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Coronavirus Finance & Bills Help

Payment holiday info for mortgages & other debts, plus rental help, energy top-ups & more

Coronavirus Finance & Bills Help

The coronavirus pandemic has fundamentally changed the way we live. While the primary concern is health, our financial wellbeing is also important. Many are worrying about paying their mortgage, rent and other bills. This guide runs through what help's available, though the main payment holiday help's only available till this Saturday - so go quick if you need to apply. 

Important: The info below is the best we have currently, but as this is a fast-changing situation we're updating this guide all the time. If you've a question that isn't covered below or in the other guides, please email it to us (we can't respond individually but we'll try to add answers in these guides).

In this guide

The entire financial landscape has shifted due to the coronavirus. We saw the Bank of England undertake economic shock therapy and reduce the UK base rate twice in just over a week in March, taking it from 0.75% to 0.1%, a record low. And we saw lenders scrambling to help customers who'd lost their income, offering payment holidays on loans, mortgages and credit cards, plus widespread help for those overdrawn. 

It was economic shock therapy that was needed. Many people were worried about how they would be able to afford to pay their bills, or just afford to live. But the main broad-brush help schemes will be winding down from the end of October, with tailored help the order of the day from that point on. 

Let's go through what you need to know, product by product...

Mortgage payment holidays on offer if you're struggling to pay – how they work

If keeping up with your bills and food on the table has become a challenge and you're finding it hard to pay your mortgage, speak to your lender. In March, banks agreed with the Chancellor that they would offer 'forbearance' (tolerance and help) on mortgages and other loans secured on your mortgage.

This means lenders should offer those struggling a 'payment holiday', allowing customers a temporary break from having to make mortgage payments during this time.

If you're going to apply for a mortgage holiday, it's best to do it online where possible, as lenders' phone lines are very busy. In fact, latest figures from lenders' trade body UK Finance show that 1.9 million customers have taken a payment holiday since the coronavirus crisis began. That's one in six of all mortgages in the UK.

How do mortgage payment holidays work?

Mortgage payment holidays were introduced at the start of the pandemic in March, and were extended in early June. Here's how they work:

  • You can apply for a payment holiday until 31 October 2020. This lets people who are currently making payments but are concerned about the future have more time to make the decision rather than rush to apply. 
  • Once a payment holiday's been granted, it'll last for three months. This means you don't need to make payments for that period of time. However, interest will still accrue while you're on the payment holiday, which'll mean you owe more once you do start to repay again.
  • You can arrange with your lender to take partial payment holidays. If you can make some payments towards your mortgage, but can't pay the whole amount, you'll be able to come to an agreement with your lender to do so. This is better than a full payment holiday as less interest will accrue, meaning future repayments would be lower than if you'd taken a full payment holiday. 
  • Your mortgage lender won't be able to repossess your home until after 31 October. Usually, when you don't pay your mortgage for several months, the lender would be able to apply to the courts to repossess your home. Lenders can't do this until November at the earliest.
house with hand putting a five pound note in a slot in the house

What if I'm already on a mortgage payment holiday?

If you've taken a payment holiday since March, it'll last for three months. If you can't start making full or part payments on your mortgage once your initial deferral comes to an end, you will be able to ask to extend your payment holiday for up to another three months, provided you do this before 31 October.

If your mortgage provider thinks doing this would land you in financial difficulty, for example if the extra interest you'd accrue would create large amounts of extra debt, it will be able to deny you the payment holiday and offer other help, such as freezing interest, or agreeing a repayment plan. 

Your lender will contact you towards the end of your initial mortgage deferral to discuss next steps, whether that's starting to repay in full, in part, or an extension of the mortgage holiday. 

How much could a mortgage holiday cost you?

If you take a mortgage holiday you WILL still be charged interest for the time you're not making payments. But you won't have to pay it back immediately – it'll be added on to the total cost of your mortgage and factored into repayments when you start making them again.

But how much you'll have to pay after the mortgage holiday will vary depending on how your bank wants you to repay those missed payments. It varies between banks – though generally there are three options:

  • Make up for the 'lost' payments by increasing your future monthly mortgage payments.
  • Lengthen your mortgage term, eg, if you've 15 years left now, you'd have 15 years and three/six months left after the holiday and your payments would stay the same.
  • Repay the accrued interest as a lump sum, then resume repayments at the same level as before the holiday.

Your lender will typically decide what options are available to you. It'll contact you towards the end of your first three-month deferral to find out if you can resume repayments, and – if possible – give you the options on how you want your payments or mortgage term to change.

However, if your lender can't get in touch with you, it's free to assume that you can restart standard repayments and to decide how it will charge you for the extra interest that's accrued during your payment holiday(s). For many lenders, spreading the cost of the missed payments and extra interest over your future monthly payments is the default. So if your lender contacts you towards the end of your mortgage payment holiday, make sure you talk to it and tell it whether you can resume payments.

To get a rough idea of how much your monthly payments could increase by after taking a mortgage payment holiday, use our NEW Mortgage Holiday Calculator.  

Mortgage payment holidays won't be marked as missed payments on your credit report – but they could still affect your creditworthiness

The three major credit reference agencies – Experian, Equifax and TransUnion – have confirmed that customers' credit scores WILL be protected when they have an agreed payment holiday in place. This special measure is called an 'emergency payment freeze' and means a payment holiday won't be reported as a missed payment, protecting your credit history. 

So if you were up to date with your payments before the payment holiday, you'll continue to be up to date throughout. If you were already in arrears, your arrears will be kept at the same level, so the payment holiday months won't be counted as more missed payments.

However, this protection will end on 31 October (or after your second three-month payment holiday if that's sooner) and if you can't resume full repayments once the protection ends, any new payment holidays or partial payments agreed with your lender WILL be reported on your credit report. 

Could my payment holiday still affect my creditworthiness even if it's not on my credit report?

Yes, it could. While mortgage payment holidays won't be marked as missed payments on your credit report, they could still have an impact on your wider creditworthiness, as other lenders can still find out about them. This could be through looking at the balances on your mortgage across time on your credit report, though it could also be by looking at bank statements or 'Open Banking' data. As Martin says...

'We wait to see how substantial the impact will be – but those who need a mortgage holiday should still do it'

The Financial Conduct Authority has confirmed, sadly, that while credit files shouldn't be impacted by mortgage or other payment holidays, lenders are still allowed to take them into account when making their acceptance decisions.

It's impossible to say yet how widespread this will be or how substantial the impact will be – we'll start to learn that over the next year. Each lender's assessment process is different; it's a dark art that's hidden from the public and never published, so this is likely to be yet another factor applicants will need to navigate.

Certainly many new challenger financial firms talk about their new, more sophisticated customer assessment models, that they believe are better than just relying on credit files. It's that very fact that sparked me to look at this in the first place. And as they will be able to see that someone has temporarily not paid their mortgage, they can spot payment holidays.

My hope is that as these holidays are specifically for the short-term financial hit of coronavirus – and as the practice is so widespread – it won't be used by many firms, and where it is it won't tarnish individuals' credit reputation for too long. But there's no real way to know.

Most importantly, I don't believe this should stop anyone who needs a mortgage holiday from getting one – if it's crucial for cash flow, just do it. Yet for those on the border, who may find it temporarily useful but can cope without it, add this to the fact that interest racks up during the payment holiday and I'd err on the side of caution.

How do I apply for a mortgage payment holiday?

Online is most banks' preferred route as their customer support staff are overwhelmed – however, our table below has the best way to apply for all the big lenders. If unsure, check your lender's website for the best way to contact it.

Make sure you get in touch at the earliest opportunity if you know you're going to get into trouble – the more warning you give, (hopefully) the more breathing space you'll have.

In an emergency response to coronavirus, lenders are allowing homeowners who are up to date with mortgage payments to 'self-certify' when they apply for a mortgage holiday. This essentially means lenders won't need to do a thorough check on your finances, like they normally would when you remortgage – instead they'll rely on you giving an accurate representation of your financial status. You can still get your lender to do a full assessment of your finances if you wish, though.

Warning – mortgage holidays MUST be agreed with your lender

To take a mortgage holiday, whatever you do, don't just stop your direct debit or standing order. Any mortgage holiday MUST be agreed with your lender first. This means you need to contact your lender and make a formal agreement as to how long you wish your 'holiday' to last.
 

If you simply stop your payments without warning this will be recorded as a late payment, which will not only put you into arrears but will also likely affect your credit file (which could make it harder for you to access credit in future). Even if it's a struggle, make sure you keep paying until you can agree the holiday. 

Here's what banks have told us they're offering, and how to apply for a mortgage holiday:

  • How are lenders helping mortgage customers?

    Lender Waiving fees for missed payments? Offering reduced payments? Offering mortgage holidays? Impact of mortgage holiday? How much notice should I give? (1) How to apply for a mortgage holiday?
    Bank of Scotland Yes Yes Yes Increased monthly payments
    10 days Phone / Online
    Barclays N/A – doesn't charge late fees Case by case Yes Increased monthly payments
    9 days Online
    Chelsea BS Not charged if on payment hol Yes Yes Increased monthly payments As soon as possible Online
    Clydesdale Bank Yes Yes Yes Flexible No notice required Online
    Coventry BS Case by case Yes Yes Flexible  7-10 days Online
    Halifax Yes Yes Yes Increased monthly payments
    10 days Online
    HSBC Case by case Yes Yes Speak to lender 7 days Online
    Landmark TBC TBC Yes TBC TBC Phone – 0330 159 7141
    Lloyds Yes Yes Yes Increased monthly payments
    3-5 days Online
    Nationwide Case by case Case by case Yes Increased monthly payments 5-7 days Online
    NatWest Case by case Case by case Yes Increased monthly payments 5 days Online
    NRAM Case by case Case by case Yes Increased monthly payments 10 days Phone
    RBS Case by case Case by case Yes Increased monthly payments 5 days Online
    Santander Case by case Yes Yes Increased monthly payments 10 days Online
    TSB Yes Case by case Yes Increased monthly payments 10 days Online
    Virgin Money Yes Yes Yes Flexible No notice required Online
    Yorkshire Bank Yes Yes Yes Flexible No notice required Online
    Yorkshire BS Not charged if on payment hol Yes Yes Increased monthly payments As soon as possible Online
    (1) Some lenders warn that your mortgage holiday may not take effect until the month after you apply.

'Tailored support' for mortgage holders after 31 October

The Financial Conduct Authority (FCA) has said mortgage lenders should consider a range of support options – including waiving or reducing payments – under new rules to help those customers who may still be struggling once their payment holidays end, or those who first experience financial issues related to the coronavirus after 31 October.

The majority of mortgage borrowers are expected to start repaying in full again once their payment holidays end. But for those who can't, these rules move lenders towards "tailored support" based on your individual circumstances, rather than the 'one-size-fits-all' payment holidays offered since March.

These new rules will be relevant to you if you fall into one of these three categories:

  • You've taken two three-month payment holidays and can't resume normal payments. You took a payment holiday in March/April and extended it in June/July, meaning you're close to finishing (or have already completed) your second three-month payment holiday. Once the second payment holiday expires, you'll move on to the measures described below.
  • Your first payment holiday expires after 31 October and you can't resume normal payments. Once the payment holiday expires, you'll move on to the measures below.
  • You go on to experience payment difficulties after 31 October. This applies whether or not you've taken a mortgage payment holiday in the past, or whether you find yourself in payment difficulties for the first time. 

Here's what the FCA's said lenders may offer their mortgage customers:

  • A (further) payment deferral. This is likely to be a short-term measure only, and may be offered if your circumstances are still changing, and you're not able to commit to a longer-term measure such as changing your mortgage type or length.
  • A (further) period of reduced payments. If you can pay something towards your mortgage, but can't make the full contractual repayment, your lender may agree to you making reduced payments. Again, this measure is likely to be for the short-term only.
  • An extension to your mortgage term. This is essentially like a remortgage, and means you'll pay less each month (but as you're borrowing over a longer period, you'll pay more overall).
  • A change to your mortgage type. For example, this could be switching you to an interest-only mortgage or changing to a product with a different interest rate.

