Archive: MoneySavingExpert's Money Tips Email

Martin's coronavirus update

21 NEW need-to-knows incl: Card & loan pay hols extended | Tui & Virgin refunds | Overdrafts 0% or 40%? | Self-employ help | Cheap new travel ins | Will existing travel ins work? | Bounce back survey | Renew passports ASAP

The Prime Minister has just announced that from 4 July, in England, the 2m rule will become 1m+ and hairdressers, pubs, restaurants and cinemas will be able to open... though not beauty salons, swimming pools and indoor gyms. Either way, we have to hope it's a huge signal that the virus must be on the wane.

Yet the financial contagion is far from over. In fact it's likely we're only at the beginning. So we will continue to brief you on what you need to know to stay financially safe. As always, all new info we get is added to our constantly updated guides...

While we strive for 100% accuracy, please give us just a touch of wriggle room - things are changing all the time.

1) Credit cards, personal loans & catalogue debt payment holidays due to be EXTENDED till 31 Oct. On Friday, regulator the Financial Conduct Authority (FCA) published proposals which included extending card and loan payment holidays for those struggling due to the pandemic. It's a lightning-quick consultation, almost certain to be rubber-stamped and in place by July. In brief it proposes...

- If you've not yet applied, you'll have till 31 Oct to do so.
- Already on a pay holiday? You can ask to extend it for a further 3mths.
- Partial pay holidays are allowed if you can repay some but not all of it.

My view is IF YOU NEED A PAYMENT HOLIDAY, DO IT, BUT ONLY IF NEEDED. The reason it's not a 'grab it' is two-fold.

First, because the holiday is just a deferment, you still have to pay what's missed, and the interest that's racked up, later. Plus, while it won't go on your credit file, as I revealed a month ago, payment holidays can affect credit scores as lenders use other methods to detect them.

But if you're struggling to repay, and need cash flow, do it. Better that than killing your finances. Though do check if you can get a balance transfer first to cut the interest before you stop paying. More info in credit card and loan payment holidays, which includes my video briefing.

2) Paying off a loan - cut interest & SAVE £5,000? Payment holidays don't stop interest. If you've an expensive loan, it's worth checking to see if you can do a loan switch to cut costs. I was prompted to write this after receiving David's email last week... 

"Massive thanks - due to your weekly email I saved over £5,000. I took out a 5yr loan in 2018, and have been happily repaying the instalments. Then you highlighted cheaper loans. I got one at 3.1% and now pay £40/mth less and it's due to finish 6mths earlier."

This is both a good and bad time to try. Good because rates are super-cheap, bad because loans are tougher to get. Still it's worth a check. Yet as there can be early repayment charges if you repay a loan early, it's not just about comparing APRs. Here's my mini step-by-step...

- STEP 1: Check if it's likely you can get a cheaper loan. Our Loans Eligibility Calculator shows your odds of acceptance for many cheap loans. If you've little chance, don't carry on. If cheaper loans are likely, keep checking.

For an idea of current cheapest rates: for £3k - £5k Hitachi* is 8.4% APR, for £5k - £7.5k, Tesco Bank is 3.4% APR, and for £7.5k - £15k, Cahoot* is 2.8% APR. All these are 'representative APR' though, meaning sadly only 51% of accepted customers need get the advertised rate. For borrowing under £3k, check out 0% money transfer loans.

- STEP 2: Ask your current lender for a settlement figure. Ie, how much it'll cost to clear your current loan including any early repayment costs (which tells you how big a new loan you'll need to get). 

- STEP 3: Calculate how much it'll cost you to stay with your current lender. Multiply your monthly repayments by how many months you have left (ask it if you don't know).

- STEP 4: Find out which is cheaper. Use the MSE Loan Switching Calc to see whether you should stick or not. See our Cut existing loan costs guide for more help.

3) 0% overdrafts extended BUT 40% rates may return. The FCA's proposals on Friday also included new overdraft help. In April the regulator introduced up-to-£500 interest-free overdrafts for 3mths - under the new proposals, these will be extended.

- For those struggling due to coronavirus, on request, the first £500 of authorised overdrafts can be interest-free for a further 3mths.
- If you've not yet asked for help, you'll have till 31 Oct to do so.

In fact, many banks have made these blanket arrangements, giving the £500 overdrafts to all - see overdraft bank-by-bank help. And it's likely (though not yet firmed up) that will continue.

