The simplest guide to financial help you can get during coronavirus

For those that don’t know, I’m CEO of Lifetise, a financial planning startup that helps people afford major life events like buying a home, having kids and retirement. And now, a pandemic. We didn’t expect that, almost overnight, we would be creating new apps to help people figure out how to cope financially during coronavirus. But we’re pleased to be able to do something.

Things are complicated right now, and incredibly stressful for many of us. We know lots of people are worried about money. At Lifetise we’ve been spending our quarantined energy building tools and resources to help as many people as we can work out their financial situation.

The positive news at least, is that a lot of financial help is available. The difficulty is that it can be hard to work out what applies to you, or how you can get it.

Financial support for coronavirus in the UK

In this article you’ll find answers to lots of questions, plus directions to where you can apply for financial help within the UK — whether that’s payment breaks on your mortgage, benefits, or interest-free bank loans for your business.

The systems are far from perfect — they’ve been put together quickly and some people find that they fall through the gaps. If that’s you, I’m so sorry. The Citizens Advice has brilliant experts who know every inch of the benefits’ system. Just be patient as they are understandably busy.

If you’re feeling information overload, you’re not alone. There’s a huge amount of information and most of it is in government-speak! So I’ll do my best to declutter it for you. If you prefer listening to reading, I was a recent guest on the Adulting podcast with Oenone Forbat where I go into all of this with her, if you’d prefer that.

So let’s start dealing with some situations…

Coronavirus and PAYE employees

If you’re employed by a company and paid a salary through PAYE, then you’re in a better position, as this is where the government has directed most of their support.

How to get paid if you can’t work because you have coronavirus symptoms

If you can’t work because you have coronavirus symptoms and your employer won’t pay your normal salary or give you enhanced sick pay, then you can claim statutory sick pay (SSP) from your employer. You just need to let them know that you’re ill. You can claim SSP from the very first day that you’re unable to work.

SSP is £94.25 a week, so less than a lot of people normally get paid. So bear that in mind. Of course, as soon as you’re well enough to go back to work, you’ll get paid your normal salary again.

It’s paid through payroll in the normal way. By the way, if your employer needs you to give them a form, then you get that easily from NHS 111 online.

Worried about losing your job?

If you’re at risk of losing your job because your employer is struggling during the pandemic, the best thing you can do is ask your employer to apply for the Coronavirus Job Retention Scheme to help pay your wages. The government will reimburse 80% of your salary (up to £2,500 a month), as long as you are paid through PAYE.

You’ll be put on leave (called “furlough”) so you won’t be working, although you can do some volunteering or training. Your employer can put you on furlough from between 3 weeks to 3 months.

So get in touch with your employer and show them the government’s page on financial help for businesses.

If your employer company is struggling is struggling to cover your wages in the meantime, they should apply for a Coronavirus Business Interruption loan ASAP via one of these banks on the British Business Bank’s website.

Made redundant or let go from your job?

But what if you get made redundant and your employer won’t apply for the Job Retention Scheme or a Business Interruption Loan?

You’ll get the minimum statutory redundancy payment, so long as you have worked for the company for at least 2 years. How much you get depends on your age at the time that you worked for the company:

• half a week’s pay for each full year you were under 22
• one week’s pay for each full year you were 22 or older, but under 41
• one and half week’s pay for each full year you were 41 or older

Easiest way to work it out is to use the government’s official redundancy calculator.

Check what benefits you can get

Whilst we’re talking calculators, if you are let go from your job, then you should immediately check what benefits you can claim to tide you over until you find a new job. Use the EntitledTo benefits calculator to see what you could get or speak to Citizens Advice.

There is zero shame in claiming benefits. We’re in the midst of a global pandemic and over 1 million people have already applied for Universal Credit since the crisis started. So please go ahead and apply if you need money to tide you over.

Find a temporary job

There are also lots of temporary jobs being recruited for in response to coronavirus.

Supermarkets (Tesco, Asda, Aldi, Lidl, Morrisons) are hiring over 35,000 temporary workers between them. Their job sites are seeing a lot of traffic at the moment, so keep trying.

Some NHS trusts are also hiring (for project managers, logistics, admin and porters), so check the NHS Jobs website.

Of course, you need to make sure that you protect your health. So if you are in an at-risk category for coronavirus, where it could have a serious impact on your health, then don’t do it. Look at applying for benefits instead.

Coronavirus and self-employed and freelancers

This is a more complicated question, but fortunately we’ve built a free-to-use web app that will show you precisely what to do based on your individual situation. Use it!

If you’re a freelancer or self-employed, you may be feeling anxious at the moment as your income is even more volatile than normal. Maybe you’ve even had to temporarily close your business. That’s awful and we’re really sorry. We know what it takes to build a business and we know the stress you must be feeling right now.

Let’s run through your options. What type of financial help you can get depends on whether you run your business as a sole trader, a partnership or through a limited company.

Coronavirus financial help for sole traders and partnerships

If you are a sole trader or a partner in a partnership then there’s good news, the government has created some financial support called the ‘Self-employed Income Support Scheme’ (SIS) to help pay you if your freelance business or partnership has been impacted by coronavirus.

It works out your average monthly profits over the past 3 years. Then pays you 80% of that monthly amount, up to £2,500/month for 3 months.

You can get it for a maximum of 3 months (so the most you could get would be £7,500) and pays you the whole amount in June.

If you’re eligible for the Self-employed Income Support Scheme, you can also continue to work in your business. So if you still have work coming in, you can keep earning money as well as getting the government grant.

