A large chunk of the nation has seen their finances impacted by coronavirus, with more expected to be hit in the coming weeks and months. But what can you do during this time and where can you find help? We answer the big questions in this article.

MY INCOME HAS FALLEN, CAN I STOP PAYING MY MORTGAGE?

Banks have to offer a three-month mortgage holiday – which means stopping your monthly payments for up to three months – if you’ve been affected by coronavirus. You can read more about the pros and cons and how it works here. 

MY INCOME HAS FALLEN, CAN I STOP PAYING RENT?

You need to talk to your landlord, don’t just stop paying your rent. Landlords who have a mortgage can take a payment holiday from it and then pass on that monthly saving to you (see next question below). But you’ll need to negotiate how you pay back that money over the remainder of your contract – or extend your contract and pay it back over a longer period.

You should also make sure you’re claiming all the other Government help available to supplement your income before you approach your landlord.

I’M A LANDLORD, SHOULD I GIVE MY TENANTS A RENTAL HOLIDAY?

This really depends on their finances and your own finances. If you have a buy-to-let mortgage then you can take a mortgage holiday and pass that monthly saving on to your tenant.

For example, if they pay £1,000 a month rent and your mortgage is £500 a month you could take a mortgage holiday and reduce their rent to £500 a month for three months to give them breathing space. Just make sure you agree how that money is going to be repaid.

It’s unlikely their income will have fallen to zero, with Government help available and furlough money on offer for many, so make sure they are claiming all the help they can get before coming to you. Open communication is key here.

I HAVE DEBT, DO I HAVE TO STILL PAY MY MONTHLY REPAYMENTS?

The regulator, the Financial Conduct Authority, has announced changes to how debt is repaid during the current crisis. It has said that providers must offer a three-month debt holiday on credit cards and personal loans, which won’t affect your credit rating. However, interest will still accrue during this time, so it’s not a free option.

It has also proposed a three-month holiday for motor finance, and rent-to-own and buy-now-pay-later credit. For short-term credit like payday loans it has proposed a one-month interest-free payment freeze. You can read more here. 

WHAT ABOUT MY OVERDRAFT?

Banks must now offer a £500 interest-free overdraft to customers for up to three months. What’s more, the interest rate on some overdrafts was set to shoot up to 40% or higher as a result of changes made by the regulator, and it has now said that banks and building societies must ensure that during the current period people shouldn’t be paying more for their overdraft than they were before the changes were announced. You can read more here. 

I’M NO LONGER COMMUTING, DO I STILL HAVE TO PAY FOR MY SEASON TICKET?

Many with long train journeys into work will be paying hundreds of pounds a month for a train ticket they’re no longer using. But the good news is that people can get refunds for their season tickets, and also other train tickets they might have bought for future journeys.

Train companies are also waiving the usual £10 admin fee for off-peak and advance tickets, and have extended the refund period up to eight weeks after the day you were due to travel.

Understandably, rail companies don’t want you to go to the station to get your refund, so follow the instructions on your train company’s website, although be aware some have long delays for processing refunds. Each train company has slightly different rules on refunds too. More general information can be found here. 

MY INCOME HASN’T BEEN HIT, BUT I’M WORRIED IT WILL BE. WHAT SHOULD I DO?

The main thing you should focus on is building up an emergency pot, sometimes called a rainy- day fund.

This is where you save money in a cash account that you have easy access to, in order to give you a cushion in case your income is hit or you face unexpected costs.

Government research recently found that around 40% of people think they can save money in lockdown, as they aren’t paying to commute, go out or go on holiday. If this is the case then you can use this time to ramp up your savings. Read more on how to recession-proof your finances here.

I’M NOW WORKING FROM HOME FULL-TIME, CAN I GET MY EMPLOYER TO PAY THE EXTRA COSTS?

A big chunk of the nation is now working in hastily put-together home offices full time, and some will see higher costs as a result, mainly in energy and heating bills.

At the same time, a number of employers will be saving money by not having to pay for heat and energy in offices. Employers can give you £6 a week towards these costs, tax-free – but many haven’t offered or have declined to do so.

Otherwise you can claim tax relief of £6 a week from HMRC, and it says during these times it doesn’t need evidence for this, so no bills or receipts to prove your higher costs. However, this is £6 of tax relief, so for basic-rate taxpayers works out as £1.20 a week or £2.40 for higher-rate taxpayers – not exactly a king’s ransom.

You can claim more but you’ll need to give evidence of your extra costs. Here is more information from HMRC. 

I’M NOT USING MY CAR, DO I NEED TO RENEW MY CAR INSURANCE?

If people have their car insurance renewal coming up and haven’t touched the car in weeks they might question whether it’s worth paying up. But you still need insurance even if you’re not driving it – unless you have off-road parking you can put it on, so a driveway or garage, and then you can declare it SORN (statutory off-road notification) with the DVLA and won’t have to pay car tax either.

It depends how long you think lockdown will last and whether you’ll want to use your car straight away when restrictions are relaxed as to whether it’s worth the hassle. More information from the DVLA on the SORN process can be found here.

MY CHILD’S NURSERY IS CLOSED, BUT THEY ARE STILL ASKING ME TO PAY. DO I HAVE TO?

This is a very tricky one. How nurseries have reacted to this varies dramatically. Some have said that parents don’t have to pay any fees but others are still charging 50% or even 100% of the fees. If you don’t pay up, many parents are faced with being kicked out of the nursery – which is particularly a problem in areas with a large waiting list.

Many parents are sympathetic as they don’t want to see their nursery hit such financial difficulty they have to close.

Firstly, if you’ve seen your income hit then definitely talk to your nursery as they may be able to reduce your costs. Otherwise as a parent you have a right to know if the nursery is claiming all the Government and other financial help available before they ask you to stump up.

After that, it comes down to a myriad personal choices, including whether you’re willing to risk the nursery place by not paying.

WANT MORE HELP?

If you have other questions you want answering, then please email editorial@sharesmagazine.co.uk

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