Managing your money during difficult times

5 min read


Latest update

Please note that this article was last updated on 3 June 2020.

In uncertain times like this, thinking about your financial situation can be stressful. But there are things you can do that may help.

Fears over the spread of coronavirus are causing people uncertainty and real worry in different areas of their lives, from their health and wellbeing to work and finances. If you’re feeling any stress around your financial situation or future, read our tips to find out what you can do.

Look at your budget

If you’re ill, you’ve had your working hours reduced or have had to take unpaid holiday it can be a big financial shock. In order to find out how that’s affecting your finances, you need to know what you’ve got coming in and what you spend.

As well as making sure you’re claiming what you’re entitled to – including benefits and sick pay (read on for more on this) – you may need to see if you can cut back on your outgoings. Depending on your spending and needs, that might not be easy. But it’s an important first step.

Cutting back may mean seeing if you can do without things you’d normally buy, as well as getting a better deal on regular spending, such as gas, electricity, phone and broadband. Read our guide on ‘How to cut your bills’ for more information on how to do this.

Review any debts or loans

Debts that may have been affordable a few weeks ago could now be causing you to worry if your income has dropped or might do so.

Financial companies are offering a range of measures to help customers affected by coronavirus. Banks, building societies and credit card companies are introducing a payment freeze of up to three months for customers. If you’re given a payment freeze, it won’t affect information on your credit file. Current account providers are also allowing customers who already have an arranged overdraft in place to borrow up to £500 interest free for up to three months. If you have a mortgage and are worried you won’t be able to make your monthly repayments, contact your lender straight away and they’ll be able to tell you what your options are – you may be able to temporarily reduce your repayments, or you have until the end of October to ask for a payment holiday. If you’ve already taken a payment holiday and are still having financial difficulties, you can ask your lender to consider extending it for a further three months.

Motor finance companies have been told by the Financial Conduct Authority (FCA) that it expects them to to provide a three-month payment freeze to customers who are having temporary difficulties with finance or leasing payments. And, if customers are experiencing temporary financial difficulties, firms should not take steps to end the agreement or repossess the vehicle.

Payday lenders have been told by the FCA that they will be expected to provide a one-month interest-free payment freeze to customers facing payment difficulties. And buy-now-pay-later (BNPL), rent-to-own (RTO) and pawnbroker lenders have been told to offer a three-month payment freeze to those struggling financially as a result of coronavirus.

Some banks and building societies recently changed their interest rates on overdrafts (typically to around 40%) and others were due to change theirs from the start of April. However, because of the coronavirus pandemic, the FCA says that banks that have changed their interest rates must make sure customers don’t pay more if they go overdrawn than they would have done under the original charges.

Banks, building societies and credit card companies must offer this package of measures to customers from 14 April 2020. You can contact your provider directly for more information.

If you do need to use a credit card to pay for essentials while things are a bit tight, make sure you plan how you’re going to make the repayments and be clear on what the restrictions are. And if you’re worried about debts, or struggling to repay them, debt advice charities like StepChange or National Debtline offer free support and guidance.

Check if you’re entitled to sick pay

If you’re an employee earning at least £120 a week you’re entitled to Statutory Sick Pay (SSP), which gives you £95.85 a week for up to 28 weeks (in the 2020/21 tax year). If you’re on a zero-hours contract you can also claim SSP, as long as you meet the condition above.

Usually you need to be off work for four days in a row before SSP kicks in, but if your absence is related to coronavirus it will now be paid from the first day. You could also get extra sick pay from your employer – these schemes are often more generous than SSP so it’s worth checking your contract or asking your HR department.


See if you can claim any benefits

If you’re self-employed, a contractor or a freelance worker it’s very likely that you won’t receive SSP. If you become ill, you may be able to claim Employment and Support Allowance, or if you need help with childcare or housing costs you may be entitled to Universal Credit.

If you need them, check if you’re eligible for any benefits as soon as possible and don’t put off making a claim as it can take a while to process – the benefits calculator from financial support charity Turn2us can help you to work out what you’re entitled to.

Review your insurance policies

If you can’t work, check to see if you have any insurance policies that could help with your income or mortgage payments. If you do, make a claim as soon as you can – check the terms and conditions of your policy to see if and when you might be able to claim.

Spend less, save more

You may not be able to build up savings if your income has dropped, but if you’re able to save, it’s worth building up a cash buffer for emergencies. Even saving a small amount is better than nothing.

If you’re working from home rather than commuting to work, you’ll be spending less on travel and possibly things like lunches and coffees – you could consider putting this money into a savings account instead.

It’s also worth reviewing regular subscriptions like gym memberships that you may be able to freeze or cancel if you’re not going to use them for a while – just remember to check any terms and conditions beforehand to see what your options are and when (or if) you can make changes.

Don’t panic about your investments

If you have a pension (or an investment product), try to not panic if you see the value going down. It’s important to remember that pensions are long-term investments – and it’s normal for the value of investments to go up and down.

While it might be tempting to move investments now, it could be worth taking more of a long-term view, depending on what stage of life you’re at. If you’re thinking about switching anything or taking money out of your pension, it’s a good idea to speak to an independent financial adviser to consider your options.

Watch out for scams

Fraudsters often take advantage of uncertain situations like the coronavirus outbreak to scam people out of their money. Make sure you’re clued up on the different types of scams out there, how to recognise and report them, how to protect yourself and what to do if you think you’ve been the victim of a scam. Read our guide on how to spot coronavirus scams for more information.  

Use the PayOut Now scheme to access your cash

Having enough cash to hand can be a problem if you’re unable to get to a bank. The Post Office’s PayOut Now scheme can help with this and has been extended to include several banks and building societies. Under this scheme you can contact your bank, building society or any Post Office and arrange for a barcode voucher to be texted to a trusted friend or volunteer who can then use this at any Post Office to withdraw a set amount of cash for you.

Support for your finances

The Government has drawn up a number of emergency measures to help protect our personal finances during the coronavirus crisis.


See our summary about Support for your finances

Our coronavirus statement

We’re seeing significant swings in global financial markets as a result of fears over the spread of coronavirus and the containment measures being put in place.


Read the full statement about Our coronavirus statement