You can find out whether you qualify for SIS here.

Coronavirus financial help if you run your business through a limited company

Unfortunately, if you are a director of a limited company, you can’t get the SIS grant. That means that a lot of self-employed folks who have set up separate companies are stuck without as much help. We know this is difficult, so let’s look at what financial help and benefits you could get.

If you operate your business through a business bank account, then you could be eligible for a Coronavirus Business Interruption Loan (known as CBIL). It helps SMEs struggling with cash flow due to coronavirus who might not be able to persuade their bank to give them a loan. With CBIL, the government gives the banks a guarantee on your behalf, so the banks are more likely to say yes to you (though not guaranteed to).

You can I borrow up to £5 million if your business is based in the UK with an annual turnover of £45 million or less. It’s open to all types of businesses, including sole traders, so long as you get paid into a business bank account.

You can get it via one of the 40 approved banks and lenders listed here on the British Business Bank’s site. If your bank is one of the ones listed, you might find it easier and quicker to apply to them, but do check the terms they are offering compared to other lenders.

There has been criticism of CBILS. The banks haven’t loosened their lending criteria, so if they don’t consider your business to be ‘viable’ they won’t lend. It’s been slow — only around 6,000 loans have been made by mid April, but they’re saying that things should speed up now. We’ll see.

If you’re struggling for cash-flow, maybe defer your tax payments

If you’re in a situation where you need to keep cash in your business (or take whatever spare cash is in your business to pay you to keep you personally afloat), then there’s the option to defer some of your tax payments.

It’s not ideal, as it’s only a deferrment. You’ll still owe that money, but it gives you some breathing space and you won’t be charged interest or any penalties on the late payments.

How to defer your March — June VAT payment

You can defer your current VAT payment until March 2021.

You still have to submit your VAT return, but you don’t have to make the payment until March 2021. You don’t need to tell HMRC that you’re deferring — you just don’t pay (so if you normally pay by direct debit, you’ll need to cancel the direct debit).

How to defer your July self-assessment tax payment

If you have a self-assessment income tax payment on account due by 31 July, you can choose not to pay it until January 2021. Again, you don’t have to tell HMRC that you’re deferring — you just don’t pay.

If you’re struggling to pay any taxes, then you can always call the HMRC tax helpline on 0800 0159 559 to agree a payment plan and extra time to pay.

What should I do if I’m worried about paying mortgage, rent or other bills?

Help with your mortgage payments

If you have a mortgage and you might not be able to pay it, you can ask for a 3 month mortgage holiday from your banks. This means that, in most cases, they’ll let you not pay your mortgage for up to 3 months.

You won’t be completely let off your payments, but the bank should just add the 3 month total to whatever the remainder of your mortgage is, and then you’ll just pay a little bit more every month when you start making repayments again.

It will mean that you end up paying a bit more in total for your mortgage, so don’t automatically take a payment holiday unless you really need it.

Help with rent payments

Disappointingly, renters haven’t been given any specific breaks or help. So if you can’t afford your rent payments, you’ll need to negotiate a payment break or rent reduction with your landlord.

Here’s a template message you can send to your landlord asking for a rent reduction or payment holiday.

If your landlord is able to get a mortgage holiday, they should pass that benefit onto you.

In the worst case scenario, and you just can’t pay, try not to worry. Your landlord has to give 3 months’ notice to evict you, so they can’t get you out immediately. I know that still feels like a terrible situation, but use it in your negotiations with your landlord. It will cost them more to evict you than it would if they just let you pay a reduced amount for a few months.

Help with your overdraft, credit cards or loans

If you’re worried about making the minimum payments on your overdraft, credit cards or loans, most banks are offering some form of help in the form of payment holidays, or not charging you if you miss a payment. So find out what’s available from your bank and get in touch with them before it becomes a bigger problem, you don’t want it to affect your credit score.

Overdraft users beware! Some banks have recently started charging 40% interest if you go over your overdraft. That’s about double what you’d pay on a credit card and it could mean you get into debt quickly.

Some banks (like HSBC and Lloyds) are giving current accounts an extra £300 — £500 overdraft buffer, interest free. So check what your bank is offering and ask them to extend your overdraft to give you a buffer for the next 6 months.

Help paying your bills

If you think you’ll struggle to pay essential bills, like gas and electricity then get in touch with your energy provider now and ask them if they can lower your bills, or switch you to a cheaper tariff. If they refuse you can also use a switching service like USwitch to see if you can get a better deal.

If you’re going to be working from home, your bills might go up (because you’ll be using heating, electricity and water during the day), so ask your employer if they can cover some of those costs for a few months.

Get refunds on everything, cancel all your subscriptions

Now’s the time to get rid of any subscriptions that you don’t use! Go through your direct debits and cancel everything you won’t be using over the next 3–6 months. Just double check cancellation terms for any nasty exit fees (and if they do try to charge you, feel free to publicly shame them for it!).

Cancel holidays, cancel your annual or monthly train/bus tickets and get refunds. Your goal is to get as much money back into your bank account as possible, to give you that buffer.

If you have children, childcare is probably your biggest expense after your rent or mortgage. Speak to your childcare provider about getting a refund on any childcare costs for services you won’t be using.

We have a ton more info on our site. If you don’t know where to start, use our great tools to guide you to exactly what you could get.

If this has been helpful to you, please clap and share with all the people you know who might need it (which is most of us — we’re all trying to figure this out).

And if you like what we do at Lifetise and are in a position to support our work, check out our crowdfund.