Money in the time of coronaviruses: how to get financially fit for the new normal | Silver

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Money in the time of coronaviruses: how to get financially fit for the new normal | Money | The Guardian













































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The coronavirus crisis has had a huge impact on all of us. About 8.4 million workers have been put on leave, tens of thousands have lost their jobs and many self-employed workers have suffered.

Even the lives of those who are still at work may have changed dramatically. Homework has become the norm for many, and workers at some companies have already been told that this will continue until at least the fall. Meanwhile, the physical distance measures are expected to remain for several more months, and a whole series of events, from holidays to festivals to weddings, have been canceled. And behind it all, there is a virus that can be deadly.

Given all this, it is possible that your financial configuration no longer corresponds to your lifestyle and your needs. Guardian Money has developed a guide to getting everything in order as we all adapt to new ways of living our daily lives.

Reduce household costs

  • Wholesale energy prices have dropped due to the closure of factories and businesses and declining demand for fuel around the world. The cheapest double gas and electricity rates cost £ 750 per year for a medium-sized house with average consumption. Households benefiting from their supplier’s capped standard rate will generally save more than £ 300 per year by changing. Tonik Energy’s v4 green super power rate is arguably the cheapest choice and is fixed for one year. Prices have dropped so much that those with fixed offers purchased before March should also consider moving and paying exit fees. Use Energyhelpline.com to find out what your household can save.
  • Housing will likely be your biggest investment. If you have a mortgage and took a three month pay leave, you may know that on May 22 the government said people could extend this for three months (the first ones were due to end in June). Meanwhile, those in difficulty but who have not yet taken mortgage payment leave will have until October 31 to apply. However, there are also other options available for borrowers, now or at the end of the vacation. Two of the principals are temporarily switching to interest only payments and extending the term of the mortgage. Both will reduce your monthly payments but there is a price to pay. For example, increasing the term of the mortgage will ultimately pay off much more interest.
  • Most local authorities offer housing tax paid leave to those who are struggling, but you must request one, and there is no guarantee that the answer will be yes. Those with universal or low-income credit can get a reduction in their bill or, in some cases, a waiver. The amount of the reduction depends on your situation and the advice. In addition to the reduction, in England you can also get an additional £ 150 on your bill, supported by a £ 500 million Covid-19 proof fund.

Compensate for lost income

  • You may be entitled to benefits to supplement your income. Anna Stevenson, of the charity Turn2Us, explains that it is “very difficult to speak of specific sums because the demand of each household is different, depending on the rent they pay and a host of other factors, including the number of children, etc. ”. The charity has a benefit calculator on its website, which will help you determine what you can claim. Households that receive tax credits and whose annual income should be more than £ 2,500 different from the previous fiscal year should contact HM Revenue & Customs and report a change in circumstances, which should result in a change in payments. Stevenson says that some people with active tax credits, which are generally no longer available to new applicants, may be better off switching to universal credit, but they should use a calculator to check before applying.
  • Are you earning higher income with children who have experienced a drop in income due to the pandemic? If your income is less than £ 60,000, get your family allowances restarted. This is worth £ 1,820 a year for a family with two children. Under the High Income Child Charge (HICBC), if you or your partner earn more than £ 50,000 a year, the benefit is gradually reclaimed through the tax system until it is worth nothing. income over £ 60,000. Thousands of parents who chose not to receive family allowances, or who never started claiming in the first place because they had to pay the HICBC, will be able to request or restart the payments. To restart family benefits, fill out an online form or call 0300 200 3100. For more information, go to gov.uk/child-benefit-tax-charge/restart-child-benefit.
  • If your salary fell below £ 50,000 as a result of the crisis, there could be £ 250 with your name on it, courtesy of marriage allowance. This tax break allows a partner to transfer £ 1,250 from their personal allowance to the other half, reducing that person’s tax by up to £ 250 in the current fiscal year. You can claim it provided that all of the following conditions apply: you are married or in a civil partnership; a partner’s income is less than £ 12,500, or nothing; and the other partner’s income is between £ 12,501 and £ 50,000, or £ 43,430 in Scotland. HMRC will generally give the beneficiary partner its additional allowance either by changing its tax code or via the self-assessment system. Applying online is simple – go to gov.uk/apply-marriage-allowance.
car
car
Illustration: Ryan Gillert

