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Coronavirus and your finances: what help can you get?

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01/06/2020
News and updates on everything to do with coronavirus and your personal finances.

The coronavirus outbreak has understandably left many people worried about their finances and anxious about what will happen to their jobs, mortgages and general household bills.

To help you understand your rights and what financial assistance is out there for you, we’ve put together this guide linking you to all the latest news.

We’ll be updating this page regularly as the situation changes and new announcements are made.

Homes

Under emergency legislation, the government has confirmed no renter in either social or private accommodation can be evicted from their home. Click here for more.

Further, all ongoing housing possessions and the court process for landlords to evict tenants have been suspended in England and Wales for three months (from 27 March), the government has confirmed.

Mortgage lenders will allow borrowers who are concerned about being able to meet their mortgage repayments to take three months of payment holidays. Payment holidays are also open to landlords whose tenants have been financially affected by coronavirus. Click here for more.

At the end of May, the Financial Conduct Authority (FCA) announced that borrowers will be able to extend their mortgage payment holiday by three months. For customers yet to request a payment holiday, the time to apply for one would be extended until 31 October 2020. For those who have already had a three-month payment break but are still having financial problems, the payment holiday could be extended by a further three months.

A number of credit reference agencies have confirmed that consumer credit scores will be protected when people have agreed ‘payment holidays’ in place as a result of the COVID-19 pandemic.

The government has published a guide to help support and encourage landlords to take a ‘commonsense’ approach to tackling housing issues such as a leaking roof, a broken boiler or a plumbing issue that leaves the tenant without washing or toilet facilities or faulty or broken appliances.

Jobs and wages

The government has unveiled a ‘Coronavirus Job Retention Scheme’ to prevent mass layoffs during the crisis. It will reimburse 80% of ‘furloughed’ workers’ wage costs, up to a cap of £2,500 per month plus national insurance and pension contributions.

The job retention scheme was due to run until June but the government has extended it until the end of October. From 1 July, employers currently using the scheme will be able to bring furloughed employees back to work on a part time basis but businesses will be responsible for paying wages while they work.

Under plans to wind down the scheme, from August, employers will have to pay national insurance and pension contributions. Then from September, the state will pay just 70% of wages, decreasing to 60% in October. Furloughed workers will continue to get 80% of their pay until the end of October, with employers making up the shortfall.

The Coronvirus Job Retention Scheme applies to those who were on the firm’s payroll as of 19 March 2020. However, workers who were made redundant as a result of coronavirus can be re-employed and furloughed by their employer. Firms can also re-recruit staff who left to start a new job, which then fell through, and furlough them under the scheme.

To help self employed workers, the government has announced the Self-employment Income Support Scheme (SEISS) allowing those eligible to receive a taxable grant worth 80% of average monthly profits based on the last three years of tax returns, up to a maximum of £2,500 a month.

A second grant will be available from August, worth 70% of people’s average monthly trading profits, capped at £6,570 in total.

Utility bills

The government and energy industry have agreed a package of measures to ensure the most vulnerable people remain supplied with gas and electricity during the coronavirus pandemic. Measures include pausing debt and bill payments. Click here for more.

Bill payers should check whether they are owed money from their energy supplier as the average amount is £100.

With millions of people forced to work from home due to coronavirus, you may be able to claim up to £6 a week for the additional expense of heating and electricity as a result.

Car finance

The Financial Conduct Authority (FCA) has confirmed firms will offer a three-month payment holiday for those struggling with car finance agreements during the coronavirus crisis.

Firms shouldn’t look to end agreements or repossess the vehicle where a customer experiences temporary financial difficulty  and they mustn’t change customer contracts in a way that is ‘unfair’.

The rules were confirmed on Friday 24 April and came into force shortly afterwards.

Overdrafts and loans

The following FCA-proposed measures which apply to banks, building societies and credit providers are now in force:

  • An up to three month payment freeze on loans, including guarantor loans, logbook loans and home collected credit, and credit cards. Alternatively, customers will be able to pay a token amount.
  • Those hit financially by coronavirus who already have an arranged overdraft on their main personal current account, will be charged 0% on the first £500 for three months. Customers without an overdraft on their main personal current account are able to request this.
  • Firms to ensure overdraft customers are no worse off on price than before recent overdraft changes came into force.

There’s also help for customers with payday loans, buy-now-pay-later (BNPL) schemes, rent-to-own (RTO) contracts and pawnbroking users.

High-cost short-term credit (payday lending) firms are to provide a one-month interest-free payment freeze to customers (measures confirmed on 24 April and are due to come in shortly).

RTO, BNPL firms and pawnbroking agreements are also expected to offer a three-month payment freeze.

Train tickets

Rail passengers with advanced or season tickets will get a full refund. Contact either your train company or independent ticket retailer – wherever you bought your ticket originally. Click here for more.

Monthly subscriptions

All live sports events have been put on hold. Sky Sports is allowing customers to pause their subscription. BT Sport customers can apply for one-month’s credit back or donate the cost of one month’s subscription to support NHS workers.

Driving and MOTs

Drivers can continue to use their vehicles even if their MOT has expired. Car, motorbike and van drivers will be given a six-month MOT exemption (from 30 March) so they can carry out essential journeys such as to work (frontline staff/key workers), shops to buy food or to help a vulnerable person.

Annual tests for heavy goods vehicles such as lorries, buses and trailers were suspended for up to three months on 21 March. Click here for more.

Parking ticket appeals have been put on ice and operators have been banned from chasing payment where an appeal has been formally lodged.

Child Benefit

Thousands of parents who had previously opted out of claiming child benefit to avoid a tax charge may be able to receive £100s from the government after losing income due to coronavirus.

Parents of newborn babies can still claim child benefit even if they haven’t been able to register their child’s birth because of the coronavirus outbreak.

Sick pay

If you are off work because you have to self-isolate, you should be eligible for statutory sick pay (SSP). The government has introduced emergency measures which mean you’ll get SSP from the first day you are off work, rather than the fourth. Click here for more.

Grant fund

Charity Turn2us launched a one-off £500 coronavirus grant fund to help those facing financial hardship due to the global pandemic. It was suspended after just a couple of days due to ‘unprecedented demand’.

However, it will re-open again once it has processed the backlog of applications.

Holidays

The Foreign and Commonwealth Office (FCO) has extended its warning against all but essential international travel for an indefinite period. See our travel refund guide for more information.

Gift card and vouchers

If you have a voucher or gift card you’re unable to use or a firm is offering credit instead of cash for a cancelled or postponed good or service, you don’t have to accept it. Consumers are entitled to their money back. See here for more on your consumer rights.

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