More detail on this report by Martin Lewis can be found by clicking HERE
The UK sadly, rightly, importantly is shutting down. Apart from for necessary work, groceries, medical appointments, caring and once-daily exercise, we should all stay home. This has a mountainous and potentially catastrophic impact on people’s livelihoods, income and finances.
Things are changing constantly. We’ve seen a staggering number of announcements in the last week alone, each of which in normal times would be blockbuster news. To bring you up to speed, I’m going to briefly detail the NEW need-to-knows here, but use the guides for far more.
The new coronavirus need-to-knows
1) SELF EMPLOYED/FREELANCE? Try to hold on – the support package should come this week. There’s a real feeling of panic growing among the UK’s self-employed. While there are some measures in place, they’re simply not enough yet, so I’ve two important points…
a) I have it officially CONFIRMED the Govt is working on a further support package (some reports say it’ll be as soon as Wed, but it’ll almost certainly be by Fri). I don’t know what it is, but suspect it’ll be on a par with the 80% of your salary up to £2,500 for employees. So hold tight, and don’t make any drastic decisions until that’s announced.
For more, and for updates when we get news, see our self-employed coronavirus help including my video briefing.
b) Check the measures already in place to see if they can help, including deferring tax payments and claiming employment support allowance if you’re sick. Plus crucially, don’t dismiss universal credit (see below for why).
2) EMPLOYEES. Can’t go to work or have no work to do? Ask your employer to ‘furlough’ you and Govt will cover 80% of your salary up to £2,500/mth. This is officially called the Coronavirus Job Retention scheme, and it means employers can choose to put staff who can’t work on ‘furlough’ (on hold) – and then the Govt will cover their salary.
Think of this like a job being put on standby. The idea is you go into sleeper mode during the crisis, and then when it’s over, they can instantly restart things and get the economy running again at speed.
It’s up to employers to decide and define who is furloughed. It could be because you’ve no work to do (eg, you work in a closed restaurant), or as you have to be at home to look after children or you’re self-isolating.
The key thing to understand is the state is looking to support people. It wants this to be a broad sweep of support to gather people up. It’s looking to embrace people who need it, not loophole them out. See our employee furlough info, including my 5min video briefing.
3) If you lost your job due to coronavirus, or were in the process of changing jobs, furlough may still be available. Before the furlough support was announced, many people were laid off by panicking firms. If that happened, speak to the firm – they are allowed to take you back on, to furlough you.
Of course, this is up to employers, and so I’d urge all employers to do what you can – you’re not playing fast and loose doing this, you’re doing what’s intended. Though of course there will always be the rare few who sadly don’t get it or don’t care.
4) Don’t dismiss universal credit. The changes are bigger than you think – especially for housing costs. Universal credit is a benefit available to many who are employed, self-employed, unemployed or on low incomes (but usually not pensioners), provided you’ve less than £16,000 savings in your household.
Last week, most people focused on the ‘£1,000 more a year’ increase, which of course is only £20/week, but that’s just the standard allowance. The housing allowance – which can cover rent, mortgage interest and service charge – has been unfrozen, so payouts can be larger (owner-occupiers can get help via support for mortgage interest payments). For example, in one London borough, for a two-bed home the max was £1,390/mth, it could now be as high as £1,550/mth.
Overall, some may be eligible for £1,500+/mth, and as there’s no tax taken off. That’s getting close to the max furlough payment for employees.
I know many are scared of sanctions and are worried about universal credit, but the strong message I’m getting from the DWP right now is don’t be scared, they want to provide support this way. For more help, read our coronavirus universal credit explained info and use our 10-min benefit check.
5) ZERO-HOURS CONTRACT? Help depends on how your contract is structured. If you’re paid through a payroll, you could be eligible for help as a furloughed employee (if so, your salary may, we think, be based on your Feb income – though that’s to be confirmed – and there may be wriggle room if that was a particularly bad month). Otherwise, you may be due self-employment help (we need to wait and see), and definitely check out universal credit information too.
6) Renters, you can’t be evicted for 3mths, and landlords can get help too. As well as universal credit housing help, new rules mean landlords in Eng/Wales won’t be able to start new eviction proceedings for at least the next 3mths, protecting private and social tenants – while in Scot, private and social landlords will have to give an increased 6mths’ notice before taking steps to evict a tenant. We’re still awaiting rules for NI.
Private landlords are also now eligible for a 3mth buy-to-let mortgage payment holiday if their tenants are experiencing financial difficulties. Technically they needn’t pass this on to their tenants, but morally they should and most will, so speak to your landlord if you need help. See renters’ help.
If your landlord doesn’t have a mortgage, there’s no help and they may be relying on your rent as their income. If so, and you’re both struggling, try to find a way to “meet in the middle” and work through it together.
7) Now 5 major lenders let you apply for a mortgage payment holiday ONLINE. If you are struggling to pay your mortgage, lenders will allow you to take a break on paying for 3mths. Now many let you apply online, and some hear back in minutes. For full help, including exactly how mortgage holidays work, see our how to apply for a mortgage payment holiday info.
Please DON’T call banks or HMRC unless you’re vulnerable or have urgent need – go online & end the 10hr waits
I’m not normally the person who sticks up for banks, but they’re a priority service right now for many who face financial desperation. They’ve also had to rewrite decades of policies within days, and adapt their staff to new working conditions.