However, unlike current payment holidays, which aren't recorded on your credit report, the FCA says mortgage lenders SHOULD report any further 'forbearance' (ie, the financial support they provide, such as extra payment deferrals) after 31 October to credit reference agencies. Your lender should let you know if the support it's offering you would have an impact on your credit report. Here's Martin's view on why the FCA is doing this...

'It's a shift of emphasis from 'we need to help everybody' to 'we'll only help those who REALLY need it''

There is one big change here that people need to understand. Until 31 October, mortgage payment holidays do not go on your credit file – though as I've said before, lenders do have other ways they can tell you've taken a payment holiday. But from 31 October, if you need help because you're struggling, it will go on your credit file, it will be there in black and white.

The regulator says this is because when other lenders are making judgements about you, the fact that you're struggling with your mortgage is important as it may mean you shouldn't be lent money elsewhere as you can't afford it.

My subtle interpretation of what that really means is that, actually, many people took mortgage payment holidays who didn't strictly need it, and they're trying to move this to a strict, 'if you need it, you get help and if you don't need it, you don't'.

By putting it on people's credit files, it acts as a disincentive for people to get help as they know it means they'll find it more difficult to get a mortgage or other borrowing in future once it's on the credit file.

It's a shift of emphasis here from the 'we need to help everybody in the short term' to 'we are only going to help those people who REALLY need help'.

If you're coming to the end of a mortgage payment holiday, whether that's your first or second, your lender should contact you to find out if you're able to get back to full mortgage repayments. If you're not, it should offer you forbearance, which may be one of the options above, but could be another solution that works for you and it.

If you've multiple debts you're behind on paying, the lender should refer you to help, and potentially free debt advice charities which will be able to help you further.

It's worth noting that lenders will no longer be banned from repossessing properties after 31 October, but the FCA's rules do make it clear that this should be a last resort when all other attempts to find a reasonable solution have failed. It also shouldn't be enforced if there's a local lockdown in your area, if you're self-isolating, or if the debt has only built up as a result of the payment holidays you've taken.  

Should I ask for a further payment holiday?

As we've said from the start, whether to take a mortgage payment holiday or mortgage help depends on whether you really need it or not. If you don't, and you can pay your mortgage and still put food on the table and pay your other bills, then it's not worth getting extra help on your mortgage payment, especially if that help will be recorded on your credit file, as that'll affect your ability to remortgage down the line, or any other application for credit.

Yet if you're struggling, and paying your mortgage will see you in dire straits, unable to meet other bills or feed your family, then you should ask your lender to help you. It doesn't have to offer you another payment holiday after October, but it may agree to it as a solution if you can show you're likely to be able to resume full payments within a few months.

For longer-term issues, it's worth discussing changing your mortgage deal with your lender. For example, extending your mortgage term and moving to an interest-only deal will lower the repayments you need to make each month, which could prevent missed or low payments being recorded on your credit report. But it won't be suitable for everyone, so check with your lender whether it could work for you. 

Quick question

  • Although regulator the Financial Conduct Authority (FCA) doesn't cover buy-to-let lending, it and the Treasury have said that they expect buy-to-let lenders to offer "voluntarily" the same forbearance on buy-to-let mortgages as they would have to on regulated residential mortgages.

    Many of the big buy-to-let lenders are owned by lenders that also do residential mortgage lending. We checked with Nationwide, which runs the Mortgage Works as its buy-to-let business, and Paragon Bank. Both are offering mortgage payment holidays for their buy-to-let customers. Landbay, which only offers buy-to-let mortgages, says it's complying with FCA guidance on mortgage payment holidays.  

Loans & credit cards – you can get a three-month payment holiday if you're struggling

It's not just mortgages – banks are helping those struggling to repay personal loans and credit cards, offering payment holidays of up to three months for people whose income has been hit. And it's clear that many have been affected – people have asked for payment holidays on over one million credit cards and 700,000 loans.

People owing money on store cards, catalogue credit, guarantor loans, logbook loans, credit union loans, home-collected credit and community development finance institution (CDFI) loans can also access the same payment holidays. Plus, if your debt has been sold on to a debt collection firm from one of these lenders, they'll also have to give you the option.

Here's what you need to know about credit card and loan payment holidays:

  • Three-month payment holidays are available to customers whose finances are affected by coronavirus. So if you're struggling to make payments, or think you will struggle over the next couple of months, your lender needs to help you if you ask.

  • You can apply for a loan or credit card payment holiday until 31 October 2020. This lets people who are currently making payments but are concerned about the future have more time to make the decision rather than rush to apply.

  • You'll still be charged interest during the payment holiday. This means you'll likely end up paying slightly more overall. So it's best to do this only if you need to – if you can pay, it's best to keep doing so.

  • You can arrange with your lender to take partial payment holidays. If you can make some payments towards your loan repayment or minimum payment on your card, but can't pay the whole amount, you'll be able to come to an agreement with your lender to do so. This is better than a full payment holiday as less interest will accrue.  

  • Lenders need only give the payment holiday where it's a suitable solution. If you already have debt problems, or there's a chance your income won't recover after the coronavirus crisis is over, the lender can deny you a payment holiday. But if that's the case, it should work with you to find a more suitable solution, such as directing you to debt help, setting up a longer-term repayment plan or waiving interest and charges.

Note that regulator the Financial Conduct Authority hasn't included peer-to-peer loan providers such as Zopa and Ratesetter in these measures, so the help they provide is down to individual companies. We've added information on these two companies and what they're doing to help in the table below

What if I'm already on a payment holiday on my loan or credit card?

In early July, the Financial Conduct Authority (FCA) confirmed proposals to extend credit card and loan payment holidays.

If you've taken a payment holiday on your card or loan since April, it'll last for three months. If you can't start making full or part payments once your initial holiday period comes to an end, you will be able to ask to extend it for up to another three months.

However, if your lender thinks doing this would land you in financial difficulty, for example if the extra interest you'd accrue would create large amounts of extra debt, it will be able to deny you the payment holiday and offer other help, such as freezing interest, or agreeing a repayment plan. 

Your lender will contact you towards the end of your initial payment holiday to discuss next steps, whether that's starting to repay in full, in part, or an extension of the holiday.

What help are lenders currently offering on cards and loans?

While the FCA has told lenders they must only offer payment holidays, some are also waiving fees for missed payments, offering reduced monthly payments or emergency credit limit increases. We've rounded up what lenders are currently offering on cards and loans...

  • How are lenders helping loan customers?

    Lender Waiving fees for missed payments? Offering reduced payments? Offering payment holidays? How do I apply?
    Bank of Scotland Yes Yet to respond Yes Online
    Barclays N/A – doesn't charge fees No Yes Online
    Co-op Bank N/A – doesn't charge fees No Yes Email this PDF form
    First Direct No No Yes Email this PDF form
    Halifax Yes Yet to respond Yes Online
    HSBC N/A – doesn't charge fees Yet to respond Yes, for 3mths Via this online PDF form
    Lloyds Yes Yet to respond Yes Online
    Nationwide Yes (if on payment holiday) Yes Yes, for 3mths (you'll still need to pay £1/mth) Online
    NatWest No No Yes, for up to 3mths Through its app (more info)
    Ratesetter N/A – doesn't charge fees
    Case-by-case basis
    Case-by-case basis
    Phone (020 3142 6226) or email
    RBS No No Yes, for up to 3mths Through its app (more info)
    Santander N/A – doesn't charge fees Yes (1) Yes, for up to 3mths (2) Online
    TSB     Yes Case-by-case basis Yes, for up to 3mths Online
    Zopa TBC Yes Yes, for up to 3mths Online

    (1) You need to apply for a payment holiday, then make 'overpayments' if you can't pay the full amount. (2) Also available to customers who have already missed payment(s).

  • How are lenders helping credit card customers?

    Lender Waiving fees for missed payments? Offering emergency credit limit increases? Offering payment holidays?  How do I apply?
    Bank of Scotland Yes Yes ("where responsible") No Online
    Barclaycard Yes Yes No  Online
    Co-op Bank Yes Yes – depending on circumstances Yes Email this PDF form
    First Direct No Yes  Yes – tailored to individual need Via this online PDF form
    Halifax Yes Yes ("where responsible") No  Online
    HSBC Yes Yes Yes Via this online PDF form
    Lloyds Yes Yes ("where responsible") No Online
    Nationwide Yes (if on payment holiday) Yes Yes Online
    NatWest No  Yes No TBC
    RBS Yes  Yes (temporarily) No TBC
    Santander Yes No, but you can apply for an increased limit in the usual way Yes, for up to 3mths Online
    TSB Case-by-case basis, get in touch Yes Yes Online

Of course, as we always suggest, if you are struggling to meet your debt repayments, and the help available won't get you through it, do seek non-profit debt-counselling help – they can guide you through what is needed. 

Quick questions

  • For the missed repayments, you'll either have the loan refinanced, and the missed payments and accrued interest spread over the remaining term (meaning monthly payments are higher), or you'd have extra payments added to the end of your loan, including additional interest (so the loan lasts longer). 

    Remember that while a payment holiday means you don't need to pay anything (or you can reduce payments down to a token £1), interest will still be charged on the loan until it's paid off – it's a repayment holiday, not an interest holiday. The one exception to this is if the lender calculates that continuing to charge interest would lead to long-term financial difficulty. 

  • Hundreds of thousands of credit card borrowers have been getting letters and emails – known as 'persistent debt notices' – asking them to pay off more of their credit card or face losing it.

    That's because under new rules from the financial regulator, if someone has been in persistent debt for 36+ months, usually only paying the minimum each month, lenders must offer them a reasonable way to repay their balance. If a customer ignores or refuses the offer of an affordable repayment plan, the lender must suspend or cancel their card.

    In light of the coronavirus crisis and challenges facing many credit card-holders at present, the Financial Conduct Authority has now relaxed these rules and the deadline for customers to respond – and ultimately for cards to be suspended – has been extended until 1 October 2020.

    See our Persistent Debt guide for full help, including whether you can transfer your debt to 0%.  

  • The three major credit reference agencies – Experian, Equifax and TransUnion – as well as the Financial Conduct Authority have all confirmed that customers' credit scores WILL be protected when they have an agreed payment holiday in place. This special measure is called an 'emergency payment freeze' and it means that a payment holiday will essentially be invisible on your credit report and help protect your payment history. 

    So if you were up to date with your payments before the payment holiday, you'll continue to be throughout. If you were already in arrears, your arrears will be kept at the same level, so the payment holiday months won't be counted as more missed payments.

  • No. The Financial Conduct Authority's guidance on payment holidays says that lenders should make sure borrowers don't suffer the normal consequences of non-payment, such as losing a 0% deal or getting a charge for missing a payment.

    So if you're on a 0% deal and you take a payment holiday, you'll keep the 0% deal.

  • No. If you have a guarantor loan and you apply for a payment holiday, it's an agreement between you and the guarantor lender that you don't need to make payments for the next three months.

    As you wouldn't be in arrears, the lender won't be able to ask your guarantor to make your payments for you.

You can get one-month payment holidays with no extra interest on payday loans

The FCA has said payday lenders must offer payment holidays for customers who are struggling financially due to coronavirus.

Payday loan customers can ask for a one-month payment holiday, and crucially no interest will rack up in that time. Lenders can choose to give a longer holiday, though there's no regulatory requirement to do so.

Once the payment holiday is over, payday lenders need to let customers make the deferred payment in an "affordable way", which could be as a single payment after the term of the loan ends, or as several instalments. 

You've now until 31 October to apply for a payday-loan payment holiday

However, unlike for most other borrowing products, people on a payday-loan payment holiday won't be able to ask to extend that holiday. If you can't make repayments, your lender should offer help in a different way. This could be to accept token payments, agree a repayment plan or reduce or waive interest while you repay.

Buy-now-pay-later, pawnbroking and rent-to-own firms must give three-month payment holidays 

The FCA has also said lenders in these three areas must give three-month payment holidays or partial payment holidays (where you pay some of what you owe but not the whole amount) to customers who are struggling due to coronavirus and who ask for help.

Plus, if you're already on a payment holiday, you can now ask to extend it for another three months, if you're still unable to make repayments. You can also move to a partial payment holiday, if you can pay something towards your finance agreement, but not the whole amount. 

How exactly the payment holiday works depends on what type of product you have...

