Managing your financial situation
Since the government announced the lockdown measures on March 23, our lives have fundamentally changed – how we live, work, spend our leisure time and educate our children have all been impacted.
The fall in economic activity has been significant and wide-ranging measures have been announced to help cushion the financial impact on people and businesses. The aims of these measures are two-fold: to help people in the short term, and to help the UK economy gear up again quickly when it is safe to do so.
Getting back on track
The government has pledged £38 million to charities that offer help and advice to anyone struggling financially. As the restrictions begin to be lifted, why not consider this three-point plan to access that help if you need it and get your finances back on track.
1. Understand your new financial situation
The Financial Conduct Authority (FCA) has said that the first step to managing your financial situation is to understand it. Make a list of everyone you make payments to – from utilities to home finance payments, and everything in between – recording the amount you pay, when, and whether you have fallen behind.
If you have fallen behind with payments:
- Contact those organisations to agree a way forward.
- Understand which of these are priority payments to help you save money and get back on track faster.
Where to go for help.
- For free help and support to compile the list of everyone you make payments to, information is available on the Citizens’ Advice website.
- For help prioritising payments, check out the Money Advice Service website.
2. Create a budget
Knowing your priority payments will make it easier to make a budget. A budget will help you understand the money you have available now and in the future.
If you are concerned about being able to make future payments, contact the organisations involved now to let them know. They will be able to talk you through your options so you can decide a way forward together.
Where to go for help.
- For help compiling a budget, the Money Advice Service online budget planner can help.
3. Get help if you need it
If you need help, please know that you are not alone. According to the charity StepChange, over 4 million Brits struggled to make ends meet during lockdown, and are now typically £1,076 in arrears along with facing a further £997 of outstanding payments. Help is available but you have to ask for it; don’t simply cancel payments as this automatically registers as a non-payment which can cause further issues.
There is some information below about further help and support. For a full overview of the government’s support package for individuals and businesses, please click here.
Help for Workers
According to Government statistics, 19% of British workers were furloughed in June, where they remain on their employer’s pay roll and receive a percentage of their pay, although they do not attend work.
In December last year, the Office of National Statistics estimated that the UK has more than five million self-employed workers, from sole traders, to those working in the gig economy to business owners. The Self-Employment Income Support Scheme was created to support them through the COVID-19 disruption, with grants capped at £7,500. The Scheme proved incredibly popular and within weeks of its announcement, claims had been made totaling £6 billion.
If you are a furloughed employee or self-employed and your pay has been reduced, you may be entitled to claim Universal Credit. For more information, please click here. Citizens Advice has Help to Claim advisers that can help you with the early stages of your Universal Credit details can be found here.
For emergency help with money or food, click here to see the services available.