Archive: MoneySavingExpert's Money Tips Email

Martin's coronavirus update

16 NEW need-to-knows, incl: 
New support for self-employed & ltd co directors? | LISA changes | Student loan repayment cut | Faster self-employment income support | Insurance payment hols | Tui help | NHS staff freebies & more...

Finally this week there's a bit of hope for some who've fallen into the cracks between support schemes. While far from ideal, it's a way to use the new Bounce Back Loan Scheme to support yourself, and as James tweeted me yesterday after we published our guide: "@MartinSLewis Thanks for all your help with this Martin, I feel like I can breathe a little for the first time in 6 weeks."

And that's one of the reasons why, when last week I said it'd possibly be the last time we led the email on coronavirus news, I spoke too soon. I've still got 16 new things I need to tell you. As ever, for the full picture see our 7 constantly-updated guides...

And finally, as I say each week, while we strive for 100% accuracy, please give us just a touch of wriggle room as things are changing all the time.

1) New. Govt small biz bounce back loans usable to SUPPORT YOUR INCOME, incl for those with no other support (eg, new self-employed, ltd co directors). Since Mon, the new 100% state-backed bounce back loans, for up to £50,000, have been available. They're interest and payment-free in the first year - so pay it off then and it's no cost, and at a very low 2.5% annual interest after that.

Normally we don't cover business finance, but I wanted to here, as I'd had an inkling you could effectively turn this into a state support scheme for those who've missed out on the official ones, ie, newly self-employed, self-employed with £50k+ profits, ltd co directors (to an extent) and more.

We've now had it officially CONFIRMED there's nowt in the loan rules stopping you using these loans to support your income (though there can be tax/regulation issues depending on your firm's structure). Of course it's far from ideal - these are loans, not grants - but it's an option. So I've worked with MSE Kit, Steve, Jo and Callum to rapidly put together our new Bounce Back Loans guide, incl...

- How bounce back loans work & what they cost.
- Bank-by-bank rundown of what's on offer.
- How to use them to support your income.
- Detailed Q&A with the Treasury.

2) The Competition & Markets Authority (CMA) says firms must offer cash refunds for cancellations - you can REPORT FIRMS that don't. Regulator the CMA says it's been swamped (as have we) with complaints from consumers who are being rejected for refunds after coronavirus cancellations, and it says regardless of the contract, you are usually due a full refund if:

- No goods or service was provided.
- The firm can't provide the service due to lockdown.
- You can't use the service due to lockdown.

It's investigating all sectors, but will start with 1) weddings and private events, 2) holiday accommodation and 3) nurseries/childcare providers. It'll first talk to firms that fall foul, and then look at enforcement action (ie, take 'em to court) if they still don't comply. You can report firms directly for it to look at. See how to report firms and watch me interview a CMA boss where we talk through exactly what your rights are.

3) The Lifetime ISA (LISA) withdrawal penalty has effectively been REMOVED for a year. All first-time buyers aged 18-39 should consider saving in a top LISA, as the state adds an unbeatable 25% on top towards your first qualifying home. So put the maximum £4,000/yr in, and that's £1,000/yr added for free.

Yet withdraw money for any reason other than buying a qualifying home or once you're 60+, and you effectively pay a 6.25% penalty. To help people access funds during coronavirus, that's now been removed until 5 Apr 21, backdated to 6 Mar 20 (ie, if you've done it since then you get the money back). Here's how the penalty works...

The standard LISA withdrawal fee is 25%. So put £1,000 in, you get the 25% bonus = £1,250. Withdraw it and 25% was taken off = £937.50, ie, a 6.25% loss.

Now the withdrawal charge is just 20%. So put £1,000 in and you've £1,250. Withdraw it and 20% is taken off = the £1,000 you put in.

Those who've got an existing Help to Buy ISA, the LISA's predecessor, never paid a penalty anyway, so there's no change there.

PS: I've never thought the penalty was a good idea, it's too much of a barrier - we will be lobbying against its reintroduction.

4) Student loan repayments cut (as the threshold's increased). I've had many questions about what happens to student loan repayments when income's reduced. While nothing has structurally changed, the way all (post-1998) student loans work means you repay less if your income drops and this has just been give a boost by the annual April increase to the threshold. Exactly how it works, depends on which student loan plan you're on...

- Plan 2: (All Eng & Wal who started uni in or after 2012). You now start repaying above annual earnings of £26,575 (was £25,725). More detail in Overpay Plan 2 loans?

- Plan 1: (All Scot & NI starters since 1998 and Eng & Wal starters 1998-2012). You now start repaying above annual earnings of £19,390 (was £18,935). More in Overpay Plan 1 loans?

University leavers repay 9% of income above these thresholds, so the increase means if your salary hasn't gone up, you pay less, eg, for someone on £30,000, you now repay £76/yr less on a Plan 2 loan, £41/yr less on Plan 1.

Now the numbers for someone who's been furloughed, taking the example of someone earning £30,000 on a Plan 2 loan. In Feb they were repaying £32/mth, now the furlough pay cut takes them under the new threshold, so they pay nothing.

PS: Also see pre-1998 uni starters student loan help.

5) INSURANCE payment holidays - car, home, travel, boiler, life, private medical & more - available on request from next week. Regulator the Financial Conduct Authority has announced proposals, likely to be rubber stamped this week and in place by next Wed (13 May), that mean people can get the following:

- Payment holidays for 1-3mths on request. This is for those paying monthly insurance and struggling due to coronavirus. As most monthly insurance payments are actually loans, interest still racks up, so only do this if really needed.
- Waiving cancellation fees for those ending policies.
- Reassessing policies on request to ensure they're suitable. For example, if your car mileage has dropped substantially - and they shouldn't charge fees if you do change.
- Remove 'unnecessary' extras on request. For example, if you want to drop your 'key cover' as you're not driving, it should be allowed free of charge.

