Archive: MoneySavingExpert's Money Tips Email

12 helpers for hard economic times, as redundancies, pay cuts & small biz woes continue to hit

2nd self-employment grant NOW OPEN, bill busting, redundancy rights, free budget planner, childcare help etc

To few people's surprise, it was confirmed last week the UK is officially in recession for the first time since 2009. The trigger for a recession is when the economy shrinks in two successive three-month periods - and that's what happened in the first half of 2020, due to the fallout from the pandemic. It was the scale of the contraction in that period that was shocking - 22.1% - the biggest on record.

Things are improving, as the economy grew by 8.7% in June. Yet that wasn't enough to avoid a recession, and recovery to pre-Covid levels looks way off, with more job losses expected, especially when the furlough scheme ends in Oct.

Only yesterday, M&S said it would cut another 7,000 roles, while other big names such as BA, British Gas and WHSmith have said job losses are still to come. Plus many in work are earning less, and numerous self-employed workers have struggled to generate any income at all recently. 

So we've help for those already facing the harsh economic consequences of Covid, and those concerned about what the next few months may bring. And even if you feel financially fine, there are good everyday tips here to keep bills and budgets in good shape - which makes more sense than ever now. 

1) Now open. Second self-employment income support grant. Yet a huge 800k who were eligible didn't claim the first one - check NOW. It's been a tough time for many self-employed people, with many businesses severely affected. But on Monday applications opened for the second and final Self-Employment Income Support Scheme grant. 

It's capped at £2,190/mth for 3mths, making it a max £6,570 (which is taxable). Bizarrely, that doesn't cover a specific time period; you just get 3mths worth of payments.

To work out the total, you'll get 70% of your average monthly trading profits in the tax years that ended in 2017, 2018 and 2019 (assuming you worked all three) - but only up to the cap above. As it's a grant, you don't need to pay it back.

While your business needs to have been adversely affected by coronavirus since 14 Jul to claim, eligibility is otherwise the same as the first grant - eg, you must have filed a 2018/19 tax return and your avg trading profit must be less than £50,000/yr. Of course, the similar criteria mean sadly many are still excluded. 

If you're affected in any way since then, you're due the FULL grant amount based on your earnings - if not, you're due nothing. Unsure whether you're affected? Read our Can you declare your business is affected by coronavirus? guide.

2) Do a bill-busting check to get your finances ship-shape. There's never a bad time to check you're not overpaying on energy, broadband, credit cards etc. But right now, it's even more important. Our Money Makeover Checklist has it all - here are some of the biggies:

-  CREDIT CARDS. Pay interest? Save £100s by shifting debt to 0% for up to 28mths. We've the top balance transfer deals below. 

- MORTGAGES. Are you one of 1m+ on a standard rate? Can you save £1,000s switching? See our Remortgage Guide & Mortgage Best Buys.

-  COUNCIL TAX. 100,000s overpay. Yet a 10-min check could save £1,000s if you're in the wrong band or you're failing to grab discounts. 

- ENERGY. Switch & save £250+/yr. We've blagged the cheapest 1yr fix.

- MOBILES. If out of contract & happy with your phone, many can save with a new Sim. Eg, 4GB data, unltd mins & texts: '£6.57/mth'. See Cheap Sims.

- BROADBAND. Slash bills & get a speed boost. The cheapest fibre b'band & line in 3yrs is available at '£14.99/mth'. See more b'band deals.

- CAR INSURANCE. Never auto-renew. Instead use comparisons to slash prices, even if not at renewal. See our car insurance cost-cutters.

3) Furlough's due to end in Oct which could mean more job losses - tool up on your redundancy rights. Since April, 9.6m roles have been furloughed - this is where your job's put on standby and you get up to 80% of your salary, up to £2,500/mth.

It's been a lifeline for many, yet from this month employers have been asked to contribute - at first covering national insurance and pension contribution costs, then from September, parts of the salary too. That may prompt some to think seriously about who they can keep on. 

If you're worried your job may be at risk, brush up on your rights now. Our fully updated Redundancy Help guide includes your rights to pay, notice and holiday, and lots more. For full info on furlough rules, see furlough help. 

