential savings by spending on items we see on social media.
8. Stay home and save
Planning your meals throughout lockdown can have a number of benefits: not only does it mean spending less, but if we’re only going out to buy the essentials, it’s also an opportunity to use what you already have at home.
And when you do venture out, try using the social money app Pingit. The app has introduced a new limit on contactless transactions, raising the amount from £30 to £45. This new limit will help you make quicker and more seamless transactions as well as not handling as much cash, cutting the chances of the virus being transferred.