Coronavirus and your money

Prioritise your payments – Some bills and debts are classed as priority because the consequences of not paying are more serious than others. Priority debts should be dealt with before your non-priority debts. Don’t be fooled, non-priority debts are still important and will need paying but the consequences are less severe than priority debts. Make sure you understand the difference and act accordingly.

Speak to your bank, lender or credit provider if you think you’ll miss payments – If you contact a creditor to explain that you’re in financial difficulties, and you’re seeking help from a debt advice organisation, most companies will give you at least 30 – 60 days breathing space. Alternatively, if you need to reduce your payments to them in the short term, then ask if they’ll accept the amount that you can currently afford each month.

It has also recently been announced that having a temporary ‘payment holiday’ or ‘emergency payment freeze’ with your bank or lender because of Coronavirus problems won’t harm your credit score. This was already the case for mortgage payment holidays but now also applies to unsecured debts such as loans, credit cards, catalogues and store cards. Whilst your payments are stopped or reduced, the status of your account won’t be affected, meaning that your credit score will remain unchanged.

It’s worth noting that these changes must be agreed by your lender so they become authorised changes. If you just stop paying, or pay less then the normal amount or cancel a direct debit, then that will be reported on your credit report as missed payments. These ‘unauthorised’ changes will harm your credit score. So speak to your lender as soon as you can!

Get debt help as early as possible – If you are worried about your money or concerned that you will or have fallen into arrears then it’s always better to seek advice sooner rather than later. There is lots of free, confidential debt advice out there to support you and you don’t have to face the problem alone. Talking to someone can mean one less problem off your mind.

Coronavirus has changed how people spend and earn money. Whether you or someone in your household has been financially affected by lockdown, there are steps that you can take to look after your financial wellbeing. Use our guide to look after your finances during lockdown.

As with any change in your health, the quicker you review your finances and make changes needed, the better. The advice is changing every day, but we have summarised key points below:

What will happen if I have Coronavirus – You are entitled to your workplace’s usual sick leave and pay entitlements. Obviously, this will differ if you are self-employed or are on a zero-hour contract. You’d usually have to supply a sick or fit note from a doctor to do this, but now you’ll be able to get this by calling NHS 111.

I’m self-isolating – The advice is changing on if you have to miss work due to self-isolating – keep up to date on self-isolating on the government website.

I don’t qualify for sick pay – Then you may be entitled to benefits. The dedicated Coronavirus and claiming benefits page is being updated by the government. This page provides information on the arrangements the Department for Work and Pensions is making to support those who are affected.

Anything else? You may be entitled to council tax or housing benefit. Local authorities are getting an extra £500m for vulnerable people, and it’s anticipated that most of this will be spent on council tax support schemes. If you’re a homeowner, you may be entitled to help from a government mortgage scheme

I’ve got insurance and payment protection – Review your policy as soon as possible and get in touch with your provider if anything is unclear. Find out what you’re entitled to and how long you’re covered for.

Access emergency food at your local foodbank – Food banks provide a minimum of three days’ emergency food and support to people in crisis. They work with frontline professionals to identify people in financial need and issue them with a food bank voucher. These include children’s centres, housing associations, advice charities and mental health teams.

To be able to access a foodbank you’ll need to be referred by one of the following agencies:

• Jobcentre Plus
• A social worker
• Citizens Advice
• Children’s centres
• Local authorities
• Police or probation workers
• GPs, health visitors or other medical professionals

If you aren’t already in touch with the agencies above, you can get in touch with your local foodbank to ask for help. They’ll work with one of their referring agencies to arrange an appointment with you. Once you’ve been referred to a foodbank, they will give you a voucher which can be exchanged for a parcel containing a minimum of three days’ nutritionally balanced food.

The Trussell Trust has over 1,200 foodbanks across the country. You can use their website to find your local foodbank.

Find out if you qualify for emergency funding – You may be able to apply to your local council / authority’s Local Welfare Assistance Scheme. These local funds assist people in crisis situations and support independent living.

Local councils / authorities sometimes have slightly different names for this funding, so also look out for:

• Emergency support scheme
• Local support scheme
• Community and crisis support
• Discretionary local support scheme

These schemes are usually available to people on a low income that are facing financial difficulty. Each local authority runs their own scheme with different qualifying criteria. They may also provide different things such as grants, loans, referrals to credit unions for loans or providing goods such as fridges, prepayment cards or vouchers.