At the beginning of coronavirus I wrote about dealing with your budget and any fears you may be having around money and how to tackle them here Fear or Focus
3 months on and the effect of coronavirus and redundancy is staggering with thousands of people now currently out of work or facing redundancy shortly i have put together an action plan and direct links to help you with benefits and support.
Reducing non negotiable fixed costs
Start by knowing your numbers and priorities and the absolute minimum you can survive on and have to pay out. Top priority would be housing ( mortgage or rent) and the associated costs , council tax, gas and electric, water and food. Other creditors – loans or credit cards.
As harsh it may seem this is not the time to worry about Sky, Netflix and other luxuries, not having them may make life uncomfortable for a while but nothing is more uncomfortable than losing a home. After you have worked your numbers you may be able to see what luxuries can be kept.
The allowed payment break from your mortgage has been extended and you have until 31st October to apply, if you have already taken 3 months you may be able to take a further 3 months. After which the FCA has issued guidance to lenders on how they can best help you, this may be in the form of extending your mortgage term or switching to interest only. Lenders are obligated to explain the impact of these options, you can read the whole FCA guidance here.
These are interim emergency plans and you must view them as such, capital will still need to be paid back and interest will accrue affecting your long term future , so when you are back in work do not assume you have additional money, put plans in place to get your mortgage back on track as soon as possible.
Loans and Credit Cards and overdrafts have come under the same guidance , Which have a great table on what different lenders are doing to help here
Council Tax – As each borough is different I am unable to provide a link, however google council tax covid19 and it should direct you to your local borough, you could be eligible for a council tax reduction and the there is also a hardship fund available.
Gas and Electric – while each supplier differs the government any energy customer in financial distress will also be supported by their supplier, which could include debt repayments and bill payments being reassessed, reduced or paused where necessary, while disconnection of credit meters will be completely suspended. Talk to your supplier – they can’t help if they don’t know.
Food – This is an area where most people can make savings if they haven’t already, if you have not budgeted before it may be alien to you to get a food budget down but it can be done, there is a great guide on MoneySavingExpert on how to save at the supermarket.
Once you know the bare minimum you need to cover you, you can start to look at where its coming from.
Analyse Guaranteed Income and Cashflow
Redundancy Pay – you are legally entitled to redundancy pay if you have worked for an employer for over 2 years , this includes any furlough time. If your employer is still trading you can calculate your redundancy pay here
If your employer has become insolvent as this is more complex there is more guidance on how to claim on the Gov website.
Savings – If you have savings work out how long they will cover your basic costs as determined above. Even though spending your hard earned savings on redundancy was not what you originally planned it for knowing what you have and how long it will last will bring clarity and reduce stress
What benefits are you entitled to?
You may be entitled to Job Seekers Allowance (JSA) which is capped at £58.90 a week if 24 or under or £74.35 a week if 25 or over
You could also be eligible for Universal Credit however this will be affected if you have savings
As all circumstances are different calculators are the best way to determine your own benefit entitlement , there is a great benefits calculator on Entitledto which is straightforward to navigate and will able to advise what you are likely to get.
Once you can predict what will be coming in and know the bare minimum of what you need to survive, you will have a better idea of your situation. This means you can plan ahead and identify any further help you may need, I have included some further links at the bottom of the page.
If you are facing redundancy its likely your industry is largely affected and therefore finding a similar job, although not impossible, may be slim. Be open to change, what skills do you have that you could bring to another job, is learning a new skill possible? No one likes change and especially those thrust on us with little warning such as Covid-19, so it can be daunting but be willing to apply for jobs you may not have considered before.
Update your CV
Sign up with local agencies as well as online with companies such as Indeed and Monster
Update your profile on Linkedin and reconnect with people in your industry, you don’t know who is looking. Be active and engage.
Volunteer in a sector that interests you, although this is unpaid it will help with mental health whilst looking for work and could lead to opportunities.
Know where you can get support
I hope this guidance has helped point you in the right direction but if you need more help or more personal assistance the following charities can help:
Or for a one to one money makeover and future planning you can contact me at https://redsquirrelfinancial.co.uk/appointment/ or join me on https://www.facebook.com/redsquirrelfinancialcoaching for more money tips.