  • Buy now, pay later. You can ask for a payment holiday or partial payment holiday of up to three months and you've got until 31 October 2020 to ask. If you get a payment holiday, and you're in a promotional period – say an initial 0% interest deal – this should be extended by the length of the payment holiday. However, if you are paying interest, this will continue to accrue during the payment holiday and will be added to what you owe once you start paying again. 

    Buy now, pay later covers in-store credit or catalogue credit where you get an interest-free or low-interest period at the start, often for a year, where you may not need to make any payments. After the initial period, you'll need to make monthly payments, and you may start being charged interest at this point. Buy-now-pay-later firms include Hitachi Capital and Consumer Credit Solutions, though the finance is arranged in store or online.  

    Many people have asked us if Swedish bank Klarna and its buy-now-pay-later service is included in this. Officially it isn't, as its finance deals aren't regulated in the same way. But when we asked Klarna, it said it was helping customers who were struggling to pay, and one option to help included payment holidays. If you're having difficulties with repayments, get in touch with its customer service team.  

  • Rent-to-own customers. Again, you can ask for a payment holiday or partial payment holiday of up to three months, and you've until 31 October to ask. If you need to keep using the goods, eg, fridge or washing machine, firms won't be able to repossess them due to non-payment till at least November, either. However, interest will continue to rack up during the holiday so only consider this if you really need it. 

    Rent-to-own stores, such as PerfectHome and the in-administration BrightHouse, let you take white goods and other household appliances home in return for weekly or monthly payments to 'rent' the item. Usually you'll be able to buy the item if you want to, during the contract or at the end, though you can return it at the end if you no longer need it or want to upgrade.

    Rent-to-own stores won't be able to charge customers any additional fees if social-distancing measures mean goods can't be collected or repossessed, whether that's because the store is shut, or the firm's agents can't get to you to take the goods back.  

  • Pawnbroking customers. You can ask for a payment holiday or partial payment holiday of up to three months here too (you can ask until 31 October), though again, you'll continue to accrue interest during the payment holiday.

    Your redemption period would also be extended for the same amount of time as the payment holiday. If your redemption period has already ended, the pawnbroker shouldn't serve notice to sell the item during the three months. If it's already told you it plans to sell your item, it should pause the sale.

    Rent-to-own and pawnbroking firms also won't be able to charge customers additional fees if social-distancing measures mean items can't be redeemed, collected or repossessed, whether that's because the store is shut or if the customer can't get to it, for example if they're self-isolating or shielding.

'Tailored support' available once payment holidays end

The FCA has said lenders should consider a range of support options – including waiving or reducing payments – under new rules to help customers who are still struggling to pay their loans, credit cards or other credit products once coronavirus-related payment holidays end, or those who first experience financial issues related to the coronavirus after 31 October. 

These new rules will be relevant to you if you fall into one of these three categories:

  • You've taken two three-month payment holidays and can't resume normal payments. For example, if you took a payment holiday in April and extended it in July, meaning you're close to finishing your second three-month payment holiday. Once the second payment holiday expires, you'll move on to the measures described below.
  • Your first payment holiday expires after 31 October and you can't resume normal payments. Once the payment holiday expires, you'll move on to the measures below.
  • You go on to experience payment difficulties after 31 October. This applies whether or not you've taken a payment holiday or other 'forbearance' (ie, the financial support providers may offer) in the past, or whether you find yourself newly in payment difficulties. 

Here's what the FCA's said lenders could offer people who have cards, loans or other credit products:

  • A (further) payment deferral. This is likely to be a short-term measure only, and may be offered if your circumstances are still changing, and you're not able to commit to a longer-term measure such as setting up a repayment plan.
  • A (further) period of reduced payments. If you can pay something towards your card, loan or other credit, but can't make the full contractual repayment, your lender may agree to you making reduced payments. Again, this measure is likely to be short-term only.
  • Waiving or reducing interest. If you can't meet your payments, the lender needs to make sure the amount you owe isn't rising out of control, so it may need to cut or waive the interest it's charging you. 
  • Agreeing a repayment plan. This is where your lender works with you to set up a plan that doesn't meet contractual repayments, but allows you to pay off the debt in a reasonable amount of time. 
  • Refinancing your credit agreement. This might mean, for example if you have a loan, that you agree to pay it back over a longer period, thus reducing the monthly payment you need to make (but as you're borrowing over a longer period, you'll pay more overall). This will only be offered where it's likely to be affordable, and your finances are settled enough to commit to a new agreement. 

However, unlike current payment holidays, which aren't recorded on your credit report, the FCA says lenders SHOULD report any further forbearance (such as extra payment deferrals) after 31 October to credit reference agencies. Lenders will need to let you know if the support they're offering you would have an impact on your credit report. 

It's worth noting that lenders are no longer banned from repossessing goods under rent-to-own agreements, and will be able to sell pawned items that are out of their redemption period after 31 October, but the FCA's rules do make it clear that this should be a last resort when all other attempts to find a reasonable solution have failed. 

You can now get three-month payment holidays on your car finance

There's now help available for borrowers with car finance plans, who can apply for three-month payment holidays if they're struggling due to coronavirus.

The Financial Conduct Authority – which regulates this sector – has brought in these measures on hire purchase (HP), personal contract purchase (PCP) and leasing deals, plus any other finance where the loan is secured on the vehicle. It doesn't just apply to cars – it covers van and motorbike finance too:

  • You can apply for a three-month payment holiday till 31 October 2020. If you're financially affected by coronavirus, your lender has to consider offering a three-month payment holiday. This means you don't need to make your scheduled payment, though interest will still accrue during this time.
  • If you're already on a payment holiday, you'll be able to extend it for up to another three months. If you're coming to the end of your first payment holiday and you can't start making payments again, you'll be able to extend.
  • You can ask for partial repayment holidays. If you can make some repayments, but not the full amount, you'll be able to agree a 'partial payment holiday' with your lender.
  • If it thinks a payment holiday isn't suitable, it must offer other help. This may apply if you're already in arrears or if your financial troubles are likely to go on for longer than three months. Your lender cannot say no to the payment holiday and not offer other help. 
  • Lenders can't repossess vehicles before 31 October if you're struggling due to coronavirus. They won't be able to end the finance agreement or repossess your vehicle due to coronavirus-related payment struggles.

Firms are also expected to "treat customers fairly", and not introduce unfair changes to customers' contracts if they're changing the loan deal to spread the cost of the extra interest over the remaining term. For example, if car prices depreciate temporarily due to coronavirus, your lender shouldn't use this to recalculate your PCP balloon payment (the large payment at the end you need to pay if you want to own the car). 

Similarly, if a customer isn't able to pay their balloon payment at the end of the deal but wants to keep their vehicle, the lender will be expected to "work with the customer" to find a solution.

How do I request a payment holiday from my car finance lender?

Some car finance lenders will let you make the payment request on their websites, such as Black Horse and Santander Consumer Finance. Others will need you to ring them, but all have information online about the best way to get in contact.

Many motor finance lenders are experiencing high call volumes, so if you don't get through first time, keep trying.

'Tailored support' available once car finance payment holidays end

The Financial Conduct Authority (FCA) has said car finance lenders should consider a range of support options – including waiving or reducing payments – under new rules to help customers who may still be struggling to pay once their payment holidays end, or those who first experience financial issues related to the coronavirus after 31 October. 

These new rules will be relevant to you if you fall into one of these three categories:

  • You've taken two three-month payment holidays and can't resume normal payments. For example, if you took a payment holiday on your car finance in April and extended it in July, meaning you're close to finishing your second three-month payment holiday. Once the second payment holiday expires, you'll move on to the measures described below.
  • Your first payment holiday expires after 31 October and you can't resume normal payments. Once the payment holiday expires, you'll move on to the measures below.
  • You go on to experience payment difficulties after 31 October. This applies whether or not you've taken a car finance payment holiday or other 'forbearance' (financial support) in the past, or whether you find yourself newly in payment difficulties. 

Here's what the FCA's said lenders could offer people who have car finance agreements:

  • A (further) payment deferral. This is likely to be a short-term measure only, and may be offered if your circumstances are still changing, and you're not able to commit to a longer-term measure such as setting up a repayment plan, or refinancing your car loan.
  • A (further) period of reduced payments. If you can pay something towards your agreed payment on your car finance, but can't make the full contractual repayment, your lender may agree to you making reduced payments. Again, this measure is likely to be short term.
  • Waiving or reducing interest. If you can't meet your payments on your car finance, the lender needs to make sure the amount you owe isn't rising out of control, so it may need to cut or waive interest. 
  • Agreeing a repayment plan. This is where your lender works with you to set up a plan that doesn't meet contractual repayments, but allows you to pay off the debt in a reasonable amount of time. 
  • Refinancing your car finance deal. This essentially means entering into a new agreement for the amount you owe, lowering the monthly payment but paying off the debt over a longer term.

    It's complicated in some car finance deals, especially personal contract purchase deals, as if you have the car for a longer period, the 'guaranteed future value' (the balloon payment at the end) will change, as the car will be older. If this is the case, be careful and make sure the lender explains the implications of a new deal to you.

    This will only be offered where it's likely to be affordable, and your finances are settled enough to commit to a new agreement. 

However, unlike current payment holidays, which aren't recorded on your credit report, the FCA says lenders SHOULD report any further forbearance after 31 October to credit reference agencies. Lenders will need to let you know if the support they're offering you would have an impact on your credit report. 

It's worth noting that under these rules lenders are no longer banned from repossessing your car after 31 October, but the FCA's rules do make it clear that this should be a last resort when all other attempts to find a reasonable solution have failed. 

  • This will depend on what type of finance agreement you have. 

    If it's a hire purchase agreement (where you get to keep the car at the end), the lender will let you know how and when to make the payments you deferred during the payment holiday. Only after the car is fully paid off will you get ownership of the vehicle transferred to you.

    For leasing, you need to return the car once the agreement ends. If you're unable to do so (say if you're shielding or self-isolating), your finance company may let you keep the car, but not allow you to use it. You'll still be liable to pay any of the rental payments you deferred that were due under the lease agreement.

    If this is what your lender says, and you can't use the vehicle, you may want to stop paying vehicle tax and insurance. If that's the case, you will need to do a statutory off-road notification (Sorn). This cancels your vehicle tax (and may net you a refund). Once you've done this you can cancel your insurance. However, you must have a garage or a drive to keep the car on; it can't be left parked on a public road.  

    For personal contract purchase, there are a couple of options of what you can do at the end of the agreement – pay a balloon payment and take ownership of the car, or hand it back.

    If you were planning to hand it back, then – again – you'll likely need to stop using it and may want to declare it off the road, unless you can agree a variation of your deal with the finance company. 

    If you were planning to pay the balloon payment, but you now don't have the cash to do so, it's best to talk to your lender and see if you can come to an arrangement about when and how you might be able to pay it. 

  • The measures above are specific to people who have suffered financially as a result of coronavirus, so if you were already in financial difficulty, they don't apply.

    Yet the lender isn't allowed not to help you. If you were in financial difficulty before Covid-19, the lender's expected to work with you to find a solution. This could include freezing or waiving interest, accepting token payments for a reasonable period of time, or pointing you towards debt advice. 

  • The three major credit reference agencies – Experian, Equifax and TransUnion – as well as the Financial Conduct Authority (FCA) have all confirmed that customers' credit scores WILL be protected when they have an agreed payment holiday in place. This special measure is called an 'emergency payment freeze' and means a payment holiday will essentially be invisible on your credit report and help protect your payment history. 

    So if you were up to date with your payments before the payment holiday, you'll continue to be throughout. If you were already in arrears, your arrears will be kept at the same level, so the payment holiday months won't be counted as more missed payments.

    However, the FCA says lenders SHOULD report any further 'forbearance' (ie, the financial support they provide, such as extra payment deferrals) after 31 October to credit reference agencies. Lenders will need to let you know if the support they're offering you would have an impact on your credit report. 

  • Yes. You have until 31 October 2020 to apply for the payment holiday.

    You don't need to take it immediately if you're not yet struggling or you'd rather keep paying. But even if you apply on 30 October, the lender still has to offer you a three-month payment holiday (or other more suitable help).

  • A voluntary termination (VT) is a little-known clause in the Consumer Credit Act, which allows you to get out of a hire purchase deal early. You can sometimes also get out of a personal contract purchase (PCP) agreement early, though you can't if you're leasing the car.

