Understanding Your Financial Options During the Coronavirus
The coronavirus has created a lot of uncertainty for many businesses and households. Whilst there ar..
The coronavirus has created a lot of uncertainty for many businesses and households. Whilst there are
millions currently on furlough, unemployed and business owners biting their nails over the next few
months, there are a number of financial options available from your bank and providers that can help
manage your cash flow more effectively.
Whether you have an immediate loss of income, extra costs or have gone out of business, there are
financial options available through a number of government initiatives and financial options below.
Households
One of the biggest areas to save for households is on mortgage payments, where the UK government and
banks have agreed to offer payment holidays of up to 3 months.
You will need to demonstrate a loss of income and difficulty in repaying your mortgage as a result of the
coronavirus; and that you are not applying as part of a long-term financial issue.
With the average UK household spending £671 on their mortgage each month, this could provide a saving
of around £2,100 to the average family.
Tax
The UK has offered VAT and self-assessment tax delays for individuals and businesses who are looking to
maintain their cash flow. This comes after the US agreed to over 90 days of tax-free living and a £1,000
stipend to each US citizen.
For many self-employed and small businesses, the ability to defer tax payments will offer a healthy balance
short-term. However, people that claim this should ensure that they have sufficient funds available when
their full tax balance could be due and significantly higher, this time next year.
Business bank accounts
For those using business bank accounts, customers can use their overdraft during COVID-19 without
incurring any fees. Currently, this is limited to just £500, however, different terms may apply depending on
the bank, your previous payment history, and company turnover. If you do not have an overdraft, you may
request one from your bank and this may be subject to affordability.
If you are looking for the best business bank accounts and looking to save money during the pandemic,
look at which companies do not offer any upfront or monthly fees and come with an overdraft facility.
Credit Card Debts
The FCA announced last week that all banks and credit card providers can offer customers the chance to
freeze credit card payments for up to 3 months. This will not impact the individuals credit score or incur
any extra fees, but for many will provide a lot of important breathing space. The measures include any
credit cards and store cards and banks have been told that they cannot suspend cards during this period
either.
Whilst the eligibility criteria is not fully certain and will be treated on a case-by-case basis by each bank or
provider, this should not be seen as a long term solution and there may not be leniency on people on
regularly default on credit card payments.
