Support for you in these uncertain times

Our focus is helping our customers, the wider community and our people through the Coronavirus outbreak and beyond.

While your health and welfare are top priorities, you may also be really concerned about how this challenging time might affect your finances and your ability to manage them. That’s why we want to offer some guidance and keep you updated and informed on the ongoing changes.

What should I know?

Payment holidays

The Chancellor announced on 17th March that mortgage lenders have agreed to provide a three-month payment holiday to affected customers who get in touch. This means that if you can’t pay your mortgage as a result of Coronavirus, you can speak to your lender about taking a temporary break in your mortgage payments.

If you decide to take a payment holiday, after three months, your lender will review your circumstances and agree with you how to make up the deferred payments. Interest will still be charged for the duration of your payment holiday so this could mean an increase in your future monthly mortgage payments, or an extension to your mortgage term.

We’ve been working with the Government and the financial services industry to help protect your finances at this difficult time. As a result, agreeing with lenders to pause your payments for a while should not result in missed payments building up on your credit report - which should generally mean your credit score won’t be damaged.

Please bear in mind that your credit score is made up of many other factors, such as your total level of unsecured debt and how heavily you’re using your credit cards (your credit utilisation).

Taking out credit in the current climate

If you’re considering borrowing money either through a credit card, loan or overdraft, to help you cope during the Coronavirus outbreak, make sure you don’t borrow more than you can afford to repay, to avoid facing the additional pressure of meeting monthly repayments your income won’t stretch to cover.

This means only borrowing what you can afford to repay. You may also find it useful to read the workers’ support package that was recently announced by the Chancellor, including changes to Universal Credit and Statutory Sick Pay. You can find more information on that here.

If the situation worsens, or goes on for a long period of time, it may become harder to find and be accepted for credit offers. So if you’re thinking about applying for credit it would be a good idea to start reviewing your options sooner rather than later.

Home repossessions

From 27 March, all ongoing possession proceedings are suspended for 90 days with an option to extend the suspension further. That means banks and building societies have been forbidden from repossessing people’s homes, and cannot charge fees for payment holidays agreed in the wake of the outbreak.

Renter rights

If you’re struggling to pay your rent due to the outbreak, speak to your landlord as soon as possible to let them know your situation and try to work out a repayment plan.

You should know that all landlords in England and Wales must give three months’ notice before starting eviction proceedings according to emergency legislation that was passed on 25 March.

You could also be entitled to financial help with your rent. You can check the assistance being offered by the government for renters during the outbreak here.

Government assistance for the self-employed unable to work due to the outbreak

It was announced on 27 March that self-employed workers will be able to apply for a grant worth 80% of your average monthly profits (based on your tax returns over the past three years) to help you cope with the financial impact of coronavirus.

You can read more on government assistance here.

What can I do?

Your existing credit commitments

We know that this is a very difficult time and that many people have been severely affected by the financial impact of Coronavirus, but if you’re able to, it’s really important to pay all of your bills on time so you don’t damage your chances of getting credit in the future. If you can’t do this, try to pay at least the minimum amount due on your credit commitments.

If you think you’re going to struggle to make payments, due to the knock-on effects of the outbreak, please speak to your lender as soon as you can. You can find more details about the help that lenders are offering in our guide here.

You can also get free advice and support with debt from organisations such as StepChange, National Debtline, PayPlan or Citizens Advice.

Household bills

If you’re worried you won’t be able to pay your energy, water, mobile or other monthly bills, contact your providers to see if they offer flexible payment options, such as payment breaks or reductions in bill amounts during the outbreak.

If you’re a prepayment customer and are currently self-isolating, you could benefit from the emergency measure being introduced by providers. You can find more information on that here.

It may also help to know that MOT deadlines have been extended by six months – which could help with your current cashflow.

It’s also a good idea to compare energy prices and make sure you’re taking advantage of the best offers available.

Balance Transfer Cards

If you have existing credit card debt, then you could save money by transferring balances to a credit card with lower interest. A small transfer fee may apply but this may reduce your monthly repayments and can help reduce the cost of existing borrowing.

We’ve seen some lenders remove their best credit offers, so it’s a good idea to check your eligibility when applying for credit. This will help you avoid being refused credit and building up multiple credit application (hard) searches. Doing an eligibility check won’t change your credit score or appear on your credit report to lenders. Click here to check your eligibility for credit cards and loans.

We’re a credit broker not a lender

Remortgage

The Bank of England base rate was cut to 0.1% on 19 March. This means that if you’re on a variable or tracker mortgage, you could see your repayment rates fall.

If you have a fixed-rate mortgage, this cut will not affect your monthly payments. However, if you’re coming to the end of your existing fixed-rate agreement, this could be a good time to search for a new offer, as mortgage rates remain at historical lows.

Protect your identity

Unfortunately, we’ve seen a rise in scammers taking advantage of the outbreak to exploit people. We want to encourage you to continue being vigilant with your personal details – particularly online. Visit our guide for more information on how you can protect yourself.

Our commitment

The pace of news and information about the virus and its progress can seem overwhelming. As can all the information about the actions being taken by companies, governments and individuals to help us make it through. So, we’ll continue to try to help by summarising and simplifying what you need to know about money and credit, as we as a country work together to get through this.

Information correct as of 10am 1st April 2020.