How will coronavirus affect your finances?
The spread of coronavirus is causing many big financial worries for people, on top of health concerns.
People’s pensions, incomes and insurance could all be affected.
For consumers who are concerned about their immediate financial situation, getting help early could be key, so it’s important to talk to your provider sooner rather than later. Free-to-use debt help charities may also be able to help. You may find there’s more help out there than you realised.
In the meantime, here is a look at how your finances could be affected by coronavirus and what help may be available…
What if I’m struggling to keep up with mortgage repayments because of coronavirus, or I need to get my hands on money that’s locked away in a savings account quickly?
Many banks and building societies have announced the extra help that they will offer to customers with coronavirus.
Several lenders have said this could include mortgage payment holidays for homeowners, or people with other types of debt for certain periods of time, while they get back on their feet.
Some savings providers will also allow people to break out of fixed-term savings accounts without facing penalties, if customers affected by coronavirus are urgently in need of cash.
The provision being put in place varies from bank to bank – so if you are worried, make sure you get in touch with them sooner rather than later to find out exactly how they can help you.
Some businesses are also holding special opening hours for elderly and vulnerable people to shop and make financial transactions.
Meanwhile, HM Revenue and Customs (HMRC) has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus – 0800 0159 559.
Would taking a payment holiday with a bank dent my credit score?
Kelli Fielding, managing director of consumer interactive at TransUnion, one of the UK’s main credit checking companies, explains: “Generally, an agreed mortgage payment holiday shouldn’t have a negative impact on a consumer’s credit score with TransUnion but they (the borrower) would need to clarify with the lender how it would be recorded on their credit file.
“It’s not uncommon for lenders to allow payment holidays at times of illness or in exceptional circumstances outside the customer’s control,” she adds.
“Consumers should check their credit file regularly to ensure the information held is accurate.”
What about my pensions and investments?
Nathan Long, a senior analyst at Hargreaves Lansdown, says savers should think about the longer term.
“It’s important to look past short-term fluctuations when saving for long-term targets like retirement, even though fresh news could see more variation in your pension value,” says Long.
“Holding your nerve is the biggest challenge facing those with at least 10 years to retirement. It can be painful seeing your pension fall in value, but it could actually be a good time to make a lump sum top up and buy in to the market at lower prices.
“Of course, the value of your pension may still fall lower in the short term, but it should be worthwhile when retirement comes around.”
But what if I’m close to retirement?
Long does say those who are closer to retirement may find themselves more vulnerable to stock market falls.
“The first step is to be brave and check how your pension is faring,” says Long. “Many pension plans actually start de-risking your investments as you approach the retirement age you’ve set, which could mean your pension has fallen less than you’ve feared.”
How about travel insurance?
On March 17, the Foreign and Commonwealth Office (FCO) advised people against all but essential travel worldwide. The advice was applied initially for a 30-day period.
Several insurers had already temporarily paused the sale of travel policies. Bear in mind that some new policies may carry exclusions related to coronavirus.
This makes it all the more important to check the small print to understand exactly what’s covered, and shop around. If you’re unclear, ask your insurer.
As the situation develops, help is available online to understand how you may be affected. The UK Government’s gov.uk website has general information (gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response).
And MoneySavingExpert.com could help you understand your rights Money Saving Expert.
Meanwhile, Citizens Advice is warning people to beware of scammers preying on those affected – so be cautious if you’re contacted by someone offering to act for you to recover your money.
See also Things You Only know When You Work At Home With your Partner
PICTURE: Getty Images/iStockphoto
