Coronavirus: personal financial advice for those suffering a loss of income
Sadly, many hospitality workers will require financial support in the coming weeks and months, with UKHospitality predicting that a million jobs could be lost.
We've asked the Citizens Advice Bureau, Money Advice Service and UKHospitality to share their advice for staying afloat financially.
Nick Hill, money expert at the Money & Pensions Service, said: "While this is likely to be a stressful situation for many people, there are steps you can take now to prepare yourself to deal with any financial challenges, and to hopefully give you some peace of mind during the coming months.
"A good starting point is to do an emergency budget and check what savings you have to bridge any gaps. You should also check with your bank, insurers and providers, such as energy companies, to see what support they can offer. If you still think you will struggle to make ends meet, there are free support services available to help you, online and over the phone, whether you're facing an emergency cash shortfall or you're worried about debt.
"This crisis has happened very quickly and people may be looking at using credit or borrowing to tide them over. Some forms of borrowing can be very expensive, so it's vital people take time to understand all the options before they make a decision.
"This is also a very worrying time for people with pension savings, especially if they're approaching retirement. The key thing is not to panic – you should avoid sudden decisions and get independent guidance or advice to help you weather the storm."
Renters
The government said yesterday (Wednesday) that it would bring forward legislation to protect renters from eviction during the coronavirus crisis.
The Citizens Advice Bureau advises talking to your landlord or letting agent straight away if you are struggling to pay your rent. It may be possible to delay payment dates or agree a reduction in rent or revised payment plan. However, do not offer to pay more than you can realistically afford.
Paying off rent arrears should be a top priority before any other non-urgent debts. If you are unable to come to an agreement with your landlord, Citizens Advice further recommends that it's a good idea to pay what you can afford; keep a written record of what you offered and get advice quickly if you can't reach an agreement.
Home owners
The chancellor earlier this week announced that three-month mortgage holidays would be made available during the coronavirus crisis to support those who suffer a loss of income.
Under your existing mortgage agreement you may already be permitted to take a mortgage payment holiday, which allow you to take a break from paying part or all of your monthly payment. But they do increase the total amount you owe, so it's not free money.
If you are struggling to make mortgage payments, contact your provider as early as possible to explore the options available, as missing or late payments can have serious implications for your credit rating. It's vital you check with your lender before you stop any payments.
Accessing credit
Try and use borrowing as a last resort, but if you do need to borrow, make sure you choose the right type of credit or loan for your situation. Otherwise, you could find yourself paying more than you need to.
Shop around and compare deals and look at the interest rate, the Annual Percentage Rate (APR), how much you will repay in total and whether you can afford the repayments, as well as any penalties for missed or late payments. Work out the cost per week or month and find out whether this might vary.
Borrowing money from family or friends could be a cheap way of obtaining funds, and they are also likely be more flexible about how you pay the money back.
An overdraft can be a quick way to fund a short-term gap in your income. However, there are changes due from April that could make using an overdraft much more expensive, so check with your bank.
If you've got a good credit rating and you can afford the repayments, a small personal loan or a 0% credit card might be a cheaper alternative to cover essential expenses than an overdraft.
If you're already struggling to make credit card repayments, contact your lender. The major credit card companies are offering to remove fees for missed payments, but the debt will still be there and interest will continue to accrue. Some banks and building societies are also offering extra support if you're affected by coronavirus, including temporary increases in credit card borrowing limits, increased cash withdrawal limits and refunds on credit card cash advance fees. Check with your bank or building society to see what help is available.
Bills
If you're going to have trouble paying your gas or electricity bill, talk to your provider to discuss ways you can make affordable repayments. They should also check if you're on the best tariff for your needs. It's possible to switch providers to get a better tariff even if you're in arrears.
Submitting a Universal Credit claim
If you're not entitled to statutory sick pay or new-style Employment and Support Allowance, you'll have to claim Universal Credit if you need support while you're off work because of coronavirus.
You will need a lot of paperwork evidence to make a claim for Universal Credit, and you'll have to make your claim online. It takes five weeks for your first Universal Credit payment to come through, so any delays could push the payment back further.
You don't want to be hunting around for payslips, tenancy agreements or mortgage statements when you have a fever, so the Money Advice Service suggests getting together all your important paperwork now.
If you're worried about anything to do with claiming Universal Credit, contact the Citizens Advice Help to Claim Service online or over the phone. Citizens Advice Scotland also runs a service if you're north of the border.
Useful contacts
The Money Advice Service (0800 138 7777) provides free and unbiased help and guidance on all money matters
National charity Turn2Us can help with benefit support and local welfare services