Will the new 40% overdraft rates restart? There are still clouds on the overdraft horizon. In Feb (doesn't it seem a lifetime ago) I explained there'd been regulation changes to make banks ditch daily fees and just charge interest instead. Sadly this had resulted in almost all banks announcing new 'from April' overdraft rates at a hideous 40% EAR. That's nearly double a high street credit card, making larger overdrafts the new danger debt.

Then coronavirus hit and the regulator said firms would have to ensure no one would pay more for overdrafts than pre-April. In its latest proposal, the FCA hasn't included extending this, so banks can return to their up-to-40% interest rates - though they will need to reduce the interest for those struggling due to coronavirus. Watch this space.

4) Car finance, payday loan, buy-now-pay-later payment holiday extensions? Last Friday's FCA announcement simply said there'd be "separate guidance which will be updated soon" - I suspect that'll mean similar extensions. See car finance and payday loans for the help currently available. Updates here when we know (obvs).

5) Are you one of 1m eligible for the self-employment grant who's not claimed? You CAN even if you're working, shielding, looking after kids... The second Self-Employment Income Support Scheme (SEISS) grant is due in August, but there are still 1m+ people eligible for the first grant who haven't claimed it. There's still time to apply for SEISS.

Some, rightly, won't have done it because their businesses are fine, but I've had many messages from people worried about having to "declare their business is impacted by Covid". Actually you'll know better than anyone if your business is impacted, so if you can put your hand on your heart and say it is, there isn't an issue. To help, it could be because...

... you or a staff member's been off sick, shielding, or looking after kids.
... even though you're working - which has always been allowed with SEISS - there's less work or profit than normal, eg, a cab driver with fewer fares as there are fewer tourists.
... your premises are more difficult to access, slowing things down.
... your costs are up, for example to provide PPE for all your staff.

And this is binary - if you're impacted you're due the FULL amount, if not you're due nothing. To help, we've got a NEW What counts as 'impacted by Covid' for SEISS guide, going through HM Revenue & Customs' guidance and a whole range of practical scenarios to help, including how the two grants interact.

PS: And sadly, the 1m eligible who haven't claimed are likely dwarfed by those who aren't eligible who'd love to claim. I'll continue to voice my concerns over the excluded as I did in this Guardian profile.

6) Time to grab an August holiday bargain, eg, £41 return flights to Milan? There's so much to say on this, we've separated it out in our Book a summer holiday? note below.

7) English hotels, holiday apartments, campsites & caravan parks to reopen from 4 Jul. This has just been announced - we'll be looking at what's available for next week.

8) Travel insurance is available again - it WILL cover coronavirus illness but NOT coronavirus cancellations, and costs more. In March, when the Foreign and Commonwealth Office (FCO) warned against all non-essential travel, travel insurance came to a near standstill. Now, a few insurers are offering policies again - dirt-cheap deals have gone, so prices are higher, but still affordable.

No mainstream policies will cover travel while the FCO continues to warn against it, nor if that's lifted and your holiday's cancelled due to future UK or other countries' coronavirus travel restrictions.

However, some (not all) new policies will cover medical costs relating to coronavirus if you catch it overseas or if you or a family member get coronavirus before travelling and then can't travel.

The team have updated our travel insurance guides to include these. Nothing is perfect though, but we hope this helps...

- Cheap annual travel insurance can, at times, win if you go away 2+ times a year. Prices start from £18 for a year's Europe cover for an individual. 
- Top single-trip policies start from £7.50 for a week in Europe.
- Top over-65s' travel insurance prices start at £20 for a week in Europe.
- Top pre-existing conditions travel insurance prices start at £7.50 for a week in Europe, but vary a lot depending on your condition.

9) Existing annual travel insurance MAY cover Covid cancellations. It depends on when you got the insurance and booked the holiday...

- Had cover and holiday booked before mid-March? If both were sorted before the FCO warned against all non-essential travel, most (though not all) policies should cover you for cancellation while the FCO warning remains in place. Though your insurer will want you to try for refunds from the airline/travel firm first. The same should apply if the Govt lifts then reimposes restrictions - provided your holiday was booked before mid-March.

- Booked holiday after mid-March? If you booked after the FCO warning, you WON'T be covered for cancellation due to coronavirus travel restrictions or disruption.

- Annual travel insurance lapsing and booked a holiday before mid-March? DON'T switch firm. If your insurance is about to expire, renew your cover with the same firm ASAP if you can. Most offer a continuation of existing coronavirus cancellation cover for holidays booked before the FCO warning, so stick with it, as you can't get that cover elsewhere. See annual policy renewal help.

If the holiday was booked after mid-March, you're unlikely to be covered for cancellation, so switching isn't such an issue.

