The UK Government’s emergency plan to save the economy has resulted in several new measures being introduced to help employers, employees and the unemployed through the Covid-19 pandemic, but the information can be a bit confusing.
Martin Lewis and his team of money-saving experts have been issuing regular updates on all the changes through his website, TV appearances, social media channels and his weekly newsletter.
Over 77,000 responded and 39 per cent said they would be worse off, 36 per cent thought there would be no change and 25 per cent were optimistic that lockdown would improve their finances.
“While coronavirus has united the nation in support of the NHS, it has led to stark division over the financial impact,” Martin wrote in this week’s newsletter.
“With the economy predicted to shrink by a third this quarter, the number who have hit dire straits sadly needs little explaining. Yet the fact one in four people will see improvement probably does; for many still working, locked in at home, their income is stable, and expenditure vastly cut. It even leaves some starting to save for the first time,” he added.
Coronavirus in Scotland
In the latest issue of the newsletter, Martin has put together a new list of 19 key “need-to-knows” which he says are to “ensure, regardless of your situation, you’re tooled up with all the new info, discovered by us and announced by Govt, so you can support yourself and your families as best as you can.”
Due to the fast-moving nature of the Covid-19 outbreak, Martin and his team have four guides that are regularly updated which are worth checking out for more detailed information.
- Coronavirus employed & self-employed help
- Coronavirus finance & bills help, incl overdrafts, energy, TV
- Coronavirus life-in-lockdown help, incl MOTs, food, entertainment
- Coronavirus travel rights
19 new coronavirus “need-to-knows” from Martin Lewis
1. Self-employed? If you’ve savings put aside to pay tax, it need not reduce your Universal Credit – Universal Credit payouts are reduced if you have savings (or technically capital). The drop starts at £6,000 savings and by £16,000 you can’t claim.
2. Limited company director coronavirus tips / wriggle room video – those who work via small limited companies that they’re directors of (as many firms ask them to) will know already there’s very little state support available, as dividend payments aren’t covered. I explain in my 10-min small limited-company director coronavirus help video – watch it here.
3. Lock in cheap energy now as prices are at their lowest for three years, but the oil price is rising – save £350+/yr. In the last few weeks, the coronavirus slump means oil prices hit a 17-year low, but on Sunday, Russia, US, Saudi Arabia et al agreed to cut production massively, to bolster the price. While this is just one element of our domestic energy prices, it’s an important one.
Martin recommends using this energy club link to compare specifically cheap fixed tariffs which lock in today’s rates.
4. Employer refusing furlough as it doesn’t have the cash for salaries in the meantime? You can agree to delayed pay. The state will cover furloughed employees’ salaries from March to May.
Firms should be able to apply for this cash from around April 20, and receive it hopefully days after that.
Many people have reported to Martin that their firms are so short of cash to pay now, they won’t furlough but instead offer unpaid leave/redundancy – many have asked if their firm could delay their pay.
The UK Government told the financial journalist that it’s a matter between employer and employee, but you and your employer can agree they can pay a little later, though best it’s done via a formal agreement.
Top Furlough News
5. You can now ask for the first £500 of your authorised overdraft to be interest -free for three months – emergency measures by regulator the Financial Conduct Authority came into effect on April 14.
The first £500 of authorised overdrafts can be interest-free for three months (for overdrafts under £500, the entire balance will be 0%).
Those with accounts that have an overdraft facility can request one of these 0% overdrafts, subject to a credit score.
Some banks are doing more and automatically giving all overdrawn customers up to a £500 interest-free overdraft – see the full list here.
6. Card and personal loan providers must now, if asked, give three month payment holidays to those struggling – the emergency measures by the FCA that came into effect on April 14 also require banks to give those struggling due to coronavirus, who ask, payment holidays of up to three months on personal loans, credit and store cards and catalogue deb t.
7. If you’re self-employed, you must submit any already late 2018/19 tax return by Thursday, April 23 to be eligible for help – in early June, the Self-Employment Income Support Scheme will pay three months of grants worth up to 80 per cent of self-employed profits, capped at £2,500/mth. To be eligible, you must have filed a 2018/19 tax return.
8. Car finance announcement likely this week – the FCA is expected to propose a payment freeze on payments much like mortgage, credit card and personal loans three month holidays.
9. Parents whose income has dropped? Are you eligible for Child Benefit? Child Benefit is worth £21.05/wk for one under 16, £35/wk for two.
If no one in the household earns over £50,000/yr, you’re due it all, above that you get less, until at £60,000/yr you’re not due any (and yes, it’s crackers that two parents earning £49,999 get it, but one earning £60,000 doesn’t).
