This post may contain affiliate links (read more)
These are unprecedented times. You’ve probably heard that phrase so many times over the past few weeks, but there is really no more accurate way to describe the current situation.
Just a month a go we were still leading ‘normal’ lives for the most part. Now, many of us have found ourselves in a precarious situation with our finances.
Personally, I have been furloughed. Which like so many of you will know, means I’ve immediately lost 20% of my pay. And let’s be honest, as a part-time worker, it wasn’t a great wage to begin with. And my job is also at risk of redundancy, so I don’t know if I’ll even have a job to return to after all of this.
But there are other people are in even worse situations than this. Some have lost their jobs entirely and self-employed people, particularly the newly self employed, have found themselves hit hard.
So what can we do?
Luckily, there are some measures that have been taken to help us out financially. And there are lots of things we can do to limit the impact that loss of income has on our ability to afford live.
Here are some ideas of ways you can immediately reduce your expenses.
You might also enjoy…Make Money with Online Market Research Studies
Take a Mortgage Holiday
One of our biggest, if not the biggest expenses is the mortgage. If you are in an extremely dire financial situation, you might benefit from applying for a mortgage holiday.
The terms and conditions will vary from lender to lender, so be sure to understand exactly what this means for you before applying, but essentially it’s taking an up to 3 month break from paying your mortgage.
But be aware, this isn’t a kind gesture from the mortgage provider – you will still owe this money and will incur interest during the period of the holiday.
And your lender will discuss with you how you will agree to pay this back. You might spread the payments over the remaining term of your mortgage – in which case your monthly repayment will rise after the holiday, or you may be able to increase the length of the term.
Personally, I would only apply for a mortgage holiday if you absolutely can’t afford to make the payments right now. An increase of £10 a month (for example) may sound like an excellent deal for a 3 month break, but if you still have 20+ years remaining on your term, it’s not actually that great.
The government announced a £500m hardship fund which will provide council tax relief to help the most vulnerable households affected by the crisis.
This means that if you are already in receipt of a council tax reduction, you could see your 2020/21 bill further reduced.
If you’re not already in receipt of a reduction, but your circumstances have changed due to a loss of income, you might still be able to apply for a discount with your local council.
Contact Your Utility Suppliers
The assistance available will depend on your supplier, but if you think you might struggle to pay your utility bills, contact them and ask for help.
For example, my water supplier is offering the following support:
- Water efficiency advice to help reduce your usage and therefore reduce your bills if you are on a water meter
- Accepting lower payments for a short period whilst your income is reduced
- A short breathing space or payment holiday
- A range of Affordability Assistance Tariffs designed to keep bills affordable for low income or vulnerable customers.
Wessex water is also offering a rebate of up to £50 for frontline NHS workers who are required to wash their uniform. Find out more here.
Gas and Electricity
In respect of gas and electricity suppliers, the general consensus is that you won’t be cut off for non-payment of bills during the crisis period but don’t just stop paying – contact your supplier directly and they will consider individual circumstances and agree payment plans and reduced payments.
If you’re on a prepaid meter and worried about topping up, you can register with your supplier as vulnerable for extra support and some suppliers are offering to post prepaid cards where necessary.
Many suppliers are also increasing their emergency credit limits to help during the crisis period – but remember any debt you incur you will need to pay back so be wary.
You might also want to consider moving energy suppliers if you’re not on the cheapest tariff for your area.
Use a site like USwitch to do an energy comparison and see if moving could save you money.
We moved to Bulb* and cut our monthly payments from £149 a month to £118 a month. In addition, Bulb will give you and a friend £50 each when you switch using their referral link.* If you ring up their customer services, they’ll pay the £50 to your bank rather than crediting your bill.
Just be mindful that there could be an overlap meaning you’ve ended up paying both suppliers. Also any credit with your current supplier mightn’t be refunded straightaway.
Sky Sports customers are able to pause their subscription until the sport returns. If you have a BT Sport subscription you can pause that too. To pause your subscription with Sky go here.
If you have either of these subscriptions with Virgin Media you can pause them here.
You might also want to consider abandoning paid TV altogether like we did last year. We ditched our £53 a month Sky Package in favour of unlimited TalkTalk Broadband for £22.50 a month and a Freesat box.
I don’t want to be the person to say, ‘it’s not essential – so get rid’ because truthfully, I am fully dependent on my own streaming services at the moment! Disney+ helps to keep my two year old entertained while my husband and I settle down to binge-watch Netflix each night.
However, if you have a service like Sky then you can probably get by without Amazon Prime, Now TV etc. – so cancel and save the monthly subscription.
If like me, you don’t watch live TV and only use streaming services consider sharing memberships with family and friends.
Disney+ allows you to stream to 4 devices – so I’ve given my brother and sister my login details (don’t forget all the Marvel and Star Wars films are on there too – it’s not just for the little ones!). And in return my sister gives me access to her Now TV.
If you upgrade to a multi-user Netflix account you could split the cost. Sure it’s only a couple of pound saving, but it all adds up.
You might also enjoy…How to Save Money on TV and Entertainment
Car finance is a common outgoing for lots of households, with some even having multiple cars on finance.
If your finances have taken a severe knock as a result of the pandemic, you might be wondering how you’ll be able to continue making these payments.
From Monday 27th April, lenders will have to offer a 3 month payment holiday.
As with mortgage holidays though, this will add to the interest and term of the agreement so only consider it as an option if you are desperate and cannot make the payments.
If you are already in financial difficulty with your car finance, and the payment holiday isn’t an option, lenders can still offer you other solutions.
Financielle has written a very helpful post on the subject here: Can you freeze car finance payments during Coronavirus?
Lenders cannot repossess your vehicle if you’re in trouble due to Coronavirus. But regardless, DO NOT just stop paying. Get in touch and ask for help.
On the 21st April, Admiral announced that it would be refunding all customers who were insured with them on 20th April 2020 £25 per vehicle insured with them for staying at home during lockdown.
If your insurance if with Admiral, you don’t have to apply for this refund – it will be processed automatically and they will contact customers before the end of May with details.
Customers of Admiral’s other brands – Bell, Diamond and Elephant will also get the refund.
It is hoped that other insurers will follow suit, but it may be worth contacting your own insurer if your car has been off the road for a while. If the annual mileage is considerably less than you estimated when you took out the policy, you may be eligible for a refund – but also be aware that if this is the case, you may have to pay an admin fee for making changes to the policy.
But like I said, hopefully other insurers will follow Admiral’s lead!
It is not a nice situation, but we find ourselves here nonetheless. We can’t really know what tomorrow will bring, all we can do is try our best to get by. I hope that you have found something of use here and are able to reduce your outgoings.
Many suppliers are helping customers where they need it the most, so pick up the phone and ask the question.
You should also look into any benefits and financial help you might now be entitled to, as well as looking into ways you can make extra money from home.