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Eight months after the Spring 2020 lockdown and coronavirus is continuing to impact our day-to-day lives.
As well as being responsible for new laws, protocols and expectations – the pandemic has left an entirely new personal finance market in its wake. It includes new benefit schemes and payment breaks from mortgages to car insurance.
Now and always, it pays to ensure you are on the best deals for all household bills, from your energy bills to car insurance. You could save hundreds of pounds a year – and switching is super-fast and simple.
If you have lost earnings as a direct impact of coronavirus, a raft of government help is on offer. Here are the key schemes summarised:
- If you are employed and furloughed, the Coronavirus Job Retention Scheme will pay 80% of your wages up to £2,500 a month. This scheme has been extended until the end of March 2021
- From 1 November, the Coronavirus Job Retention Scheme was due to be replaced by a new Job Support Scheme. This has now been postponed
- If you are self-employed, you can apply for the Self-employed Income Support Scheme – a taxable but non-repayable grant. Grants will be paid in lump sum instalments each covering three months. The next grant covers a three-month period from the start of November 2020 until the end of January 2021. You will be paid 80% of your average monthly profits, up to a total of £7,500. To qualify you will need to be currently eligible for the scheme and actively trading. The second grant will run from February 2021 until April 2021.
- Firms in 'high' coronavirus alert level areas, primarily in the hospitality, accommodation and leisure sector, will be able to apply for grants worth up to £2,100 a month
- If your self-assessment tax bill is due by 31 January 2021, you can now opt to pay it over the following 12 months instead
- If you run your own small- to medium-sized business, you could apply for the Coronavirus Business Interruption Loan Scheme. The loan is interest- and fee-free for the first 12 months, during which time you will also not be required to make loan repayments
- Alternatively, you can apply for the government’s Bounce Back Loan which lends up to 25% of your turnover up to a maximum of £50,000. There is no interest or fees to pay for the first 12 months
- Under a new Pay as you Grow system, repayment terms on both the Coronavirus Business Interruption Loan Scheme and Bounce Back Loans can be extended from six years to 10 if you are struggling
For more on help for your business – ranging from Future Funds loans to relief on business rates – head over to our dedicated coronavirus business insurance page.
Financial regulator, the Financial Conduct Authority (FCA) has set down payment breaks on a raft of household finances if you’re struggling with the financial impact of coronavirus. We’ve set them out below:
Mortgage borrowers who are struggling financially due to the coronavirus pandemic but have not yet had a payment holiday can apply for a deferral on their monthly payments. Payment holidays can last up to six months.
Borrowers who already have a payment deferral in place for less than six months can reapply to extend their payment holiday. This means customers can have a payment holiday up to a maximum of six months.
Mortgage borrowers who have benefitted from a six-month payment holiday but are still experiencing financial difficulties should speak to their lender. The FCA has proposed that lenders must offer further ‘tailored’ help on a case-by-case basis. However, borrowers who take this further round of support are likely to have it logged on their credit report.
Interest will continue to accrue during any mortgage holiday which will be added onto your monthly repayments once they resume. Use our mortgage payment holiday calculator to see what your new repayments might look like.
And for more information, head to our dedicated coronavirus mortgage guide.
You can apply to your credit card, store card or personal loan
provider for a payment holiday which could last up to six months. This is for borrowers who have not yet had a payment deferral under the previous FCA guidance which ended on 31 October. Borrowers who have already had a payment holiday under the previous rules can apply again for a second deferral if they are still struggling.
The same applies if you are struggling to make payments on catalogue debt, buy-now-pay later loans, rent-to-own and pawnbroking.
You can apply for a payment holiday on your car repayments which can last up to six months. Those who have already benefitted from a payment break can also apply again for a further deferral. Vehicle repossessions are also held off.
If your driving licence runs out between 1 February and 31 December 2020, you will automatically be granted a 11-month extension, starting from the date of expiry.
From 14 September 2020, the period during which driving tests will be available will be extended from six to 18 weeks. The DVLA has also allocated 395,000 more driving test appointments between then and 31 January 2021.
The government’s six-month extension for MOTs due between 30 March and 31 July 2020 has now ended, and you will need to book in your MOT as normal. Government guidance for England’s lockdown beginning on 5 November has so far made no mention of garages, servicing or MOT centres being required to close.
If you are struggling to make monthly payments on insurance premiums – which includes car, home, travel, life and critical illness and even boiler cover – you can contact your insurer and ask for help.
Help could take the form of a temporary reduction in cover, a change of policy that results in cheaper premiums, or a payment holiday.
Note however that, under FCA proposals, you may NOT be able to extend an existing insurance premium payment holiday beyond three months. Instead your insurer should offer ‘tailored’ support in other ways, such as agreeing lower monthly payments.
Get in touch with your bank if you are having financial difficulties with your overdraft. The FCA expects firms to provide ‘tailored’ support to customers who ask for help. This might include waiving or reducing interest payments on an overdraft, agreeing a plan to reduce the overdraft limit in manageable stages or support customers to reduce an overdraft by transferring the debt.
Customers who have had interest payment holidays on their overdraft already should speak to their lender if they are still experiencing difficulties. Banks are expected to continue to offer tailored support. The FCA has said it expects banks to get in touch with customers who have already received temporary support to see if they still need help.
Where borrowers need further support or access help for the first time this will be reflected on credit files.
If you have not requested an interest payment holiday on your overdraft, bear in mind you could soon be paying more in interest.