Those earning about or just above these boundaries who have been furloughed, made redundant or put on unpaid leave may now be able to claim – you can backdate claims up to three months too.
10. Fallen through the gaps, not supported? A fortnight ago, Martin wrote about ‘nine things the Chancellor could tweak to help people ‘ blog, it now includes his responses to five of those.
A few problems he highlighted include:.
Limited company dividends not being covered
New employees after 28 February can’t be furloughed
No help for the self-employed who started business in the last year
No help if firms refuse to furlough, but do lay-offs instead
“I’m constantly being asked for news of change on these and other gaps. So I need to be plain – barring minor guidance clarifications, there aren’t any. And the strong signals I’m getting from key sources is THERE WON’T BE ANY, certainly not unless, as isn’t expected, lockdown extends beyond the original 3mth financial limit,” he wrote in the newsletter.
“Of course, that isn’t a reason to stop campaigning for change (MSE and I are doing that too), but it is a reason to plan your finances on the fact things won’t change, to apply for universal credit if you haven’t already and to do what you can. I’m sorry to bear this unwanted news,” he added.
11. Employer unsure about furloughing you? Last week, Martin drafted a Coronavirus Job Retention Scheme cheat sheet – 12 simple furloughing need-to-knows for employees and small firms. It’s a simple way to be prepared if you’re trying to persuade employers to furlough you.
Furloughing sometimes involves both parties agreeing to a contractual change. Employment specialist ACAS has sped up drafting its furloughing template letter for employers so MSE could include it – making it an easy legal way to furlough someone.
“One of the biggest holes is those who changed jobs after 28 February, meaning their new employer can’t furlough them. In last week’s email, I explained I’d got the official guidance tweaked to confirm firms can rehire staff who voluntarily left after 28 Feb.
“Of course, sadly most former employers will say no, but don’t let pride stop you asking,” Martin advised.
Latest Money News
12. Income dropped due to furlough, redundancy, business struggles? Do a budget. With millions facing sudden income shocks, it’s crucial to try to budget and plan expenditure. Even if income is only 20 per cent lower, as it is for many being furloughed, that’s a big change to your discretionary spend.
13. Register newborns for Child Benefit without registering their birth – normally, you have to go in person to register a birth before getting Child Benefit. Just tell HMRC when applying that you haven’t been able to register your baby’s birth due to coronavirus. See full claiming child benefit for newborns step-by-step help here.
14. Can I apply for Universal Credit if I’m going to get the Self-Employment Income Support Scheme payment? Yes. In a nutshell, apply for Universal Credit now, then when you receive the Self-Employment Income Support Scheme payment, it’s counted as earnings, so your Universal Credit will drop then.
15. Overtime earnings, bonuses and possibly sales commission count towards furlough pay – with furloughing, your work is put on hold and the state covers 80 per cent of your salary, up to a max payment of £2,500/mth.
The definition of salary is ‘regular, contractual pay’, which includes basic wages, compulsory commission and past overtime.
“Previously we’d thought sales commission didn’t count, now it seems (though we’re waiting for an official answer, so it’s still TBC till next week) if it’s in your contract, eg, you get 10% of each sale, it’s covered,” Martin said.
As for how much overtime/commission you get, again it’s to be confirmed – for more detailed information, see How is furlough pay calculated? here.
16.You can now claim a train refund online/remotely – nearly all train tickets bought before March 23 have been refundable since then, though you may need to pay a £10 admin fee on season tickets.
A few firms were, ridiculously, saying you must go to a station office to sort it, now train firms allow all passengers to get refunds remotely, usually online. See rail refund help on MSE here.
17. One in nine mortgages are now on payment holidays. Need it? Do it -the bank trade body UK Finance just announced over 1.2m mortgage payment holidays have now been granted. You can apply online for a mortgage payment holiday with all major lenders. Do apply though, don’t just stop direct debits – that’ll kill your credit score. Read more information about this here.
18. Universal Credit online application s – The Department for Work and Pensions (DWP) has processed 1.4m claims in the last three weeks alone, 10x normal demand.
Once you’ve completed your online application they’ll call you back (and, in some cases, may not need to call and verify at all), freeing up phone lines for those who can’t get online to claim. Read the application guide here.
19. Really struggling? Is there a grant to help you? This won’t work for most but if you’re really struggling it’s worth two minutes on charity Turn2Us’s grant finder. Most individual grants aren’t specifically for coronavirus, but for those on low incomes, so may help – they tend to be targeted at specific areas, eg, young entrepreneurs who are struggling, those in education, or musicians.
You can find more information on a range of money-saving topics and sign up for Martin’s weekly newsletter here.
The Martin Lewis Money Show Live, is on ITV at 8pm on Thursday, April 16.
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