How to get through the tough times....
One of the big challenges that people are facing during the virus outbreak is how you manage financially if your income drops as well as the emotional impact that not working or contributing or being creative can have on you.
This is particularly the case for those who don’t work for a specific employer but are self employed or who work for someone on a ‘Zero Hours Contract’. So, you could be a delivery driver or courier for someone like Amazon, or Just Eat, you could be someone on a Zero Hours Contract working for Costa Coffee or McDonalds or be one of the various gardeners in the parish working for yourself. It is estimated that in Princes Risborough alone there are around 1,000 people who are self-employed.
Having been self-employed (as an HR Consultant) one of the downsides of working for yourself is that if you are sick (or self-isolating), there is no one to pay you sick pay, there is no one to make employer pension contributions on your behalf to help you save for your retirement and no one there looking to find alternative job roles for you….
However there are some ‘hacks’ or tools you can use that can help get through the difficult times we are currently living through, so that when we come out of the other end (and we will!), you are best able to take up your self employed or other role as normal:
- The Government have in recent days introduced some specific financial support for the self-employed through the ‘Self-employment Income Support Scheme’ , which will allow you to receive a taxable grant (you will not need to pay it back) worth 80% of our trading profits (up to a maximum of £2,500 per month for the next three months). Not all self-employed people will qualify (you must have been self-employed at least 3 years, have completed a tax return for the last 12 months and largely be reliant on your self-employed income). The good news is that HMRC will contact you in June to confirm that you are eligible and how they will pay the grant. You can find more information here. https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
- Other support includes more time to pay your tax bill and business grants and tax relief in running your business
Even if you do qualify for the new self-employment grants, they will not be paid until June, and individuals and families will be worrying about how they can make essential payments such as for their mortgage or rent or to meet credit card bills or bank overdrafts. Thankfully there is other valuable help at hand:
- You may qualify under the new Universal Credit benefit system that now applies to those who are self-employed. It normally takes 5 weeks for your application to be assessed but you can apply for an advance against that, although the system itself is under a lot of pressure at present.
- The leading banks and building societies have agreed that mortgage borrowers can ask for a three month ‘payment holiday’ in order to make ends meet. This may though increase your debt but please speak to your lender for further details or Christians Against Poverty (CAP) who do such amazing work to offer advice to people with money worries
- The Government have now ensured that no one renting either private or social accommodation will be forced out of their homes during this crisis and they have stopped any housing re-possession action currently being taken. Clearly you should still pay your rent if you can afford to, but you will not be evicted if you cannot at this time
- Most banks and financial institutions have introduced ‘cash buffers’ on bank accounts of around £300 so that if you use any overdraft up to that amount you will not be charged, and some banks have even stopped overdraft charges in total. Similar action is being taken if you fail to make a credit card payment on time.
The above support can make a real difference to your situation where you may not be working, or expect to work for some time, and can give you the breathing space to plan for your future. You will be surprised how understanding banks, building societies and lenders can be when you speak to them about your predicament.