09 April 2020

Help if you’re struggling to pay your bills

If your household income has fallen due to coronavirus and you or someone you know is struggling to keep up with the bills, help is available.

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Please note that this article was written on 9 April 2020 and last updated on 29 June 2020.

The help ranges from government support to help from energy suppliers, lenders and insurance policy pay outs. Here are details of where you can get help and additional income you may be entitled to.

  1. Mortgages, rent and council tax
  2. Energy bills
  3. Food
  4. Loans, credit card bills and overdrafts
  5. Insurance
  6. Benefits
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1. Mortgages, rent and council tax

If you have a mortgage and are worried you won’t be able to make your monthly repayments, contact your lender straight away. They’ll be able to tell you what your options are. For example, you may be able to temporarily reduce your repayments or you have until the end of October to ask your lender 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.

If you’re renting and having difficulty paying your rent, speak to your landlord straight away. See if you can come to some sort of arrangement such as having more time to pay or a reduction in your rent.

You may be entitled to benefits to help with housing costs if your income has reduced (see the section on benefits).

If you’re worried about being evicted there are new rules to protect you. Landlords won’t be able to start eviction proceedings until you’ve missed at least three months of rent. If you still can’t pay after this, your landlord is expected to take into account your financial circumstances and try and work out an affordable repayment plan with you before they start any proceedings.

If you live in a privately owned property, your landlord can apply for a three-month mortgage payment holiday if they have a buy-to-let mortgage and you can’t pay them. If they are able to do this, they shouldn’t put pressure on you to make your rent payments during this period.

To find out more visit the Citizens Advice website.

2. Energy bills

You may be worried about your energy bills rising as we’re spending so much more time at home. If you’re having difficulty paying your bills, speak to your energy supplier as soon as you can.

You might be able to arrange a payment plan to help spread the cost or your energy provider may agree to reduce or pause your energy bills. There are also schemes to help people who can’t afford these bills or top up their prepayment meter, and your energy provider will be able to tell you more about them.

The government has agreed emergency measures with suppliers which mean no credit meters will be disconnected during the ourbreak. And if you have a prepayment meter but cannot afford to top it up visit the Citizens Advice website for details of what to do.

You can also find out more about grants and benefits from energy suppliers on the Citizens Advice website.

And for advice on cutting your bills see the government-backed Simple Energy Advice website.

If you’re concerned about your water bill, again speak to your supplier as soon as you can. Many water companies run hardship schemes or fund charities which can help you pay your bills. Find out more on the Consumer Council for Water website.

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3. Food

If you or someone you know is struggling to pay for food you may be able to use a food bank. You usually have to get a referral voucher from an organisation in your community before you can use them. These organisations include Citizens Advice, your local council, your GP or health visitor, a support worker or a social worker. Your local food bank will tell you which referral organisations it works with.

To find a food bank in your area and who you need to get a referral voucher from, visit the Trussell Trust website.

If you don’t have access to the internet, contact one of the referral organisations mentioned above.

4. Loans, credit card bills and overdrafts

Keeping up the repayments on any loans or credit arrangements you have can be tricky if your income has fallen.

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 are given a payment freeze, it will not 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.

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. Because of the coronavirus pandemic, the financial regulator, the Financial Conduct Authority, says that banks that have changed their interest rates must make sure customers do not 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 April 14th (although they can do so earlier). Contact your provider for more details.

Motor finance companies have been told by the Financial Conduct Authority (FCA) that it expects them 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 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.

5. Insurance

If you can’t work, check if you have any insurance policies that cover your mortgage payments, loan repayments or that will replace some of your income. This could be payment protection insurance, mortgage payment protection insurance or accident, sickness and unemployment insurance. You may have taken out this insurance when you started or changed jobs, or took out a mortgage or loan.

There is often a minimum period before these policies pay out. Your policy provider will be able to tell you how you should claim and when you can expect any payments.

6. Benefits

If you can’t work because you’re sick, have to self-isolate, are self-employed, your employer has temporarily closed down, you’ve lost your job or your income has dropped significantly, there are a number of benefits you may be eligible for.

These include Statutory Sick Pay, Employment and Support Allowance, and Universal Credit if you’re ill. If you’re income has dropped substantially or you’ve lost your job you may be eligible for Universal Credit, housing benefit and help with council tax.

For people who are employed but whose employer cannot afford to pay them, the government has introduced a scheme to pay 80% percent of their wages (up to £2,500 a month). The scheme will run until the 31 October 2020.

The government is also providing help to the self-employed. To be eligible, you must earn more than half your income from self-employment, have accounts for 2018/19 and have a trading profit of less than £50,000. If you qualify you’ll get a grant for 80% of your monthly profits (up to £2,500 a month).

You can find out more about these benefits in our article on help for the self-employed. You can also use a benefit calculator such as on the Turn2us website to find out about any other benefits you might be eligible for.

More help and support for managing your finances in difficult times.

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