Remember these come in next week, so if you've tried already and been rejected, you can retry then to get the outcomes above.

6) Self-employment income support payouts COMING FASTER. The Self-Employment Income Support Scheme will pay out 80% of profits, up to £2,500 a month, to those who are eligible. We had been told contact would come mid-May, and payouts June. Yet that's been accelerated.

- Contact from HMRC to start this week by letter, text and email (do be careful if you get one, to check it isn't spam).
- Applications open Wed 13 May.
- Payments to reach accounts 6 working days from application, so the first payment will be on 21 May. The payment is currently planned to cover Mar, Apr and May, so three months' payout.

Want to know your application appointment date now? You don't need to do this, but HMRC has an online eligibility tool for the scheme - if you go through that, afterwards you'll be randomly allocated a date from 13-18 May.

PS. If you are expecting to be eligible and the tool says you're not, please let us know and explain your situation, so we can work on how to help everyone in a similar position.

7) New MSE Coronavirus 112 Frequently Asked Questions. The MSE team's gone above and beyond to provide all the key info needed to help you through coronavirus finances. Our main guides are rammed with info, but we know (I certainly do via social media) that 100,000s of you just want quick answers to quick questions. To help, this week we're launching our full Coronavirus 112 FAQs guide, as an alternative easy route to help you find answers.

8) NHS staff freebies & discounts, incl tax help for returning retired NHS staff. We all want to clap our heroic NHS workers (I first wrote "want to give them the clap" - glad I realised) and many firms want to reward those risking their lives to protect the rest of us - from supermarket discounts to free parking, free mobile data and more. So we've happily compiled them, including an accountancy firm that'll now help NHS returnees with their tax codes so they don't overpay. See NHS staff freebies and discounts.

9) Tui has now cancelled 900,000 holidays up until mid-June - how to get a full refund. The package holiday giant's now cancelled all trips due to depart up until Thu 11 Jun (plus some cruises further ahead). The rules here are plain: when package holidays are cancelled, you're due a refund within 2 weeks. Yet like many others, Tui's making you jump through hoops to get one - however, our Tui refund tips will help you leap, and done right, people are getting their cash back.

10) Ryanair, British Airways, Hoseasons, Sykes help. Just a reminder that we already have specific tips and help for a variety of firms including Ryanair, British Airways, Hoseasons and Sykes, as well as general help that applies to all firms in our Coronavirus Travel Rights guide.

11) Payment holiday deadline dates. If your finances are degrading and you're debating whether to take a payment holiday, don't panic. There's still time available, so you don't need to do it now, you can wait and see if you really need it. Here are the last application times for key schemes and links to more info...

- Until at least 20 Jun: Mortgage payment holidays
- Until 9 Jul: Credit & store cards, personal loans & catalogue debt
- Until 27 Jul: Car finance (PCP, lease, HP), pawnbroking, buy-now-pay-later & rent-to-own, payday loans (interest & payment hols)
- Until 13 Aug (TBC): Insurance, eg, car, home, loan payments
- Until 20 Oct: Individual voluntary arrangements

Also remember you can request an up-to-£500 0% overdraft too.

12) Students in Eng will still be charged tuition fees as normal for 2020/21 - even if unis haven't reopened. Ministers have said this week that students in England starting or continuing uni from September will have to pay full fees (no confirmation from Wales & NI yet), whether or not the uni has reopened for face-to-face teaching or is still teaching online by then.

Of course, as always, if you believe teaching is substandard you have a right to complain, but not simply because it's not in person. See tuition fees 2020/21. Plus if you're new to student finance, watch my Student Loans Decoded programme, which takes you through it step by step.

Also see our student accommodation coronavirus help.

13) Has your travel firm been a cancellation refund angel or devil? Please take our 3min survey. We've launched a firm-by-firm survey asking about travel and holiday accommodation cancellation and refunds. As with our earlier 'all sectors' survey, we'll use this to flag up problem areas to regulators, the CMA and Govt; as well as to help focus our work. Please take our 3min travel refunds survey.

14) Free online courses to boost skills during lockdown. The Govt's launched a Skills Toolkit including courses on numeracy, coding, digital marketing, literacy and social media skills - all useful in many jobs. These are available to all, whether in work, out of work or furloughed (training is allowed during furlough).

15) Universal credit system unclogging - if you've not applied, now's the time. The UC system had been creaking, peaking at 148,000 applications in a day, well over 10x normal demand. The most recent figures, for a week ago, are that it was down to 32,000, which should mean things are running more smoothly and quickly. So if you're struggling due to lower income, it's worth checking - our Coronavirus Universal Credit Help will take you through it.

And remember you can be eligible for UC even if you're getting other help, such as furloughing or self-employed income support. These will just be counted as income when they work out how much you may get.

16) Umbrella companies, dental nurses & more. We've lots of irons in the fire at the moment. Some things I'd hoped to include this week we're twiddling our thumbs waiting for replies on. I'm still pushing hard to get official public clarification on supply teachers who work via umbrella firms guidance, we've got calls in over the dental nurse situation and more. Updates here next week, or follow me and/or MSE on social media, and via MSE News.

In this week's must-watch Thursday financial briefing (if I say so myself), I'll talk you through many of the key tips above, and more, plus new deals, and MoneySaving tips too. Of course as we're live I can answer your questions as well, just tweet me @MartinSLewis using the show's hashtag #MartinLewis. Do tune in or press record on your VCR.