Jürg Widmer on the raft of financial measures for individuals announced by the Government to help during the coronavirus pandemic, including wages, freelance support and travel advice.
COVID-19 will impact our personal finances for a long time to come. Employment levels are falling and as more people face lower or non-existent incomes, worry is building.
The UK Government has already announced a raft of financial measures to combat the economic effect of coronavirus. And while support packages are still rolling out, the speed at which the Government is having to make decisions is inevitably leading to confusion.
Financial measures for individuals during coronavirus
The Financial Conduct Authority (FCA) has requested that credit providers, insurance companies and banks are supportive to anyone suffering financial hardship due to the virus. It’s also worth noting that travel advice has also been extended. No-one should travel anywhere around the world unless it’s absolutely essential. This official advice applies indefinitely.
Here’s a rundown of some of the financial measures aimed at supporting individuals during the pandemic:
- Furloughed staff wages – employers that have staff not considered essential should not be requesting that they work. Instead they should place their employees on furlough and apply to the Government for assistance. They can apply for a grant that will cover 80% of each individual employee’s wages up to a maximum monthly amount of £2,500. National Insurance and tax will continue to be deducted, and while employers can top up these payments they don’t have to.
- Self-employed wages – self-employed individuals can apply for a grant (taxable) equivalent to 80% of trading profits. This is capped at a maximum of £2,500 per month for the next three months. To be eligible for this, self-employed profits can’t be over £50,000. Other conditions do apply, and this could be extended.
- Tax payments – arrangements have been introduced for people who owe tax can potentially avoid penalties due to missing payments. These include possible options of paying by instalments, deferring payment or making arrangements for late payments.
- Mortgage payments – anyone struggling to pay their regular mortgage payments as a direct result of the pandemic could be eligible a three-month break. This follows an official agreement between the Government and banks that borrowers must be shown ‘forbearance’. In other words, that they should be given some leeway by lenders. Any mortgage holidays must be agreed in advance with the lender.
- Eviction of renters – the state is introducing legislation to stop tenants from being evicted by landlords should they be unable to pay their rent because of the crisis.
- Credit cards and loans – the FCA has asked for banks and credit companies to freeze repayments for customers suffering from financial problems di e to the virus. It’s also asking that there is no interest on the first £500 on agreed overdrafts.
- Home and car insurance – the FCA has informed insurance companies they must review any changed circumstances when considering claims for home or car insurance.
Travel insurance changes and information
Travel insurance to cover risks caused by COVID-19 and its global impact is not available to buy. However, it might be possible to buy insurance for future travel that covers general risks such as theft, loss of luggage and anything unrelated to the virus.
However, as mentioned earlier, the Government is advising against any travel out of the UK except for essential purposes. This advice applies indefinitely, and holidays are not officially deemed an essential reason to leave the country.
If you have existing insurance for a holiday you’re no longer taking, the Government’s advice is to contact the insurer. Major providers of travel insurance have confirmed they will extend any existing policies to cover any emergency healthcare needed for UK citizens stranded overseas. The normal limit of 30 days beyond the originally agreed return date has been extended to 60, as long as the individual is making every possible effort to get back to the UK.
For individuals who decide that their need to travel abroad is essential, the advice is to check the restrictions in place both at their destination. The Government also warns that there is likely to be difficulties, delays and disruption on the return journey. Anyone who is a UK resident and currently abroad should come home using their original tickets if possible. The Government is arranging a number of charter flights to replace commercial flights no longer operating.