- Not got travel booked and annual policy expiring? There's little benefit in renewing immediately, as you only get the coronavirus continuity on holidays that were in place pre-March.

10) Passport at or nearing expiry? Renew ASAP. The Passport Office is warning, understandably, that renewing is taking longer than the usual 3wks. We're hearing reports that at the extreme, some are taking 3mths or more, while fast-track services and face-to-face appointments are suspended. 

So if you've a trip planned later this summer sort it quickly - Tracy emailed: "Been waiting 13wks. Now looks like our holiday will have to be cancelled, costing us £1,000s." And 'no passport' isn't covered on most travel insurance. Full info and help in Passport renewals latest.

11) Part-time furlough starts NEXT Wed. From 1 Jul your employer can bring you back to work on a part-time basis - there's no limit on the number of hours you can work, but it'll have to pay your wage for any hours you do. See full info, incl how much you'll be paid for working, in our part-time furlough work and pay help.

12) Struggling to get a Tui refund? Call mid-afternoon. A few weeks ago, Tui changed its policy and agreed it'd offer cash cancellation refunds, allowing those who'd been sent a voucher to put it in the system to request a refund. Some have struggled with that, and calling can be a nightmare. See my 2min Tui help video, clipped from my ITV show, where I explain what to do.

13) Applied for a bounce back loan? Good or bad experience, pls take 5mins to fill in our survey. Small businesses impacted by coronavirus can get £2,000 to £50,000 bounce back loans, which are interest- and payment-free for the first 12mths.

I've had wonderful and terrible feedback on this. So we'd like to know how your experience was - were you accepted, was there a delay? - via our anonymous bounce back loans survey. We'll publish the results, and feed through any negative trends and specific or systemic issues, to the appropriate regulators to try to help improve things.

14) How to get a Virgin travel refund. We've been swamped with complaints about refunds from Virgin Atlantic and Virgin Holidays. Both are giving vouchers for cancelled trips automatically, but they say refunds could be "120 days after requesting it". We've more info and help in how to try to get a Virgin Holidays / Virgin Atlantic refund.

15) Travel refunds whatever the firm. We've pulled up Tui and Virgin today, and other firms in previous weeks. Yet there are 1,000s of firms out there, and issues with many. We can't do individual guides for all, but our travel refunds section has details and general help which covers all.

16) New Eng, Scot & Wal online jobseeker site. It's likely millions of people are facing redundancy over the coming months (see Redundancy Help). For those looking for work, the Govt's launched a new Job Help site, listing over 65,000 jobs and offering tips, incl which sectors are recruiting, how best to use your transferable skills and how to secure a new role.

17) Even HMRC's webinars are confused about the second self-employment grant's timing. Last week, I explained that to claim the SEISS grant due in Aug you'll bizarrely need to declare your business was impacted by Covid on or after 14 Jul.

It's bizarre, as the first 3mth grant covered Mar-May, so you'd assume the second 3mth grant covers Jun-Aug. If so, the declaration should be those impacted after 1 Jun. Yet that isn't the rule. 

Now we've discovered even one of HMRC's own webinars 'wrongly' told confused potential claimants the second grant applied specifically to Jun, Jul and Aug. See our HMRC 'sheesh' SEISS story for full info.

18) Shielding? The Govt says you can return to work on 1 Aug in Eng - which means sick pay stops. From 1 Aug, the 2.2m clinically vulnerable people in Eng will be able to go back to work. So employees currently getting statutory sick pay due to shielding will no longer be eligible for it and the Govt's free food boxes will also end then. Full info, plus shielding advice for Scot, Wal & NI, in our shielding update.

19) Energy firms could start chasing unpaid bills again next month. Ofgem's chief executive Jonathan Brearley said suppliers "cannot extend unlimited credit to customers", so it's anticipated they'll restart debt management activities.

20) Self-employed & were on maternity / paternity in 2018/19? If you missed out, you could now be due a grant. Two key criteria for eligibility for the SEISS grant are that you need to have earnt enough to do a tax return, and that at least 50% of your total income must come from self-employment in the 2018/19 tax year.

New guidance means those who missed these criteria in that year due to being on parental leave can now disregard it and look to the prior two tax years. Full help in self-employment paternity.

The Govt may be ending its daily briefings, but the week's must-watch financial briefing is still on for another three weeks. We're live, so you set the agenda - if you've a question, tweet me @MartinSLewis importantly using the show's #MartinLewis hashtag. Plus I'll have the latest must-know news to maximise your money. Do tune in or, at worst, ask a quick-typing friend to transcribe it.