    A VT means that provided you've repaid at least half the total amount of finance on your contract, you can terminate the agreement and return the car to the finance company. This is a handy clause in a car finance contract if you find:

    • You no longer need the car.
    • You want to cut costs.
    • You can't afford repayments.
    • You can get a similar car for a lower cost than you would by making the remaining payments.

    If you decide to do this, the car should be in good condition when you hand it back. If not, you'll have to pay for any outstanding repair work that needs doing.

    If you're not yet halfway through the payments, you'll need to pay the amount outstanding to reach halfway before you can get out of the agreement. This is especially relevant in PCP deals, where the balloon payment is factored into the total amount of finance in the contract, so you may be a long way from reaching the halfway point if you have a PCP deal. 

    Important: If you decide to end the agreement early, make sure to get everything in writing and keep a copy so nobody can claim you have defaulted on your payments.

Overdrafts – get up to £500 interest-free if you're struggling

Earlier this year, we warned for weeks that overdrafts were the new danger debt – with interest rates set to rise to 40%, double those found on high-street credit cards.

These huge rates followed an overhaul of overdraft costs by regulator the Financial Conduct Authority (FCA). Its changes meant banks had to replace daily/monthly overdraft fees with a simple interest rate – the idea being to allow people to compare overdrafts more easily. But the changes couldn't have come at a worse time, as it turned out, as they were due to be implemented on or before 6 April, at the height of the coronavirus crisis.

Temporary FCA rules brought in during April ensured NO ONE would pay more than they did under the pre-April regime, for three months. Some banks complied with this by still charging their 40% rates, but offering £500 interest-free to all customers. Other banks dropped their rates temporarily, or capped total charges at the old rates. But the FCA dropped this requirement from 9 July, and all current-account providers have gone back to their standard overdraft rates.

However, if your income or expenses have been affected by coronavirus, there IS still help available...

  • Banks must give up to the first £500 of an overdraft interest-free for three months to customers struggling due to coronavirus. If you're struggling now, or think you will in future, you can ask your bank to make the first £500 of your overdraft interest-free for at least three months (or your whole overdraft limit if under £500). You've got until 31 October to apply for this help. 

  • You may also get your interest rate cut. For amounts over the interest-free limit that incur interest, you'll also be able to ask for a lower interest rate if you're struggling to pay.

  • If you've already asked for help, you can ask for it to be extended. If you already have an interest-free overdraft and are still struggling when it's due to end, you can ask your bank to extend it for a further three months. 

What is my bank doing to help on overdrafts?

Here's what help each bank is now offering, including details on how to apply if you need help (scroll down to find your bank):

Overdrafts – bank-by-bank coronavirus help info

Provider Help available (you'll likely pay standard rates if you get no help)
Bank of Scotland

- Until 31 Oct, if struggling due to coronavirus: You can apply online for up to the first £500 of your overdraft to be made interest-free for a three-month period (or apply to extend this period) + to discuss other help.

- Standard overdrafts: 39.9% interest on most accounts.

Barclays

- Until 31 Oct, if struggling due to coronavirus: You can apply online for a £500 0% overdraft + max 19.51% interest above that for two months from when you apply.

- Standard overdrafts: 35% interest.

Clydesdale Bank

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for a three-month period (or apply to extend this period) + to discuss other support (eg, lower interest).

- Standard overdrafts: 19%, 29% or 39% interest.

Co-op Bank

- Until 31 Oct, if struggling due to coronavirus: You can apply by email to have the first £500 of your overdraft made interest-free + for other support (eg, lower interest).

- Standard overdrafts: 35.9% interest.

First Direct

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for three months + have the interest above that capped at 19.9%.

- Standard overdrafts: £250 0% overdraft, 39.9% interest above that.

Halifax

- Until 31 Oct, if struggling due to coronavirus: You can apply online for up to the first £500 of your overdraft to be made interest-free for a three-month period (or apply to extend this period) + to discuss other help.

- Standard overdrafts: 39.9% interest on most accounts.

HSBC

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for three months + have the interest above that capped at a max 19.9%.

- Standard overdrafts: £25 0% overdraft (£500 for Premier custs), 39.9% interest above that.

Lloyds

- Until 31 Oct, if struggling due to coronavirus: You can apply online for up to the first £500 of your overdraft to be made interest-free for a three-month period (or apply to extend this period) + to discuss other help.

Standard overdrafts: 27.5% to 49.9% interest.

M&S Bank

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for three months + have the interest above that capped at 19.9%.

- Standard overdrafts: £250 0% overdraft, 39.9% interest above that.

Monzo (1)

- Until 31 Oct, if struggling due to coronavirus: You can apply in-app to have the first £500 of your overdraft made interest-free for three months.

- Standard overdrafts: Previously 50p-£1.50/day, will change to 19%, 29% or 39% interest but exact date still TBC.

Nationwide

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have your entire overdraft made interest-free until 31 Oct.

- Standard overdrafts: 39.9% interest.

NatWest

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for a three-month period + have the interest above that capped at 19.89%.

- Standard overdrafts: 19.49% to 39.49% interest depending on account.

RBS

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for a three-month period + have the interest above that capped at 19.89%.

- Standard overdrafts: 19.49% to 39.49% interest depending on account.

Santander

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for three months + have the interest above that capped at 19.9%.

- Standard overdrafts: 39.94% interest.

Starling Bank (2)

- Until 31 Oct, if struggling due to coronavirus: You can apply in-app to have the first £500 of your overdraft made interest-free for three months + have the interest above that capped at 15%.

- Standard overdrafts: 15%, 25% or 35% interest.

TSB

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for three months + have the interest above that capped at 19.84%.

- Standard overdrafts: 39.9% interest on most accounts.

Ulster Bank

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for a three-month period + have the interest above that capped at 19.89%.

- Standard overdrafts: 19.49% to 39.49% interest depending on account.

Virgin Money

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for a three-month period (or apply to extend this period) + to discuss other support (eg, lower interest).

- Standard overdrafts: 19%, 29% or 39% interest.

Yorkshire Bank

- Until 31 Oct, if struggling due to coronavirus: You can apply online to have the first £500 of your overdraft made interest-free for a three month period (or apply to extend this period) + to discuss other support (eg, lower interest).

- Standard overdrafts: 19%, 29% or 39% interest.

Note: Sadly there's no single definition of what 'struggling due to coronavirus' looks like, but if you've had a drop in income or an increase in your outgoings that's put pressure on your ability to pay bills or pushed you (further) into your overdraft, that would count. (1) You must already have an overdraft, and have had your finances affected by coronavirus. (2) You need to already have an overdraft and have suffered a drop in income due to coronavirus since 10 March. 

For further help and information, see our Cut overdraft costs guide, which includes info on how to get your overdraft to 0%. 

  • The rules apply to existing authorised overdrafts. If you have a bank account without an overdraft, you can apply for one in the normal way (unless it's a basic bank account). However, you would be subject to a credit check – and while banks are being told to do everything they can to help customers suffering a temporary loss in income, they still have an obligation to lend responsibly, so it's not certain you'll get an overdraft if you apply.

    If you do get accepted for an overdraft, then you'll open it on the terms available to all other customers. If that is an interest-free overdraft of up to £500, then you'll get that applied to your account too. If your bank hasn't applied interest-free measures to all accounts, then you'll be able to request the interest-free buffer if you're struggling financially. 

  • Yes, the overdraft will be shown on your credit report if you're using it. However, there won't be any changes as a result of part of (or all of) the overdraft becoming interest-free. As now, your credit report will show how much you owe on your overdraft. 

'Tailored' overdraft help to be offered after October

The help above is due to end on 31 October, but new rules from regulator the FCA mean that banks must continue to support customers who continue to have problems, or who first encounter problems, meeting the cost of their overdraft after this date.

The FCA rules say that rather than a 'one-size-fits-all' approach as currently (£500 interest-free and possibly a lower interest rate), banks should provide more "tailored support". This could include...

  • Reducing or waiving interest
  • Transferring the overdraft debt to a cheaper credit product, eg, a personal loan
  • Agreeing to reduce the overdraft limit (and balance) in stages

The rules came into effect on 2 October, meaning banks are now able to contact customers who are on overdraft support measures and work with them to find a tailored solution, based on their financial circumstances and ability to repay. 

More flexibility added to IVA and trust deed payment plans

In September, the Insolvency Service updated its coronavirus guidance around individual voluntary arrangements (IVAs) to give IVA users and their supervisors more options and flexibility if they are in financial difficulty.

If you've got an IVA – a legally binding debt repayment plan – and need extra help, it used to be that your supervisor had to ask your creditors to approve changes such as a payment break or reduced payments. This is called a 'variation' and can be a slow process.

However, the coronavirus guidance has been designed to increase the flexibility of variations and gives situations where the IVA supervisor can provide more help immediately with no need for approval from creditors.

The rules allow:

  • Your IVA supervisor to approve up to an extra six months of payment breaks. Initially the supervisor will grant three months, then can approve a further three-month break.

  • Your supervisor to approve a reduction in your monthly payments by up to 50% (the standard variation is 15%).

  • Your supervisor to apply "discretion" when considering whether redundancy payments in excess of six months' net take-home pay are required to be brought into the arrangement.

  • Critical workers (as defined in the Government list) to be exempt from the rules around bonuses and overtime – usually these need to go towards the IVA if they're over 10% of take-home pay.

  • That no attempt should be made to release equity during the pandemic unless the debtor wants this. Instead the supervisor has discretion to extend the IVA for 12 months. The old rules say if you are in the last year of your IVA and have a home with equity you may have to try to remortgage to pay some equity into your IVA.

If you take a payment break, the extra months will be added on to the end of your IVA term, so it may last longer than the standard five years in your case.

You have until 20 April 2021 to apply for a payment break or reduction on your IVA. So if you're meeting payments now but start to struggle further down the line, the option will still be around to help you. 

We've more information on IVAs and how they work in our Debt Solutions guide – but if you're in debt crisis, you should always, always take free debt advice before taking any serious formal steps. Citizens Advice, National Debtline and StepChange offer support and are there to help, not judge.

More leeway on trust deeds in Scotland

If you live in Scotland, the nearest equivalent to an IVA is a 'trust deed'. These generally last four years, during which time you'll pay an agreed amount to your creditors with any debt remaining written off. When you have a trust deed, all of your assets are passed on to someone who will look after your financial affairs, called a trustee.

Accountant in Bankruptcy, the Scottish equivalent of the Insolvency Service, has released guidance with a couple of measures to help people with trust deeds during the coronavirus crisis. These are:

  • Encouraging trustees to decide not to increase the length of a trust deed beyond four years if someone is unable to make payments due to Covid-19. Normally, the four years can be extended if you fail to meet your payment obligations.
  • Allowing trustees to discharge you from your debts at the end of your trust deed, even if you haven't been able to meet your payments due to Covid-19. Normally, discharge can be refused if you haven't made your payments.

To get a trust deed, you'll need to find an insolvency practitioner (IP) to administer your debts. Any of the professional debt advice charities will be able to advise you on whether a trust deed is right for you, and how to find an IP.

Bankruptcy application fees in Scotland reduced and completely removed for some

Since 27 May, new legislation in Scotland means that people receiving certain benefits who are applying for bankruptcy (also known as 'sequestration') won't pay any application fee at all.

The changes come as a response to the coronavirus crisis and will initially last until 30 September 2020, with a possibility of two six-month extensions.

You'll be eligible to pay no fees for your bankruptcy application if you receive any of the following benefits:

  • Universal credit
  • Income-based jobseeker's allowance
  • State pension credit
  • Child tax credits
  • Income-related employment and support allowance
  • Housing benefit
  • Income support
  • Working tax credit, as long as you're also receiving child tax credit, there is a disability or severe disability element to your tax credit and your gross annual income is £18,000 or less

The fees for those who don't qualify for the exemption have also been reduced as follows:

  • The fee for 'minimum asset' bankruptcies is now £50 (was £90). This is an option if you have few assets (see full criteria).
  • The fee for 'full administration' bankruptcies is now £150 (was £200). You have to apply for this type of bankruptcy if you don't meet the criteria for minimum asset bankruptcy.

