Worrying about your finances? Get on top of your money and put your mind at rest with our advice…
You won’t be surprised to hear that anxiety levels in the UK have risen dramatically since lockdown, with more than 25 million Brits rating their anxiety as ‘high’ – more than double the level at the end of 2019. A survey by the Office for National Statistics (ONS) showed that 8.6 million people saw their income fall. Worries over work and money have been significant, with the ONS citing the most common concerns relating to wellbeing, work and finances.
While it’s certainly a challenging time for many of us financially, there are ways to save money and improve how you manage your finances. Start taking control of your money and making some savings with our top tips…
Have a reality check
Don’t be scared to check your bank balance. See where you stand financially and what bills you have going out each month, so that you can transfer money from your savings into your current account if need be and avoid going overdrawn. Knowledge is power, and the more you know about your current financial position, the better placed you are to manage your money and cope with any challenges.
Review regular payments
Check all of your direct debits and standing orders and cancel any that aren’t relevant due to lockdown. Gyms and cinemas should be freezing your membership until they are able to reopen. Review all of your current outgoings and get rid of any you don’t need, such as magazine subscriptions.
Check if you’re due any refunds
If you had planned to attend a concert or enter a race that has been cancelled, contact the organisers and request a refund. If you had a holiday booked, see if you can get your money back by checking the small print in your agreement or contacting the operator. You should also be able to claim a refund on your season ticket for travel.
Create a temporary budget
If lockdown has affected your income and you are earning less, work out what you have coming in and going out and rebuild your budget to make it work as best you can. Make sure you know how much you are spending on food, bills and your mortgage or rent in the current situation. Don’t guess – use real figures from your bank statements. Look at the last two months’ worth of bank statements to see where you stand.
When you go food shopping, make a list in advance and only buy the items you have on the list. Otherwise, there’s a chance you’ll add ‘impulse buy’ items to your basket which will increase how much you spend overall.
Keep an eye on your credit card charges
In ideal world, we’d recommend you clear your credit card and avoid interest, but this may not be possible at present. Do the next best thing and pay off as much as you can each month to keep interest down or consider transferring your balance to another card with an introductory rate of 0 per cent. Check there isn’t a transfer fee before you commit.
Make sure you’re getting all of the help you’re entitled to
The government has a variety of schemes to help those affected by the current situation. Check you’re getting everything you’re entitled to receive. If you run a business, you may be able to get help through the Coronavirus Job Retention Scheme, which has been extended to October. Or if you work for a company and want to find out if your employer can use the scheme, you can find out more about it here. If you’re self-employed you can find out if you’re eligible for a grant through the Self-Employment Income Support Scheme which is now up and running. If you’re on a low income or out of work, you may be able to claim for Universal Credit. You can also check to see if you are entitled to an Advance Payment if you are struggling financially while you wait for your money after you’ve made a claim.
Review your car insurance
Not driving your car? Or maybe you’ve drastically cut back on your mileage over the last few months? Talk to your insurer. If you don’t intend to drive your car in the foreseeable future then see if you can reduce your insurance cover down to fire and theft only, or let your insurer know if you are driving it that your mileage has gone down. You may be entitled to a partial refund. It’s also worth noting that you are eligible for a six-month extension on your vehicle’s MOT. Incidentally, car insurance premiums are reportedly at a four-year low, so if your policy is due for renewal soon, be sure to shop around and make sure you get a good deal.
Look into remortgaging
With the Bank of England recently reducing the base rate to an all-time low of 0.1 per cent, lenders are able to offer some competitive deals and you could save money on your monthly payments by remortgaging, which means switching to a new mortgage product. Applications can take around two months to go through, so don’t delay. Speak to a good mortgage broker. If your financial situation now is currently tricky, you may want to wait another few months, but it’s something to bear in mind when things settle down for you.
On the subject of mortgages, if you are currently struggling to pay yours due to the impact of the Coronavirus, you may not know that the government has just announced that mortgage payment holidays have been extended for a further three months. You have until the end of October to apply for a mortgage payment holiday.
Make overpayments on your mortgage
However, if your income hasn’t been affected by COVID-19 and you’re able to make overpayments on your mortgage, this would save you a considerable sum over the years. If you can make overpayments then we recommend that you do.
See if you can save on protection policies
If you have an income protection policy, check the expiry date and see if you can get a better deal on your monthly rate. Again, a good broker will be able to shop around for you and see if they can find a more competitive product.