The coronavirus pandemic has seen life in the UK change beyond all recognition. Following several months of lockdown and a continuous stream of horror stories from around the world, people are understandably concerned about the health effects of COVID-19. In addition to this, however, there are growing financial concerns both for the national economy and indeed for personal finances.
It’s only right that people continue to do what’s best for their health and that of their loved ones, but as the government begins to ease restrictions, minds may start to turn to money worries and how to deal with them.
If you find yourself amongst the many people who are worried about managing money or dealing with debts, read on to find out what you could do to set your mind at ease.
Look after your health first
Debt can be scary, particularly at a time when many people are out of work or on reduced pay via the UK government’s furlough scheme. Whilst this may be the case, keeping yourself and your family safe should remain your top priority in line with official guidelines.
With the government advocating for people to stay inside wherever possible, some people may be worried about leaving their home to go to the bank or pay their bills. If this sounds like you, there’s no need to worry and there are plenty of alternatives to paying for things in cash or by sending a cheque. By contacting your banking, utilities, or other providers, you could find more convenient ways to make payments so that you can stay on top of your finances during the pandemic.
These days, the majority of companies are happy to take payments over the phone, via a secure internet portal, or via an online banking transfer. Just remember to keep a record of any payments that you make – even when you are staying safe at home.
Communication is key
The government, along with numerous private organisations, have recognised the impact that coronavirus has had on people’s finances and in many cases have put in place discretionary schemes to prevent people from facing the usual consequences of failing to keep up with payments. If you do find that you are unable to make a payment towards an existing liability, get in touch with your provider and explain the situation. There’s no cause for fear, and a cool head and firm understanding of your situation could help you to deal with things calmly and carefully.
In a similar vein, keeping a channel of communication open with your banking provider could help you out of any tricky spots during the coronavirus. If you are struggling financially, make that clear to your bank or building society as they may be able to offer you an overdraft facility. If you already have an overdraft, they may agree to freeze interest charges for a limited period to help you get back on your feet.
Ultimately, communicating with your lenders and providers will almost always be more productive than simply ignoring the problem in the hope that it goes away. Let them know if you’re struggling, and they’ll be more likely to work with you to reach a better, mutually agreeable position.
Be careful when borrowing
If you’re struggling with a reduced income or have found yourself unable to pay off your usual costs during the coronavirus pandemic, it might be tempting to take out a personal loan. Whilst borrowing might help to cover the shortfall, it’s vital that you understand the consequences of taking out additional liabilities at what could be a very challenging time financially.
First and foremost, borrowers would be wise to check that any lender from which they wish to take out a loan is authorised and registered. There are strong governance systems in place for UK lenders, and the Financial Conduct Authority (FCA) oversees such activities. Provided that you use a reputable lender, you can rest assured that you can access help if things go wrong – either from the FCA or the Financial Ombudsman.
Before taking on any further debts, those with existing liabilities may wish to assess their situation and work out if they will be able to manage repayments in the future. Even if you do find yourself unable to deal with outstanding debts, there’s no need to panic as there are many debt solutions available to the UK public – for instance an Individual Voluntary Arrangement (IVA) which could give you longer to pay off what you owe. You can learn more about the various types of debt solutions available to the public at CreditAction.co.uk.
Get on top of your debt
Whatever challenges you’ve faced during the COVID-19 lockdown, mandatory time off from work or away from the office may have left you with some extra time on your hands. If this is the case, a bit of free time could be exactly what you need to get on top of your finances and start to set goals for improving them.
Money management is a tricky skill to master, but it can all start with an effective budget. Use time spent on furlough or away from work productively, and kick start your own financial recovery from coronavirus.