The Insolvency Services for England & Wales and Northern Ireland have confirmed that there are no current plans to change the administration fees for bankruptcy in their jurisdictions.

Quick questions

  • An IVA is a formal agreement introduced by the Government as a way to help people who can't afford to pay back all of their unsecured debts. 

    It is a legally binding agreement only available in England, Wales and Northern Ireland. As above, if you're in Scotland, the nearest equivalent is a trust deed.

    You'll make repayments over a fixed term – usually five years – and your interest and charges are also frozen.

    At the end of the term, any remaining debt included in the IVA is written off, along with the interest and charges.

  • You can apply to make yourself bankrupt if you cannot pay your debts. However, bankruptcy will have a serious effect on your life and should be seen as a last resort. Make sure you've considered all other alternatives and received professional debt advice before you even think about going ahead with bankruptcy.

    Bankruptcy is a form of insolvency, which means your unsecured debts must be more than your assets (property, vehicles etc) for it to be considered.

    For more information on bankruptcy, see our Debt Solutions guide.

Savings, pensions & investments – should you get cash out?

Like mortgages, the savings market has been thoroughly shaken up. Rates are likely to drop as the Bank of England has made massive base rate cuts. But at the same time there have been moves to give people access to formerly locked-in savings if needed. Here's info on both:

How have savings been affected by the base rate cuts?

Rates are holding up surprisingly well since the base rate cuts, though we don't know how long that will last for. So you may be able to get in ahead of the curve with fixed products, where once opened the rate is locked in. While there's always the slim chance rates may not fall (or even improve), fixing definitely gives you certainty.

Yet with fixed savings, you lock your money away for a set time for a set rate, though there are a few accounts that'll let you access the cash, usually for an interest penalty – so it's best to do this with money you're sure you won't need. See top fixed savings for your options.

Banks will allow you to access existing fixed-rate savings

Normally if you've locked cash away in a fixed-rate savings account, you have to pay a penalty to get it out before the fixed term's up. Yet 10 banks (Bank of Scotland, Barclays, First Direct, Halifax, HSBC, Lloyds, Nationwide, NatWest, RBS and Santander) have told us they'll waive penalties for existing customers affected by the pandemic who now need their savings to cover living costs.

It's worth noting though that with interest rates dropping, your money may well be locked away at a rate that's now impossible to get, so only do this if you really need to. 

Temporarily high savings balances now protected for 12 months

The Financial Services Compensation Scheme (FSCS) usually protects savings deposits up to the value of £85,000 per person, per banking group. The protection means that if the bank goes bust, your savings are safe up to that limit. 

A few years ago, special provisions for temporary high balances were introduced, meaning balances up to £1 million for a period of six months, if the high balance came from a 'life event'. These could include selling your home, inheritances, redundancy, and insurance or compensation payouts. 

In light of the coronavirus, and the difficulties people may have in spending or moving these temporary high balances, the FSCS has extended this protection. Now any high balances resulting from a life event deposited between 6 August 2020 and 31 January 2021 have £1 million protected for a period of 12 months rather than six.

Any qualifying temporary high balances deposited on or after 1 February 2021 will have the usual six months' protection. 

You can read more about temporary high balances in our Are your savings safe? guide. 

Lifetime ISA withdrawal penalty dropped from 25% to 20%

On 1 May, the Treasury announced that people would be able to withdraw their cash from Lifetime ISAs without having to pay the full withdrawal charge. Currently, you're charged 25% of the amount withdrawn if you take cash out before you're 60 for anything other than buying a property.

But that's now been cut to 20% for withdrawals made between 6 March 2020 and 5 April 2021. This means LISA account holders will have to pay back any Government bonus they have received, but won't have to pay the additional withdrawal charge, which is equivalent to 6.25%. Anyone who has withdrawn their money since 6 March and who paid a 25% charge will have the difference refunded.

If you've saved in a cash Lifetime ISA, this means you'll be able to get all the money back that you put in. For stocks & shares ISAs, what you'll be able to get back depends on how well your investments have done. See our Lifetime ISA guide for full information on how Lifetime ISAs work. 

How are pension investments and stocks and shares affected?

Over to Martin for his view on this one...

'Markets are unpredictable, but day-to-day moves are irrelevant to most'

With stocks and shares or pension investments, there are only two prices that count: the price you buy at and the price you sell at. Markets move up and down all the time, and you won't lose money until you crystallise by selling.

The markets have gone down – they may bounce back in a mild outbreak, or they may stay down for a long time if this becomes a long, systemic outbreak and hits the economy. Markets are unpredictable and there aren't any answers – but for most people (unless you are imminently about to sell or take your pension and convert your investment into cash), the day-to-day moves on the back of coronavirus are mostly irrelevant. It's only relevant if you're looking to crystallise or you need the money now.

Taking the money out right now may be a really good idea if the markets drop further, or may be a really bad idea if the markets recover. And just like always with markets, no one knows which of those two eventualities is going to happen. So unless you're someone who plays the markets, I would carry on with what I was planning to do anyway.

Pension holders targeted in spate of scams

Sadly scammers have seen the coronavirus crisis as an opportunity. One of the scams is targeting pension holders, saying they can access cash if they transfer their pension. And with many desperate for cash, this scam often finds a target – and victims lose an average of £82,000 through pension scams.

If someone calls you and says they're from your pension company, or are from a financial adviser offering you a free pension review, don't continue with the call.

If they say they're from your pension company, say you will call them back, and then look up the company's contact details online or on your policy documents. NEVER call a number they've given to you. If it's a legitimate call, the caller won't mind.

If you're under 55 and someone calls with an offer to access your pension, don't continue. You can't access your pension before you're 55 unless you're terminally ill. Anyone offering this isn't legitimate.

Similarly, if someone asks you to transfer your pension to their company or put it under their management, do your homework on the company before taking any action. You can check if pension companies or advisers are registered on the FCA Financial Services Register, a public record that shows details of regulated firms, individuals and other bodies. 

Sadly this is just one of many scams we've seen during coronavirus. See our scams section below for more.

Help for renters, incl new rights to a longer eviction notice period

If you'll struggle to pay rent during the coronavirus outbreak you should speak to your landlord as soon as possible to let them know your situation and work out a repayment plan. Government guidance is "encouraging tenants and landlords to work together to put in place a rent payment scheme".

We've seen this guidance be interpreted in different ways though. While some landlords are proactively contacting tenants and reassuring them that they can work out new repayment arrangements if they suffer financial hardship, others are playing hardball, and not offering to make any adjustments. For social landlords, local government and housing association representatives have already said that no social renter should be evicted due to coronavirus.

If you're struggling, as well as talking to your landlord, check to see if you're receiving all the financial help you're entitled to, which may include universal credit. The Government increased the housing allowance part of universal credit in April so that the local housing allowance would cover at least 30% of the lowest rents in your area, which may help you. See our Coronavirus Universal Credit & Benefits guide for more.

Tenants in Wales who are struggling to pay their rent arrears may also qualify for a new 1% APR loan over one to five years from the Welsh Government, paid directly to the landlord. There's not much information on how to apply yet though, however we will update this guide when we know more.

Try to find a solution with your landlord

While private landlords with a mortgage are eligible for a three-month buy-to-let mortgage payment holiday (and a further three-month extension if needed), this will only help if your landlord has a mortgage and uses your rent to pay it.

Many landlords just have one extra property, often inherited and mortgage-free, and use the income from rent for living expenses. In the current crisis, these landlords aren't eligible for any Government help (not even universal credit). So if your landlord's in this position, they may be struggling too.

When you talk to your landlord, be sensitive to their circumstances, and try to find a solution that suits you both.

Eviction hearings now going ahead in all four UK nations

However, if your landlord does want to evict you, they can't go straight to court. There's a strict process they have to follow...

  1. They have to give you notice that they wish to terminate your contract. Due to the coronavirus crisis, the minimum notice period landlords must give has been extended (previously it was typically a minimum of 28 days).

    The latest rules mean tenants in England, Scotland and Wales must now receive at least six months' warning (12 weeks in Northern Ireland) before they have to leave the property. There are some exceptions to this rule where the notice period can be shorter, though this is usually where the cause for eviction is due to anti-social behaviour or if you're more than six months behind on rent.

  2. Taking you to court. If you've not left by the time the notice period is up, your landlord can then choose to start court proceedings (or tribunal proceedings in Scotland), though courts from all four nations were banned from hearing eviction cases to help people during the pandemic. Cases in England and Wales were the last to restart, resuming on 21 September, with hearings having already reopened in Scotland and Northern Ireland.

    Courts will only be able to hear cases where the required notice period has passed and if the landlord chooses to restart court proceedings. Rules in England and Wales also require landlords to provide information about how tenants have been affected by the coronavirus pandemic. Without this, the case can be rearranged for a later date.  

  3. Enforcing the eviction. If a court upholds the case, an eviction can be enforced, which usually means bailiffs are appointed and can gain entry to the property to take possession of it, or to remove your belongings and change the locks. However, it can take weeks or months for the eviction to happen after the court allows it.

    Rules in England and Wales mean you can't be evicted between 11 December and 11 January as part of a "winter truce" over evictions. You also won't be able to be evicted during any local lockdown that restricts inside gatherings.

Here's what's happening with evictions in each UK nation, in terms of notice periods, and when court eviction hearings are taking place:

Nation Current notice landlords need to give (i) Are courts hearing cases?
England Six months (ii) Yes, since 21 Sep.
Wales Six months (iii) Yes, since 21 Sep.
Scotland Six months (iv) Yes, since 9 Jul, though only for cases where the eviction notice was issued before 7 Apr or for cases of anti-social behaviour where the three months' notice has passed. For all else, cases cannot be heard until the six-month notice period has elapsed, which will be in the beginning of Oct. 
Northern Ireland 12 weeks Yes, since 31 Aug, though only for cases where the eviction notice was issued before 24 Mar or those issued after where the notice period has since passed.

(i) Applies to notices given up to 31 Mar 2021. (ii) Four weeks required if given for anti-social behaviour, or if you're more than six months behind on rent. (iii) Three months' notice needed if given for anti-social behaviour. Can be shorter if you're more than six months behind on rent. (iv) 28 days' notice needed if given for anti-social behaviour. 

What should I do if I've received an eviction notice from my landlord?

It's worth saying that you need to be given at least the notice required in your country before your landlord can apply to the court or tribunal for a hearing date.

If they do this, you won't have to leave your property immediately – it's still a process and, from hearing until actual eviction (if granted), can take weeks or even months.

If your landlord's trying to evict you, head to Shelter (in England, Scotland or Wales), Housing Advice NICitizens Advice (not NI, but it signposts to local NI community advice centres) or your local Law Centre (not Scotland). All of these sites have lots of helpful information, plus many have advisers who can speak with you about your rights, what to do next, and potentially even help in court.

What's happening in the mortgage market?

Lockdown and coronavirus more generally have played havoc with the mortgage market. Many high loan-to-value deals have been pulled, meaning people need bigger deposits for their mortgages. We've more info on what's happening and what to do about it in this section.

Mortgage market tightens for homebuyers and remortgagers

Keys with a keyring in the shape of a house

Many lenders reacted to the coronavirus crisis and lockdown by withdrawing many mortgages from sale, making it harder for borrowers with lower equity or deposits to get a new deal. Much of this was due to the fact that lenders weren't able to send valuation agents to people's homes to assess their value.

Lenders have tightened criteria by only lending where you have a decent deposit or equity, and where the property is relatively "normal". So if you're looking at new-builds, flats, high-value properties, or where the property's built mainly from non-standard materials (eg, wood, concrete), you'll now have much less choice of mortgage.

Lenders almost across the board have pulled mortgage deals at 95% loan-to-value (the percentage of the property value you're loaned as a mortgage) for first-time buyers and home-movers. And only a few will offer 90% loan-to-value (LTV) mortgages, with others now having a maximum 80% or 85% LTV ratio.

This makes things difficult if you're a new buyer, or if you got your first mortgage at 95% LTV and haven't made many inroads into that debt. If you're looking for a new mortgage, or a remortgage, a good broker is worth their weight in gold. Brokers have the latest information on LTV ratios for each bank, and will be able to match you with lenders that are most likely the best fit for your circumstances.  