Unsurprisingly that means call centres are clogged up, and I even heard of 10hr phone queues. So please do everything you can online. If you need to call, do it when needed (eg, only ask for a mortgage holiday if your direct debit is due within 7 days). If not, let those with more pressing needs go first.
The same applies for HMRC and other helplines. This way, those who need help urgently get it quickly, and it protects the vulnerable who may not have online access.
8) Check your mortgage rate and sort your savings. The UK base rate was cut again, to 0.1% – the lowest in 325yrs. Those on trackers and variable rates should see their mortgage payment reduced (see mortgage lender-by-lender cuts) by about £40/mth per £100,000 of mortgage if you add both cuts in the last two weeks. For those free to remortgage, it is also worth checking if you can cut your mortgage cost.
Of course, things continue to be dire for those with savings, but act now to lock in better savings rates.
9) HSBC is giving £300 overdraft buffer – others may follow. Terrible timing means from Mon 6 Apr (earlier for some), regulation changes have resulted in almost all lenders charging about 40% EAR on overdrafts, nearly double high-street credit cards, making overdrafts the new danger debt.
HSBC has said to help with coronavirus it’ll automatically increase buffer zones (which let you go overdrawn interest-free) on its Bank and Advance accounts, from £25 to £300 for 3mths from Thu. I hope others will join, but if you’re struggling, see our full overdraft coronavirus help. Also see help on loans and credit cards.
10) Energy bill help. Disconnections are suspended for customers of all providers – most are pushing back bill dates (and British Gas has confirmed it’s removing late payment charges) for those struggling financially. We await to hear others’ plans. (Also see Brit Gas cheapest deal since 2016 below).
If your energy bill is a struggle, see our full energy bill help, and if you’re on prepay and worried about running out of credit while in self-isolation, see energy firm-by-firm prepaid top-up help.
11) Sky Sports customers CAN now pause their subscription. Subscribers to Sky Sports (though not BT Sport) can now pause Sky Sports payments while sport is suspended.
Scammers are vicious, immoral scum – it makes you weep
Low-life scammers are taking advantage of coronavirus to try to defraud people, especially the elderly and vulnerable. The National Fraud Intelligence Bureau says it’s already identified over 100 reports of fraud relating to coronavirus, with victims’ losses totalling almost £1 million.
Classic scams include calling saying: “This is your bank, we’re struggling due to coronavirus, so we need to move money to a new [scam] account.” Spread the word. Be vigilant. See how to spot coronavirus scams. And if you need one-on-one support, go to Citizens Advice Scam Action.
12) Almost all train tickets are now refundable. Anyone with an advance ticket can now get a refund. Season ticket holders can get the unused portion of their ticket back but may have to pay a £10ish admin fee. See how to get a rail refund.
13) Shops are extending their returns policies. For example, H&M upped its from 28 to 100 days for items bought in-store and online, so you’ve time to get things back during lockdown. See who’s extended return rights.
14) Struggling with council tax? Speak to your local authority. Some councils are offering forbearance, eg, Telford & Wrekin Council is letting residents defer Apr’s and May’s payments (though you’ll have to make it up later in the year). See council tax holidays.
15) Contactless card limit increasing from £30 to £45 on 1 Apr. This is to reduce personal contact, though it may take some time to filter through to all retailers. Contactless limits often don’t apply to mobile phone contactless payments. See contactless update.
16) Can’t get to your MOT? Change possible this week. If your MOT runs out, and you can’t get an MOT as the local test centre is closed/you’re stuck self-isolating, currently the only option is to get a SORN and take your car off-road. We’re expecting to hear a change this week, likely to soften this stance – updates in MOT help.
Don’t be afraid to ask for or give help. We all need forbearance – this is a time for compromise.
No apology for repeating my call that forbearance must be the word of the moment. Both in its plain sense to be patient or forgiving, and its technical meaning not to enforce legal rights including debt repayment.
Individuals are struggling right now, with huge income shocks. If you run a business or are a landlord, please show forbearance, try to work through something that causes the least worst outcome for both, so we can all get through this.
Yet firms are struggling with income shocks too, and even the Govt is facing enormous logistical issues, changing decades-old policies and work practices in hours.
So we must try to show them (yes, even Govt – which ultimately is still politicians and civil servants, ie, people, working under great pressure) patience, compassion and forbearance too.
17) Life insurance & income protection should still cover coronavirus. Not nice to think of, but we’ve had many ask us if life insurance policies will still cover coronavirus. Yes (unless someone took one out while they had it). The same should be true with income protection policies. However, most critical illness policies won’t define coronavirus as a critical illness. See insurance latest.
18) Package holiday or flight cancelled? You’re due cash, not vouchers – but that could change. When package holidays or flights are cancelled, the rules state you’re due a full refund. Yet many firms are currently trying to direct you towards taking vouchers. Of course, if you’re happy with vouchers then take them, as we need to support travel firms right now – but if not, you are due cash.
Enforcing that is tough though, as it may need court action. Plus travel expert Simon Calder has reported that the Package Travel Regulations may soon be suspended, meaning you only get vouchers for package hols. Full help in our Coronavirus Travel Rights guide.
19) Water bill problems. Trade body Water UK is today announcing it is working with water firms to arrange payment breaks, payment holidays and more for those struggling. See water bill help.
That’s it. Please stay safe, stay healthy, stay at home if you can, take care of each other, be forbearing – and try to find as many silver linings and smiles in this cloud as you can. Martin.