4) Do a proper budget to plan ahead - and work out if you spend more than you earn. With plenty of uncertainty, it's more important than ever to have a firm handle on your spending. Our free budget planner spreadsheet helps you analyse your finances to work out your genuine incomings and outgoings over a year (or other timeframe), which can be an eye-opener. While it requires effort to do it properly, it can transform your approach to spending and saving. 

Many tell us it's been the kick up the bum they needed to start cutting bills or cutting back. Plus our Demotivator tool shines a light on how much small spends, such as coffees, really cost over a year.

5) Looking for work? Make use of support, incl Govt jobseeker site, free training & free dry-cleaning. Here's how...

- Govt's GB jobseeker site has job tips & lists 88,000 vacancies. See Job Help.

- Claiming benefits? Free training, interview travel expenses, interview clothes etc. You could benefit from the Flexible Support Fund, with grants issued at the discretion of your local Jobcentre. 

- Some can get a free railcard giving 50% off many tickets. If you're on jobseeker's allowance or job hunting & claiming universal credit, you may qualify. See free railcard.

- Got an interview? Get your outfit dry-cleaned free. Timpson offers this perk if you're unemployed. See free dry-cleaning.

6) Beware income eaters - do a direct debit audit. Whether money is tight or not, why throw cash away? Many who check their statements for payments get a shock when they see that magazine subscription, gym membership or pay TV fee they didn't know was going out. So do a speedy direct debit audit to check you're not paying each month for things you don't use or don't need.

7) Check if you have insurance that covers job loss if you've been made redundant or are worried it could happen. You won't be able to get a new policy now that covers coronavirus-related redundancy. However, you may already have one of several types that can kick in and offer financial respite if you lose your job, including income protection cover or payment protection insurance. Do our check for hidden insurance.

8) Got a small business that's struggling? You can still apply for a bounce back loan of up to £50,000. Small businesses, including limited companies, affected by coronavirus can get £2,000-£50,000 loans. The loans are interest-free and payment-free for the first year and they CAN be used to support your income. As things stand they're available till Nov. Full info, including eligibility and how to apply, in our Bounce Back Loans guide.

9) Struggling to pay bills? Should you ask for a payment holiday? They're available for mortgages, credit cards, store cards, loans, insurance, car finance and more until 31 Oct. See What payment holidays can I take - and should I?

10) Check if you can claim help with childcare - are you due up to £2,000/yr PER CHILD? The Govt's Tax-Free Childcare scheme offers help towards childcare costs, but only a quarter of the 1.3m families eligible for the help have signed up. And if you've a 3-4-year-old, in Eng you're entitled to up to 30hrs a week of free childcare (the link has detail on Scot/Wal/NI entitlements). 

If you're not claiming either, check if you can. Plus if you already get either, remember you need to reconfirm eligibility every 3mths - important for some with schools set to go back, as Tax-Free Childcare can pay for services such as after-school clubs. See our Tax-Free Childcare guide for full help.

11) If you're on a low income, check if you can claim universal credit. The number claiming it has shot up - 2.6m more are now claiming than pre-pandemic. Universal credit is a means-tested benefit to help low earners meet basic living costs and some can get £1,500+/mth.

As eligibility criteria are complex (eg, there's no straightforward definition of 'low income') use our 10-min Benefits Calculator to see if you're likely to qualify. Also read our Coronavirus Universal Credit & Benefits guide for more info.

12) Struggling with serious debt? Get free non-profit help. Sadly, the charity StepChange has warned that 4.6m households risk building up dangerous debt because of the pandemic.

If you're in the mire, it's important to check what coronavirus-related or other financial support is available (such as those mentioned above). But if you've exhausted these avenues and are still struggling, you may be in debt crisis, especially if any of the following apply...

- You can't meet minimum monthly payments.
- You have non-mortgage debts bigger than a year's salary.
- You have sleepless nights or depression/anxiety over debt.

If so, get free, one-on-one debt-counselling help from Citizens Advice, National Debtline or StepChange. They're here to help, not judge. The most common thing we hear after is: "I finally got a good night's sleep."