Stamp duty surcharge deadlines extended

Homeowners in England and Northern Ireland who buy a second home face a 3% surcharge on the amount of stamp duty they have to pay on the additional home. However, if they sell their old property within three years of buying the new one (leaving them with one home), they can claim a refund of this 3% surcharge.

Those who were coming to the end of their three years this year, and who have faced difficulties selling their home due to coronavirus or other circumstances outside of their control, may be able to get a refund even after the three years have elapsed.

If this has happened to you, you'll need to wait until you've sold your old home, then write to HM Revenue & Customs explaining the reason for the delay in selling. 

Homeowners in Scotland face a similar 4% surcharge and normally have 18 months in which to sell the old property to be able to claim a refund. That's now been extended to three years if you bought your second home between 24 September 2018 and 24 March 2020.

We're checking if there are any changes in Wales, where people normally have three years in which to sell, and will update this guide when we know more.

Energy bill help, incl how to top up prepaid meters

Energy suppliers are offering help to those who may struggle to pay bills as a result of the coronavirus pandemic – both prepay and credit meter customers. 

  • The Government and energy suppliers have agreed to emergency measures to help prepayment customers unable to top up during the pandemic, including posting cards loaded with emergency credit to those who are self-isolating, adding discretionary credit to your meter and allowing you to nominate someone to top up for you. 

    Regulator Ofgem has also written to all suppliers, saying it expects them to "take proactive measures to support prepayment meter customers, including customers in vulnerable circumstances".

    If you can't leave home to top up at your usual shop, Ofgem suggests you arrange for a trusted person to take your card and do it for you (it may need disinfecting first), and leave your meter box unlocked if it's outside your home.

    And if you can afford it, and you're not self-isolating already, energy firms are encouraging people to try to top up a little more than usual each time to try to build up some credit.

    Ultimately, suppliers will deal with issues on a case-by-case basis, so the best thing you can do if you have to self-isolate or are struggling to pay your bill due to coronavirus is to contact your provider as soon as you can.

    Here's what the prepay energy providers have committed to so far:

    Supplier What can it do? How to get help (1)
    British Gas

    Hasn't yet committed to sending out top-up cards or keys loaded with credit.

     

    If you're in isolation and you think you'll use up your balance and emergency credit, contact British Gas and it has said it'll find a solution on a case-by-case basis. See its FAQs.

    Call 0333 202 9802
    EDF

    EDF says it can post top-up cards or keys loaded with credit to your home.

     

    EDF has advised people who self-isolate to ask friends and family to help them top up. Where this is not possible, it says it can deliver 'preloaded' cards and keys if you need to self-isolate – this balance will be collected back at a "suitable rate" later. See its FAQs.

    Call 0333 200 5100
    E.on

    E.on says it can post top-up cards or keys loaded with credit to your home or send an engineer to top up your meter.

     

    It says if your electricity meter falls below 50p of emergency credit, or you're off supply for gas, it can send a card or key in the post, or send an engineer to top up for you. However, it advises to top up a little extra or asking a trusted person to help to prepare for self-isolation. See its FAQs.

    Call 0345 052 0000
    Npower

    Hasn't yet committed to sending out top-up cards or keys loaded with credit.

     

    Npower has said it is looking at increasing emergency credit to £45 to help those self-isolating. It also advises topping up more than usual in advance if you can or asking a trusted person to help. See its FAQs.

    Call 0800 073 3000
    Scottish Power 

    We've yet to hear back from Scottish Power – however, it has published guidance on its website

     

    Scottish Power has advised people who need to self-isolate to ask a friend, neighbour or family member to top up for them, and to add more credit to their meter than normal. 

    Call 0800 027 0072

    SSE  SSE says it can post top-up cards or keys loaded with credit to your home.

    It's encouraging customers to keep at least 14 days' worth of credit on their meter, and says it can help by reducing any debt repayments people are making through the meter.  See its FAQs
    Call 0345 026 2658
    Ovo (2)

    Hasn't committed to sending out top-up cards or keys loaded with credit.

     

    Ovo is advising people to ask friends, family or neighbours to top up for them – it urges them to disinfect their card before handing it to anyone else. It's also set up a dedicated team to help those in danger of losing supply. See its FAQs

    Call 0330 102 7517
    Bulb 

    Bulb says it can post top-up cards or keys loaded with credit to your home.

     

    Bulb has advised people who self-isolate to ask friends and family to help them top up. Where this is not possible, it says you can pay online and a preloaded card will be delivered. See its advice.

    Call 0300 303 0635
    Robin Hood Energy (3)

    Hasn't yet committed to sending out top-up cards or keys loaded with credit.

     

    It's advising customers to top up meters more than usual, if they are able to, and will always provide an "emergency support function" for prepay users. It also told us it's working up a number of plans to help anyone struggling to pay or top up. See its FAQs

    Call 0800 030 4567
    Co-op Energy  Co-op is now run by Octopus Energy, which has told us it is working through its guidance and will update us. Call 0800 093 7547
    E Energy We've yet to hear back from E Energy. Call 0333 103 9575
    Green Network Energy Green Network Energy has told us it is currently working through its guidance to customers and will update us. Call 0800 520 0202
    Green Star Energy 

    Green Star Energy (which is now part of Shell Energy) says it can post top-up cards or keys loaded with credit to your home.

     

    It has advised people who self-isolate to ask friends and family to help them top up. Where this is not possible, it can arrange for a preloaded card to be delivered to you. See its FAQs.

    Call 0800 012 4510
    Omni Energy Omni Energy says it can post top-up cards or keys loaded with credit to your home.

    It advises those who can top up in advance and build up credit on the meter to do so, or to ask a family member or friend to take their key or card to the shop for them. It also says it has emergency credit to maintain supply. 
    Call 0113 457 3219
    Utility Warehouse

    Hasn't yet committed to sending out top-up cards or keys loaded with credit.

     

    Utility Warehouse has advised its customers to top up a bit extra – it recommends having at least two weeks' energy on your meter. It also suggests identifying a trusted third-party who can pick up your top-up card or key and take it to a shop in case you're unable to leave your home. 

     

    Call 0333 777 3247 
    Utilita

    Hasn't yet committed to sending out top-up cards or keys loaded with credit.

     

    However, Utilita's main focus is smart prepayment, which allows people to top up remotely. If you've a non-smart meter, it advises to top up more than usual or ask a friend or family member to help. It also says it has called all its customers over the age of 80 and advised them of how to top up. 

    Call 0345 207 2000
    (1) Suppliers are urging you to contact them via email or live chat first, where possible, with any non-urgent queries. (2) Ovo prepayment customers are supplied under the brand 'Boost'. (3) Advice also covers anyone supplied by Angelic Energy, Beam Energy, Citizen Energy, Ebico, Fosse Energy, Great North Energy, The Leccy, Ram Energy, Southend Energy, White Rose Energy and Your Energy Sussex.
  • The Government has also moved to help those on standard credit meters who are struggling.

    Most importantly, your supply won't be cut off – disconnections of standard credit meters have been completely suspended. What's more, all energy suppliers have agreed to provide support to anyone in financial distress, which can include debt repayments and bill payments being reassessed, reduced or paused.   

    Exactly what help suppliers will offer will depend on your individual circumstances, but here's what firms have told us about the measures they can offer to some customers:

    On a credit meter? What firms are offering some customers

    Supplier Delaying bill due dates? Removing late payment charges? Allowing repayment over longer periods? Reassessing monthly payments? Offering alternative ways to pay? How to get help (1)
    British Gas Yes Yes No No No See FAQs or call 0333 202 9802
    EDF Yes No Yes No Yes See FAQs or call 0333 200 5100
    E.on Yes No No Yes No See its advice or call 0345 052 0000
    Npower Yes No Yes No Yes See FAQs or call 0800 073 3000
    Scottish Power Yes No Yes No Yes See FAQs or call 0800 027 0072
    SSE Hasn't committed to any specific measures, but will offer help on a case-by-case basis. See FAQs or call 0345 070 7373
         
    Bulb No No Yes No Yes See its advice or call 0300 303 0635
    Co-op Energy (2) Hasn't committed to any specific measures, but will offer help on a case-by-case basis. See its statement or call 0808 164 1088
    Octopus Energy  Hasn't committed to any specific measures, but will offer help on a case-by-case basis. See its statement or call 0808 164 1088
    Ovo Energy No Yes Yes Yes No See FAQs or call 0330 303 5063
    Shell Energy Yes No Yes No No See its advice or call 0330 094 5800
    Small suppliers While some have committed to measures such as not increasing direct debits or offering more flexible payments, most suppliers haven't committed to any specific measures, but will offer help on a case-by-case basis. See supplier contact details 
    (1) Suppliers are urging you to contact them via email or live chat first, where possible, with any non-urgent queries. (2) Co-op Energy's response is handled by Octopus Energy, which now runs the brand. 

    Do a whole of market comparison via our Cheap Energy Club to see how much you could save by switching – many can save over £340/year by switching from the average big six standard tariff.

Need extra support? Sign up to the Priority Services Register 

Vulnerable customers (see who counts below) can also sign up to the Priority Services Register with their supplier or network operator. If you're on the register, you'll be eligible for certain free services, including:

  • Advanced notice of planned power cuts.
  • Priority support in an emergency (such as alternative heating facilities if your supply is interrupted).
  • Messages from your supplier shared with someone you've nominated (such as family or a carer).
  • Arrangements to ensure it is safe for you to use a prepayment meter if you have one. If not, you may get a credit meter for free or get your meter moved for you.
  • Meter reading services at regular intervals, if you or a nominated person can't take a reading.
  • You can sign up to the Priority Services Register if:

    • You're of pensionable age.
    • You're disabled or chronically sick.
    • You have a long-term medical condition.
    • You have a hearing or visual impairment or additional communication needs.
    • You're in a vulnerable situation (ie, you can't top up prepayment due to injury, or mental health conditions that may impact understanding of bills).
    See regulator Ofgem's website for more info on the Priority Services Register.

What if coronavirus has stopped me having a smart meter fitted?

Providers put the installation of smart meters on hold during lockdown, with engineers only able to support customers in emergency situations, such as loss of supply.

Suppliers are now installing smart meters again, though appointments may be limited still, and they won't install them if anyone in your household is self-isolating, is in a higher-risk group or has had coronavirus symptoms in the last month.

If you're on a tariff that requires smart meters, precautions are in place for home visits and you don't have to get them fitted until you feel comfortable letting an engineer into your home.

See our Smart Meters guide for more information on what they are, and whether you can get them. 

  • Suppliers that have started installing smart meters again all have measures in place to ensure they don't visit anyone who is self-isolating or has coronavirus symptoms. So if you have an appointment, but any of the following applies to you, contact your provider before your appointment and let it know if anyone in your home:

    • Is self-isolating
    • Has any underlying health issues, or is at an increased risk should they contract coronavirus
    • Has tested positive for coronavirus in the last four weeks

    Suppliers should also call you on the day of your appointment to check these before an engineer visits. If the answer is yes to any of them, the firm will reschedule.

    Once the engineer arrives, they should follow strict social distancing and safety procedures, including:

    • Always keeping at least two metres from anyone. This may mean you'll be asked to stay in a different room during the installation.
    • Engineers should wear appropriate personal protective equipment the whole time. These will be sanitised between each home visit.
    • The engineer should wipe down any surfaces they touch before and after the installation.
    • You won't get a demonstration of how your smart meters work right now, though the engineer will leave a leaflet if you want.
    • If you have any questions about your smart meters, or your home's energy efficiency, firms ask that you do this over the telephone, rather than with the engineer in your home.
    • The engineer will remove all waste from the installation.  

Working from home? Claim tax back on additional home expenses, eg, electricity

If you're currently required to work from home full or part-time as your normal office isn't open due to coronavirus restrictions, you can claim for increased costs as a result, eg, heating and electricity.

In practice, working out these costs is tough, so instead you can claim on a £6/week rate. This works one of two ways:

  • Employers can pay you £6/week extra, free of tax. Yet right now, with many firms struggling, asking may be bad timing, so...
  • If not, you can claim tax relief on £6 of income a week, which for basic 20% taxpayers is £1.20/wk (about £60/yr) and 40% taxpayers £2.40/wk (about £120/yr). You can apply directly to HM Revenue & Customs for this tax relief – and as long as you're claiming relief on the equivalent of £6/wk for the period you worked at home, you won't have to provide evidence of the extra spending.