Separate FCA legislation implemented in April – but delayed due to coronavirus – ruled that banks must charge a uniform APR of around 40% on both arranged and unarranged overdrafts. The objective is to make it is easier to compare accounts.
The freeze on the implementation of the rules has now been lifted and many major banks are beginning to charge the new rates.
If you have a prepayment meter which you are unable to top up due to having to quarantine, firms have agreed to load credit onto your meter either remotely or by posting a top-up card to your address.
If you have a standard credit meter (ie, you pay monthly for your energy once you have used it), your supplier must offer some leeway if you are unable to pay for reasons related to coronavirus.
Help will be offered on a case-by-case basis, but energy regulator, Ofgem has ruled that energy firms must continue to supply gas and electricity to customers who are not able to pay.
If you are struggling to pay your broadband bill, get in touch with your provider – industry regulator, Ofcom has ordered broadband companies to keep customers connected where they are struggling to pay as a result of coronavirus.
Some providers, including BT/EE, Openreach, Virgin Media, Sky, TalkTalk, O2, Vodafone, and KCOM, have also agreed to remove data allowance caps on all existing fixed broadband services, as well as offer improved mobile and landline packages.
If you are vulnerable or self-isolating your provider should alternative methods of communication wherever possible if it’s unable to carry out repairs to fix broadband and landlines.
You will still be able to switch broadband provider as the process is usually carried out remotely.
If you are switching from a cable supply however, there could be a delay due to a backlog of requests resulting from lockdown.
The government has introduced other concessions too, designed to get people over both the immediate and ongoing financial effects of coronavirus.
Protection against eviction for private and social housing tenants in England and Wales ended on 20 September 2020. This means that tenants who were served notice between March and August can now legally be evicted.
However, if tenants in England receive an eviction notice after the 28 August, they will be protected by a change in the law from that date which extends notice periods to six months. The extension will stand until at least 31 March 2021.
In Wales and Scotland, tenants must already receive a minimum six months’ notice while in Northern Ireland it’s 12 weeks.
Private and social housing tenants in Northern Ireland and Scotland will continue to be protected from eviction until 31 March 2021.
The starting threshold at which stamp duty kicks in has been lifted from £125,000 to £500,000 in England and Northern Ireland until 31 March 2021, saving buyers up to £15,000.
The threshold for the equivalent property taxes in Wales and Scotland have been raised to £250,000 until the same date.
Find out more about stamp duty and the temporary changes with our guide.
Homeowners and landlords in England can apply for a Green Homes Grant from late September to put towards the cost of energy-efficient improvements.
The scheme will pay two-thirds of the cost, capped at £5,000. Low income households will be able to claim for the full amount of the work up to £10,000.
The rate of VAT applied on most tourism and hospitality-related activities including food and accommodation will be cut from 20% to 5% until 12 January 2021.
The Eat Out to Help Out scheme which offered a 50% discount at some cafes and restaurants, ended on 31 August – but look out for continued individual offers.
Irrespective of coronavirus, there are a few simple – and free – measures you can take of your own to reduce the money that leaves your household.
Switch your energy
You could save at least £286* a year by switching to a better deal. The process takes around five minutes and, as the new provider will use the same pipes and meters as your current one, your energy supply won’t be disrupted.
*51% of customers that applied to switch via MoneySuperMarket could save at least £286.50, June 2020
Don’t auto-renew your home and car insurance
The same rules apply to insurance for your car and home insurance. Switching is likely to work out a lot cheaper than auto-renewing your current policy – in fact, for motor cover alone, you could save up to £284* a year.
*51% of consumers could save up to £284.51 Consumer Intelligence, June 2020
Pay less for debt
If you’re paying expensive interest on credit card debt, consider switching the balance to a 0% balance transfer card. It means you can spread out the cost – for more than two years in some cases – without paying interest.
The new card will need to be from a different provider, so check your eligibility before you apply. You may also be charged a transfer fee depending on the deal.
Switch mortgage deals
If your current mortgage agreement is due to expire, look at remortgaging to one with a lower rate of interest. Alternatively, find out if your current lender can offer a better deal – known as a product transfer. Savings can amount to hundreds of pounds a month depending on the size of your loan.
Even if you’ve taken advantage of all the help you can, you may still be struggling to make ends meet – especially if you have been long-term furloughed or lost your job entirely. Equally you may be worried what will happen when available government help and schemes come to an end.
Worrying about paying bills can feel crushing – but take comfort that you are far from alone. Free, expert and impartial help is available through registered charities such as StepChange.
Visit its website or call its experts for free on 0800 138 1111. They will tailor advice to your individual situation and provide help for as long as you need it.
The charity has warned that it’s encountered imposter firms which are most prevalent online – so ensure you click through from the link provided, above.
Holidays and overnight stays – in the UK and abroad – will not be allowed during the England-wide lockdown which starts on 5 November. This lockdown, which applies across England, is due to end on 2 December. Only travel for work or education will be permitted. Wales is in a national lockdown until 9 November.
Outside of full lockdown the Foreign, Commonwealth & Development Office (FCDO) regularly updates its list of overseas destinations that are deemed safe for travel – and from where you will not need to quarantine for 14 days on arrival back to the UK. These are called safe travel corridors.
The list of travel corridors changes frequently as coronavirus risks continue to change across the globe, so check the FCDO website for up-to-date guidance.
You’ll find more information around travel and travel insurance at our guide.