If you’ve watched your income reduce or evaporate during the outbreak, what help is available for you?
This article was updated on 20 March
Recently, we explored options for reducing your outgoings during the coronavirus outbreak. Taking a break from paying your mortgage, loans and credit cards could help. So could asking everyone from utility companies to your local authority to suspend or reduce payments for a while.
But even after you’ve done all that, your outgoings may still exceed your income over the next few months. So what are your options for bringing extra money in?
Coronavirus: Help for employees
The government has announced it will pay 80% of wages for PAYE employees who are not working, up to a maximum of £2,500 per month. The Chancellor placed no time limit on the payments and urged businesses to retain workers.
Coronavirus: Help for the self-employed
Support remains limited. Self-employed people have their self-assessment income tax payments deferred to 31 January 2021 and the benefits system has been relaxed and reinforced to ensure that self employed people can now access Universal Credit at a rate equivalent to Statutory Sick Pay.
Business Interruption Loans are an alternative form of income accessed through your bank and may be appropriate for some businesses. You can find more about them here. But the loans are just that – loans – and although interest will be covered by the government for six months, you will still have to repay the loan capital.
How does coronavirus affect pensions?
If you are already receiving your state pension, it will continue to be paid direct to your bank account as normal. From 6 April, an increase of 3.9% will come into force, taking your pension to £175.20 a week.
If you are already in receipt of a private pension, you may be worried about the effect of the recent market volatility on your income. It’s fair to say every pension pot has taken a hit, but for those already retired the damage is likely to be more limited as funds are typically placed in lower-risk investments such as bonds. The current crisis is, however, likely to see the value of all pension pots fluctuating over the next few months.
The effect of this is likely to be considerably greater for anyone approaching retirement who is about to buy an annuity.
For the current situation and advice, talk to your financial advisor.
Coronavirus: Can I get benefits?
Possibly. You may be entitled to Statutory Sick Pay, Universal Credit or Employment and Support Allowance depending on your circumstances. Follow the links to find out more about whether you are eligible.
Coronavirus: How are my benefits affected?
If you are already in receipt of benefits such as Universal Credit, the amount you could receive has changed:
- The Universal Credit standard allowance will increase by £1,000 for 12 months
- The Working Tax Credit basic element will also increase by the same amount
There are also changes to some of the requirements surrounding how you get UC. These include:
- Application is online
- You do not have to attend jobcentre appointments for 3 months from 19 March
- You do not have to attend the jobcentre in person to get your benefit (although centres will remain open for those who are not online, cannot use a phone or are homeless)
- Face to face health assessments are suspended
You can find more about changes to benefits processes during the outbreak here
What if I can’t manage my debts?
Even as he announced the package of financial support for coronavirus, Chancellor Rishi Sunak said that some would experience hardship. If that’s you, and you’ve suddenly found your financial commitments are far more than you can manage, there are options available, from IVAs to Debt Arrangement Schemes to Scottish trust deeds.
If you can see a point coming when you won’t be able to make your monthly repayments, don’t wait to default. Explore options to help you manage your debts and cut your monthly repayments.
The find the best route out of debt for you, contact us.