There's full info on how to claim in Martin's 'Working from home due to coronavirus? Claim tax back on extra costs' blog.

Broadband and TV help, incl switchers' info

Many are asking whether they can still switch to a different broadband provider, or what to do if they'll struggle to pay their bill. Plus, we've news of how to pause TV sport subscription costs. 

Can I still switch broadband provider?

For most, switching during the current crisis shouldn't be a problem as your switch can often be done remotely –no one needs access to your home. 

Yet for those switching from cable (eg, Virgin), you may need to wait. This is because most other firms use the BT Openreach network and while its engineers are now doing installations again, it's likely there's a backlog after they were put on hold due to social distancing.

When you do switch, your broadband may be down for up to two hours, but in rare cases the outage can be longer if anything goes wrong, so it's worth considering at this time when broadband's so crucial.

What help's available if I can't pay my broadband bill?

If you're struggling to pay your bill, a number of providers including BT, Sky and Vodafone have told us they'll help. All providers say that anyone who's struggling should contact them as soon as possible to discuss their options. 

Ofcom, the broadband regulator, has told firms not to disconnect people who can't pay: "We expect providers to keep customers connected even where they are struggling to pay. We'll be asking them to suspend all disconnections, except those requested by the customer. We are in close contact with companies about what further support they can offer to customers in financial difficulties."

Help with other household bills

Coronavirus has had a huge impact on many people's ability to keep up with their household bills. Here we look at what help's available with other costs, such as council tax and water bills.

Struggling with council tax? Speak to your local authority – you may be able to take a council tax 'holiday'

The Local Government Association (which represents councils in England and Wales) has told us that all local authorities in these countries are putting help in place for people who are facing financial hardship as a result of coronavirus. COSLA, its Scottish equivalent, has told us that councils there are standing by to help too. If you're in Northern Ireland, see more on the council tax-equivalent domestic rates system below.

We contacted a selection of 20 councils across England, Wales and Scotland. All of those to reply said they were offering some sort of support, and that this would depend on people's circumstances. Help offered could include...

Payment holidays and payment plans

All but one of the councils we heard from were giving those struggling with their 2020/21 council tax the chance to put off paying some of their bill to a later date – though you'll need to ask for this.

Of those that may offer it, it's judged on a case-by-case basis and the deferral length varies, so there's no certainty. Some had pushed April and May's payments back so payments started in June, others were more generous, offering a longer payment deferral. Do check with your council what it's offering.

While not all local authorities were offering a payment deferral, all we checked with were offering payment plans, where you could work out an affordable repayment schedule with the council.  

Bill reductions if you're on universal credit, other benefits or a low income

Council tax reductions are long-standing discounts of up to 100% off bills for those on benefits or a low income. It doesn't matter if you own your own home or rent, or whether you're employed or not. All can apply. Yet what you get depends on:

  • Where you live (each council runs its own scheme)
  • Your circumstances (eg, income, number of children, benefits, residency status)
  • Your income, including savings, pensions and your partner's income
  • If children live with you
  • If other adults live with you

Some councils may let you backdate the reduction, but by how many months varies by council so you'll need to check, though the sooner you do it, the sooner your bill will be reduced. On top of the discount, in England, you may also get an extra £150 off your bill backed by a £500 million Covid-19 hardship fund. Apply for a council tax reduction at Gov.uk.

How do I check what my council is offering?

Sadly there's no gold standard of help here, so what's available to you depends on where you live. For full details of what you can get, you'll need to contact your local authority – use the Gov.uk checker to find yours.

In addition, it's worth checking you're paying the right amount of council tax in the first place:

Claim any council tax discounts you're entitled to – for example, people living alone, students and people with 'severe mental impairments' (or living with someone who has) can all get discounts.
- Also check your home's in the right council tax band (England and Scotland only).

Rates bills in Northern Ireland were delayed until June

If you live in Northern Ireland, you won't have got your rates bill as normal on 1 April. The bill was instead sent in June – though it'll still cover 1 April 2020 to 31 March 2021. If you pay by monthly direct debit, this would have been updated automatically to collect payments between June 2020 and March 2021.

If you're in arrears paying rates, no new action will be started to recover the debt until after the current crisis has passed. If you've already had recovery action started against you, this won't be cancelled but it will be suspended for the time being and you won't be pursued for the debt until after the crisis.

You can also check if you're entitled to any support with paying your rates – which could include low income rate relief, the Rate Rebate Scheme for people on universal credit or housing benefit rate relief. There's full info on the NIdirect website.

Struggling with water bills? There's help available

Water companies in England and Wales have stepped up efforts to help customers who have lost their jobs or had their incomes cut due to the coronavirus pandemic. The companies are encouraging households with immediate or short-term issues paying their bills to get in contact as soon as possible so that they can receive help. 

All water companies are halting debt collection visits. You may still get a call, but they won't be sending anyone round or applying for any new court orders during the current crisis. 

The best thing to do if you need help is to contact your water company or check its website for an online form. All companies offer some kind of help, which may include:

  • Offering payment breaks or payment holidays. Some providers can pause your payments for a time. 
  • Flexible payments. Some will reassess your current payment plan, and lower it while you're struggling. 
  • Social tariffs. These are special tariffs each firm offers to reduce or put a cap on what you pay.
  • Help with arrears. Suppliers can wipe arrears if you can agree to make regular payments.
  • Capped tariffs for those on water meters. Via a scheme known as WaterSure, providers offer capped tariffs if you get certain benefits and need to use a lot of water for medical reasons or because you have a certain number of school-age children.
  • Pay directly from benefits. Your bill payment can be taken directly from your benefits.
  • Charitable trusts. Some providers have charitable trusts that offer grants to struggling households.

We've rounded up the help providers have said they offer below – though what you’ll actually be offered if you’re struggling will depend on your circumstances.

In vulnerable circumstances? Sign up to the Priority Services Register

All water firms in England and Wales have schemes that allow customers to register for free additional support if they can't leave their home, have limited mobility, have sight, speech, hearing or cognitive impairment, or have a serious illness or a mental health condition. 

Help includes: 

  • Uninterrupted supply of water, even during wider-scale service interruptions. 
  • Help managing and paying bills, including home visits, reading meters and providing alternative bill formats such as Braille or additional languages.
  • Help identifying that the person at the door is a genuine water company employee.

You can now claim child benefit for newborns before registering their birth

Child benefit lets you claim £21.05 a week for a first child, and £13.95 a week for additional children, though individually you'll need to be earning less than £50,000 to be able to get the payments in full and less than £60,000 to get anything (both of you will need to earn less if you both work). It's a complicated system for some (especially those earning over the £50k threshold), so see our Child Benefit guide for full details. 

However much you earn, you usually need to register your child's birth before you can claim child benefit for them. Most registry offices are now reopening and operating some sort of service. But if you can't register your child, you can still claim now and register the birth later. This applies until further notice to all newborns who are not yet registered.

If you're a first-time parent wanting to register for child benefit, here's how to do it:

  1. Fill in the usual CH2 claim form – you'll need you and your partner's personal info including national insurance numbers and your child's details. Note that you won't be able to provide all the details asked for in Section 3 about your child's birth certificate. Instead...
  2. Make sure you add a note to say that you haven't been able to register the birth due to Covid-19.
  3. Send the form by post to Child Benefit Office, Washington, Newcastle upon Tyne, NE88 1ZD.

You will need to send the birth certificate later on when you have it so your claim can be fully checked. 

Already claim child benefit for an older child?

If you already claim child benefit for another child and want to add your newborn, you can add their details over the phone on 0300 200 3100. You'll just need your national insurance number, or existing child benefit reference number, and to tell HM Revenue & Customs that you haven't been able to register the birth due to Covid-19.

Coronavirus insurance need-to-knows, incl MoneySaving tips

Coronavirus has had an impact on the insurance industry too, and not just on travel policies (see our travel guide for your rights there). While you'll need (or want) to keep paying for most of your insurance products, we've pulled together some tips on how you may be able to save money on any policies, and detail the effects of coronavirus on insurance and the cover available.

Help if you can't pay your insurance premiums extended till 31 October

The Financial Conduct Authority (FCA), which regulates the insurance industry, has confirmed customers who are struggling to pay their premiums due to coronavirus, or who have had a change in lifestyle resulting from it, can ask for help any time up to the end of October. 

This help can include reviewing your cover level to potentially reduce premiums or payment holidays of up to three months.

The measures cover all types of general and protection insurance, which means it covers car, van and motorbike, home, travel, income protection, life and private medical insurance, as well as boiler cover and critical illness cover, to name just a few. It also covers premium credit providers – these are the companies that give you a 'loan' meaning you can pay monthly premiums rather than annual.

What help can I get from my insurer if I'm struggling or my circumstances have changed?

If you've been affected by coronavirus, for example your usual income has dropped or you're driving less as you're not going to work, this is the help that may be available from your insurer:

  • It can reassess the level of cover the insurance provides. If a customer contacts their insurer, it should assess if the insurance is still suitable. For example, if a car insurance customer is now driving much less, the insurer should look at lowering the mileage covered by the policy, which could result in the customer benefiting from a lower premium (or a refund if they pay annually). 

  • It can remove any unneeded extras on the policy. 'Add-ons', such as key cover with car insurance that's no longer needed as you're not driving, could be removed. If so, premiums may be reduced accordingly. 

  • It can waive admin fees for changes to cover levels. Some insurers charge admin fees if a customer makes changes to their policy midway through its term. Most insurers we've spoken to have removed these change fees if customers are in financial difficulty, or if the policy change is needed due to coronavirus.

  • It can waive cancellation fees. If the customer decides that even with cheaper insurance and/or a payment holiday, that they want to cancel the policy, most firms are not charging cancellation fees if someone's struggling. Plus, the FCA advises that if the customer wants to take out the insurance again at a later date, they shouldn't be penalised for having cancelled.

Cover can be adjusted on a short-term or long-term basis. If cover is adjusted short term, providers are required to reassess the cover when the temporary period ends, to ensure customers aren't underinsured.

If the insurance can't be made cheaper or reducing the premium doesn't help with your ability to pay, your insurer should look at offering:

  • One to three-month payment holidays. If you're still struggling to pay monthly premiums because your finances have been affected by coronavirus, the insurer should look at offering a payment holiday. However, insurers don't have to do this, for example, if you're close to renewal – though they should then offer other help and 'forbearance'.

    However, if you take a payment holiday, most insurers have told us interest will still accrue during it, so only get one if you really need to. 

    Important: Unlike most other borrowing products, if you're already on an insurance premium payment holiday, you WON'T be able to extend that holiday beyond three months. Instead, the FCA proposes that if an insurance customer is unable to resume payments, the insurer/lender should offer help in a different way. This could be to accept token payments, agree a repayment plan or reduce or waive interest while the customer repays.

You can apply for help under these measures at any time up until 31 October 2020.

New. FCA proposes 'tailored support' once payment holidays end

The FCA has proposed that insurers and 'premium credit lenders' – which work with insurers to provide loans for people to pay insurance monthly – should consider offering a range of support options to their customers. These could include waiving or reducing payments, and are designed for customers who are still struggling to pay their premiums once coronavirus-related payment holidays end, as well as those who first experience financial issues related to coronavirus after 31 October.

While the payment holidays above are a 'one-size-fits-all' solution, the help available after 31 October under the proposals would be tailored to your particular circumstances. 

The FCA says it expects most people will be able to resume normal payments. But for those who can't, help available might include:

  • Reviewing your policy. This is the first port of call, and insurers would look at whether you can drop extras you may not be using, such as key cover on car insurance. Insurers could also look at whether a cheaper policy with lower cover levels may be suitable. 
  • A (further) payment deferral. This is likely to be a short-term measure only, and may be offered if your circumstances are still changing, and you're not able to commit to a longer-term measure such as setting up a repayment plan.
  • A (further) period of reduced payments. If you can pay something but can't make the full contractual repayment, your insurer or premium credit lender may agree to you making reduced payments. Again, this is likely to be short-term only.
  • Waiving or reducing interest. If you can't meet your payments, the insurer or lender needs to make sure the amount you owe isn't rising out of control, so it may need to cut or waive the interest it's charging you. 
  • Agreeing a repayment plan. This is where your insurer or lender works with you to set up a plan that doesn't meet contractual repayments, but allows you to pay off the debt in a reasonable amount of time. 

