If your income has been affected by the coronavirus measures, what can you do to help your money go further?
If you’re working from home – or having to stay at home, then your day-to-day spending may have dropped significantly. Being in lockdown means we’re not spending on things such as travel, socialising or visits to the cinema or hairdresser. And all those little purchases we might normally make during the course of the day – a coffee here, a sandwich there – won’t be happening either.
But if your hours have been reduced, your income has dropped, or you’re worried that you won’t have enough money to get by, there are steps you can take to save money.
Your mortgage
The bank base interest rate (set by the Bank of England) has fallen dramatically from 0.75 per cent in early March to just 0.1 per cent. This fall will filter through to tracker mortgage rates automatically, which will mean your monthly mortgage payments drop. With standard variable rate mortgages, the lender may not pass on the full rate cut. Fixed-rate mortgages are unchanged.
If you haven’t reviewed your mortgage deal in a while and aren’t tied in to a deal, you may be able to save by switching your mortgage to a different lender or to a cheaper mortgage with your existing lender. This particularly applies if you’re paying your lender’s standard variable mortgage rate.
However, a word of warning, you may find your choice of deals is limited, especially if you are looking to move to a different lender and have less than 60% equity in your property. That’s because lenders are withdrawing some products due to the coronavirus situation.
Your rent
Talk to your landlord as soon as you can to see if you can negotiate a temporary reduction in your rent.
Council tax
If you already get Council Tax Support you could be eligible for a further reduction in your bill under the newly created £500m Council Tax Hardship Fund.
If you’re living on your own or all the people in your household are under 18, you are entitled to a 25% discount on your council tax bill.
Speak to your council for more details of both schemes and also if you think you might struggle to pay your bill because of coronavirus. There may be other help they can offer such as a temporary payment holiday. It’s vital you speak to them rather than just miss a payment as this can have serious consequences. In Northern Ireland, where people pay rates rather than council tax, the government has said councils will delay sending out bills until June 2020.
Your car
You won’t have to pay for an MOT test for your car in the next few months. From 30 March, MOT due dates for cars, motorcycles and vans will be automatically extended by six months in England, Wales and Scotland. In Northern Ireland, MOT tests have been suspended for three months until 22 June.
If you have more than one car you could choose to register one of them as being off the road with the DVLA. This means you don’t have to pay to tax or insure it, but you can only do this if you can park the car in a garage or driveway. The RAC has information on how to do this.
If you’re struggling to pay any finance or leasing payments on your car because of coronavirus, you might be able to get a three-month payment freeze.
Food bills
Cutting back on food bills is difficult at the moment because of the lack of choice in supermarkets. This can make it harder to plan meals and shop for cheaper alternatives.
If you have a freezer, use it to help you avoid food waste by freezing what you can and only taking out what you need when you need it. Batch cooking, where you cook up large quantities and then divide it into portions for freezing, is a cost-effective way of cooking and avoids waste too.
Gym subscriptions
A lot of gyms are automatically freezing memberships which means you won’t have to pay while they’re closed. If your gym isn’t doing this, check your terms and conditions to see if you’re able to cancel or put your membership on hold.
Train ticket refunds
If you have a rail season ticket you can claim a refund for the time unused on your ticket, depending on how long you have left on it. And if you have an Advance ticket you can claim a refund free of charge. Contact your train operator for further details although be aware there may be delays in getting your refund. London-based commuters can claim season ticket refunds from Transport for London.
TV
TV licences will remain free for the over-75s until 1 August this year (free TV licences were due to be scrapped from 1 June). The BBC says it will keep this date under review.
Energy costs
Staying at home means your lights, boiler and appliances will be on more than ever, leading to higher energy bills. If you want some tips on reducing your energy use, take a look at the ideas on the government-endorsed website Simple Energy Advice.
If you’ve never switched energy supplier before or haven’t done so recently, this could be the best way of reducing your bills significantly – possibly by several hundred pounds a year. You can find out how to do this on the energy regulator Ofgem’s website. Citizens Advice has an energy comparison service to help you find a cheaper supplier.
If you’re struggling to pay your bills, talk to your energy supplier as soon as possible. The government has agreed a range of measures with energy suppliers to support people at this time including reducing or pausing debt repayments or bill payments.
Subscriptions
If you’ve got a spare 10 minutes, scan your bank statements for any unwanted or unused subscriptions you’ve got and cancel them.
Mobile phone and broadband
If your mobile phone or broadband contract has ended, you could be paying over the odds. The communications regulator Ofcom has information on how to go about switching.
Worried about paying your bills?
For many people, even after cutting back it’s going to be a struggle to make ends meet. If you’re worried about not being able to pay your bills or keep up with loan or credit card payments, talk to your provider or lender before you miss a payment to see what arrangements you can make.