However, unlike current payment holidays, which aren't recorded on your credit report, the FCA's proposals say insurers and lenders SHOULD report any further forbearance (such as extra payment deferrals) after 31 October to credit reference agencies. Lenders will need to let you know if the support they're offering you would have an impact on your credit report. 

The FCA is consulting on these proposals, which, if rubber-stamped (as we expect them to be), should be in place by the start of November. 

Working from home? You only need to tell your home/contents insurer if you've brought stock home or have business visitors

The Association of British Insurers has said there's no need to change or update your cover if you're now working from home and, crucially, you don't need to call and tell your insurer.  

This applies if you're doing clerical work – generally defined as working on a computer and making phone calls.

However, it won't cover any claims arising from visitors to your home who are there as part of your work. It also won't cover any stock you might have brought home – for example, if you've a mail order business that you're now operating from home. If that's the case, call and tell your insurer as you may need to pay a premium to have the stock covered, or you may need to get an extension to your usual business insurance. 

For more information on the help available for home insurance customers, plus general cost-cutting tips, see our Cheap Home Insurance guide. 

Life insurance and income protection insurance should cover coronavirus – critical illness policies won't

Whether or not you're protected for claims relating to coronavirus depends on what kind of insurance you have:

  • Life insurance and income protection insurance SHOULD cover coronavirus. If you have a life insurance or income protection policy in place you should be covered for any claims relating to coronavirus. This is because these policies are usually based on declaring any existing conditions – but if you have an existing policy, you couldn't have declared coronavirus as a condition before now so that won't be an issue.

    It is still possible to take out a new policy to protect yourself. If you are looking at doing so – either life insurance or income protection – it is likely you'll be asked additional questions, such as whether you've already tested positive for Covid-19, have had symptoms or have been told to self-isolate. If you have, an exclusion may be applied.

  • Critical illness cover WON'T apply to coronavirus. If you have critical illness cover, you will not be covered for Covid-19 claims, as it isn't considered a critical illness. If, however, you developed a serious illness/condition as a result of coronavirus, that could be considered as a possible claim.

  • Getting accident, sickness and unemployment cover is now tricky. For those seeking accident and sickness cover, it is still possible to get it but many insurers are no longer offering unemployment cover as an option, or no longer accepting new applications, or imposing additional exclusions (ie, claims may not be made unless you have been unemployed for at least a couple of months from the start date of your policy).

For full help on the ins and outs of this kind of cover, see our Life Insurance guide.

Driving a lot less? You may be able to save on vehicle insurance

Being in full lockdown meant that many were using their vehicles much less, if at all. But even though restrictions are now a little looser for many of us (though in some areas, tighter rules have been brought back in), some may still not be driving as much as usual. If that's you, there are two main ways you could possibly save, and which you look at will depend on how much you're using your vehicle.

  • Not using your car at all? Declare it 'off-road' to save on tax and insurance. As you now need insurance when you own a car, it's something you're paying for that you may not be using.

    But there's an exception to needing to pay. If it's kept on private land (eg, garage/drive) you can declare it off-road via a Sorn (statutory off-road notification), which cancels your vehicle tax (and may net you a refund). You can then cancel your insurance, though do note your car won't be covered for damage, fire or theft.

    This may be too much effort for a small saving, but you may decide it's worth it if you're not going to use your car long-term.

    For more information, see how to Sorn.

  • Still using your car, but much less? See if you can change your policy to save. Insurance is about risk, so the more chance they think you have of claiming, the more they charge. There are three changes that may save you money:

    a) Substantially reducing estimated annual mileage
    b) Telling your provider you're no longer driving for work or commuting
    c) Removing young or risky extra drivers

    As insurance pricing is personal, you may not save from these, especially if your insurer charges an admin fee to change your details mid-policy. We've more information in Should I reduce my car insurance cover?

Tell your insurer of major changes to your circumstances 

If major things change, such as losing your job (no need if you're furloughed), or if you have new convictions or medical issues, you should notify your car insurer. See What must I tell my insurer mid-term?

Can I get a rebate on my private medical insurance premiums?

The private medical sector spent some months supporting the NHS in its response to the coronavirus pandemic – for example by providing hospitals, staff, beds and equipment.

This meant there was less capacity for private treatment, with some planned procedures delayed. Some private medical insurers, including AvivaAxa, Bupa, The ExeterSaga and WPA, have already said they'll pass any extra financial benefit they got from that period to customers, with some already having paid rebates, and some still to do so.

For more on private medical insurance, including how to find a cheap policy and what to look out for, see our Private Medical Insurance guide.

  • As the pandemic is a public health emergency, care for Covid-19 is being led by the NHS – so if you require hospital treatment for coronavirus, you'll be under NHS care, even if you're technically at a private hospital.

    As a result, major providers have announced they will pay what are known as NHS cash benefits to patients with private medical insurance who receive NHS treatment, including for Covid-19. And in some cases, usual cash NHS benefits are being increased due to the current situation.

    Here's what different providers are doing:  

    Provider NHS cash benefit payment
    Aviva Paid in line with existing policy terms, including for Covid-19
    Axa Increased by £100/night for any NHS inpatient treatment (or NHS cancer radiotherapy or chemotherapy that would have been covered by the policy) until 1 April 2021
    Bupa Paid in line with existing policy terms, including for Covid-19
    The Exeter Up to £500/night for customers treated without charge for any eligible condition, including Covid-19, until at least 1 July 2020
    Saga Increased by £100/night from 1 April 2020 for hospital stays that otherwise would have been covered by insurance, including for Covid-19

Help for students, incl tuition fees, plus applying for next year's finance

The Student Loans Company has confirmed that students got their maintenance loans or grants for the summer term as normal, even if they were living at home. But many have asked us about tuition fees for the 2020/21 academic year.

The Government says you WON'T get a refund on tuition fees if teaching's now mostly online

We've been swamped with angry questions about this, such as: "Am I due a refund on my £9,000 tuition fees if my course is now mostly online?" Martin's recorded a quick video to help explain the situation (and why a reduction in fees wouldn't reduce what most students end up repaying anyway).

Officials across the UK have said students who normally pay tuition fees will continue to pay full fees in the 2020/21 academic year – whether or not universities are back to face-to-face teaching by the time term starts.

In Scotland, Scottish students don't pay tuition fees, and this will continue to be the case. But the Scottish Government has confirmed that students from other UK nations will have to pay full tuition fees in the 2020/21 academic year.

The Universities Minister in England has said as long as online courses offer "quality" and are "fit for purpose", you won't be able to get a refund. This stance is potentially challengeable in court, as many students argue they're not getting the course they signed up for if it's taught online rather than face-to-face – though it's not been tested in law.

However, if you're unhappy with what's being offered, you should speak to your university about your concerns and see what it offers – certainly before going down any legal route.

For more information, including whether you can get a refund on your student accommodation, see our Student Checklist.

What if I don't think my tuition has been worth the money?

If you feel that the teaching hasn't been up to scratch, you can complain in the normal ways. This will mean a complaint first to your university using its internal procedure.

If that doesn't help, you can escalate your complaint to the Office of the Independent Adjudicator, which acts as an ombudsman for university students in England and Wales (also see its coronavirus help). 

If in Scotland, you can address your complaints to the Scottish Public Services Ombudsman and in Northern Ireland, it's the Northern Ireland Public Services Ombudsman

What if my (or my parents') income has dropped – does this affect how much student loan I can get?

When you apply to university, you get a standard loan that covers your tuition costs, but the loan you get to cover your general living costs – called the maintenance loan – varies, depending on household income and which country's finance system you're applying to...

- In England: The more the income, the less the loan received. This suggests parents should fill the gap – see our Parental Contribution Calculator.
- In Wales:
Everyone gets the same amount, but the higher your income, the more of it is a repayable loan rather than non-repayable grant. 
- In Scotland & Northern Ireland: It's a mix of grant, loan and implied parental contribution. Higher income means less grant and more of the other two.

Typically, when you apply (whichever country you're in) you'll be asked to provide information about your income in the previous tax year. Yet if your income this tax year will be at least 15% less – perhaps due to coronavirus – you can give your income details for the current tax year instead.

This is known as a 'current year income assessment' and could result in a bigger maintenance payout. It's not been introduced due to coronavirus, but it's likely to be relevant to a larger group of people, due to the economic effects of the virus.

You'll need to make the finance application as normal (more info on how to do this), then you'll need to fill in the current year income assessment form separately as well.

The deadline for returning students from England and Wales to apply for student finance for the 2020/21 academic year has now passed. It was 30 June, and had been extended due to coronavirus. You can still apply for funding after this date, though any late applicants run the risk of not receiving the full maintenance loan for the start of the new term. The Student Loans Company advises getting the application in ASAP.

Warning – watch out for coronavirus scams

scams signpost

Lowlife scammers are taking advantage of coronavirus to try to defraud people, especially the elderly and vulnerable.

Action Fraud has already identified thousands of reports of fraud relating to coronavirus since February, with victims' losses totalling more than £5 million. Many of these are online shopping scams where victims have tried to buy products such as protective face masks and hand sanitiser from fraudsters. There have also been over 4,400 reports of coronavirus-themed phishing emails designed to trick people into opening malicious attachments or revealing sensitive information.

A common tactic used by scammers is to send messages purporting to be from research groups linked with the Centres for Disease Control and Prevention in the US, or the World Health Organisation. Some claim to be able to provide a list of people infected with Covid-19, which links to a malicious website or asks the victim to make a payment in Bitcoin.

Other common phishing emails include those pretending to be from the Government, sending articles about the coronavirus outbreak with links to fake company websites, or sending details of investment schemes which encourage people to take advantage of the coronavirus downturn.

Received a suspicious email? The National Cyber Security Centre (part of GCHQ) has launched its new Suspicious Email Reporting Service to take phishing scams down – all you have to do is forward suspect emails to its report@phishing.gov.uk email address.

Pension holders targeted in spate of scams

One very common scam during the coronavirus crisis has targeted pension holders, saying they can access cash quickly if they transfer their pension. And with many desperate for cash, this scam often finds a target – and victims lose an average of £82,000 through pension scams. Here's what to look out for

  • An out-of-the-blue offer of a free pension review. If someone calls you and says they're from your pension company, or are from a financial adviser offering you a free pension review, NEVER continue with the call.
  • Someone saying they're calling from your pension company. If they say they're from your pension company, say you will call them back, and then look up the company's contact details online or on your policy documents. NEVER call a number they've given to you. If it's a legitimate call, the caller won't mind.
  • If you're under 55 and someone calls with an offer to access your pension, don't continue. You can't access your pension before you're 55 unless you're terminally ill. Anyone offering this isn't legitimate.
  • Someone offering to manage your pension. Similarly, if someone asks you to transfer your pension to their company or put it under their management, do your homework on the company before taking any action. You can check if pension companies or advisers are registered on the FCA Financial Services Register, a public record that shows details of regulated firms, individuals and other bodies. 

Tips to protect yourself against scams

Action Fraud says you can do the following to minimise your chances of being tricked:

  • Be vigilant for scam messages. This includes not clicking on any links or attachments if you receive a suspicious message, and not responding to any unsolicited messages or calls that ask for personal or financial details.
  • Take care when shopping online. You should always do your research if buying from a company or person you don't know and trust, and possibly ask a friend or family member for advice first. If you do go ahead with an online purchase, you should use a credit card if possible for extra protection (see our Section 75 guide).
  • Protect your devices from threats. This includes always installing the latest software and app updates to protect your devices from new threats.

Also see MSE Katie's 20+ coronavirus scams to watch out for blog for more of the known coronavirus-related scams out there and tips to protect yourself from fraudsters.

Have you been scammed?

If you've lost money to fraudsters, you should do the following:

  1. Immediately end all communication with them.
  2. Contact your bank to tell them you've been scammed, and cancel any recurring payments.
  3. Report the scam to the police through the Action Fraud website. You can also call it on 0300 123 2040, but be aware it has a reduced phone service at the moment, so waiting times may be longer than usual.
  4. If you want one-on-one help, you can contact Citizens Advice Scams Action by phone or online chat.