Travel and transportation

  • If your car hasn’t moved in the past few months, why not let it go? Insurers will generally not let you suspend your auto insurance, but you can cancel it and get reimbursed for the remaining months. You can notify the DVLA that you are removing the car from the road with an off-road statutory notification (Sorn) and cancel the policy. Check the savings and fees you will have to pay before continuing. You will also save tax on the car for any full month during which it is off-road. But be aware that the vehicle must be physically off the road, on a driveway or the like. The big downside, of course, is that it won’t be covered if it’s stolen.
  • Even if you still need a car, you may be using it less than when you signed your contract. Churchill and Direct Line are among the insurers offer refunds to drivers who are in this position. You must contact your new mileage during the lockout and they will reimburse you based on the difference between this number and the number you declared when purchasing the policy. Check if your insurer does the same. If it doesn’t, but your policy is nearing the end, don’t let it renew without adjusting the mileage you pay.
  • If you no longer need a car you buy from finance, you can return it, as long as you’ve paid back at least half of the money owed. Section 99 of the Consumer Credit Act 1974 indicates how you can voluntarily terminate a regulated hire purchase or personal purchase agreement (PCP). With a PCP, the buyer makes a down payment, maybe three or four years of monthly payments, and then a final balloon payment at the end of the term if they want to keep the car. If you have paid half the value of the vehicle, you can request a voluntary termination. If you are close to 50%, you can choose to pay the difference to get there. You put the car back and escape the rest of the payments. Please be aware that no refunds will be given if you have paid more than 50%. Those who have agreements with HP can return the car earlier, usually halfway through, as there is no balloon payment. The Money Advice Service website has good advice on the process. A voluntary termination will appear on your credit report but should not negatively affect your credit score, he says.
  • Bicycle sales soared during the pandemic. You may want to consider purchasing a bicycle as part of your employer’s work cycle program, which will save you 25 to 39% of the cost. Employees who register get a voucher, which they take to their local bike store and use to purchase the equipment they have chosen, including lights and clothing. The savings come from the fact that you do not pay income tax or national insurance on the purchase price. In reality, your employer buys you a bicycle and you “rent” it by making monthly payments from your gross salary (before tax), generally over four years. Taxpayers at the base rate save a quarter on the cost of the bicycle and accessories. Higher rate taxpayers save about 40%. Technically, the bicycle belongs to your employer until the end of the four years, when ownership costs are due. Buy a decent lock and insurance, as payments must still be made even if the machine has been stolen. You don’t have to cycle to work to use the program, but most new applicants plan to do so.
  • Rail commuters who expect to continue working from home can still request a train pass refund, with an expiration date of up to 56 days. Passengers must return to the railway company that sold them, either in person at the ticket office or online. Note that you will not receive the cost of the annual ticket divided by 12, each unused month being returned. Refunds are calculated as the difference between the cost of the subscription and that of the cheapest means of making the same trips without it, using monthly, weekly or daily subscriptions. Use a refund calculator, like the one in the Southeast. Some passengers received more than £ 2,500 in return.
silver
silver
Illustration: Ryan Gillert

Change the way you pay

  • Millions of seniors left trapped in their homes after coronavirus struck discovered that without the Internet Bank account, daily banking is almost impossible. Halifax said the number of people over 65 signing up for online banking has jumped 63% and their use of contactless has also skyrocketed. Santander says the over 55s flocked online during the pandemic, with numbers up 54%. Signing up for an online bank account is relatively easy. You don’t need to have a smartphone but it helps. Otherwise, use a personal computer instead. Try your existing bank or create an account with one of the application-based providers such as Monzo, Starling and Revolut.
  • The pandemic and physical remoteness have already forced many of us to adapt our Payment habits. If you haven’t already done so, check out Paym, the free service launched in 2014 that allows you to send or receive money with any mobile phone number in the UK without sharing your bank details. . Industry organization Pay.UK says it is safe and effective, with 15 banks and mortgage companies offering the service, including all of the large ones. Watch out for fake messages, which recently impersonated Paym and asked customers to follow a link to receive money.
  • We are very likely to see many companies permanently shut down because of the coronavirus. From the consumer’s point of view, remember that payment by credit card offers you additional legal protection in the event of bankruptcy of the company from which you buy. If you use your credit card to buy something that costs more than £ 100 and up to £ 30,000, you are covered by section 75 of the Consumer Credit Act. This means that the company issuing the card has the same responsibility as the seller in the event of default by the company from which you purchased. If you are paying with a debit card, you may be able to request a refund later as part of the chargeback system. This is an agreement to which Visa and Mastercard have signed up. The card company will try to get your money back from the company you paid for by canceling the transaction. Please note that deadlines apply for making a complaint.
  • Even though the lock is easing (with the reopening of foreign markets and car showrooms in England from June 1 and other non-essential retailers from June 15), shops is likely to remain a marathon. Physical distance rules will limit the number of people that can be in a store at any one time, and buyers will face closed dressing rooms, restrictions on merchandise, and one-way systems. If there are things you buy every time and you can afford to pay a little more for, you might want to consider purchasing a subscription from an independent retailer. You can arrange regular deliveries of all kinds of food, including ground coffee, cheese, bacon and wine. Away from the kitchen, a few small bookstores offer to send you one book a month for a year. This is probably not a way to save money, but it will save you from having to visit a store and could help save a small business.
  • Likewise, a dairy can help you reduce trips to stores. Many provide non-dairy substitutes as well as the traditional pint. The Findmeamilkman.net website can help you find one that covers your area, but it doesn’t seem to be exhaustive, so ask your neighbors or use Google. Some of the larger companies such as Milk & More offer other products, including bread, vegetables and drinks.
  • In terms of returns and refunds, retailers have generally updated their policies since the start of the epidemic, allowing customers to return items after physical stores reopen and extend online return periods. This is generally between one and two months. The consumer group Which one? put pressure on late retailers who weren’t as generous. Your consumer rights are not affected by the retail disruption caused by the epidemic, although refunds take longer to process when stores and their customer service staff are under pressure.
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Illustration: Ryan Gillert

Put away your savings

  • Although the coronavirus crisis has been a financial disaster for many people, the simple truth is that many others are feeling better right now because they are spending so little. If this is you, it’s time to build a financial security cushion with some of the money you’ve saved through locking. Financial planners generally suggest that we need three to six months of spending as funds for rainy days, but a study in 2018 found that 70% of British workers were ‘chronically out of work’, with virtually no savings . If you’re lucky enough to have money in reserve, channel it to a savings account. The interest rate may not be very good, but separating it from your daily spending account will make access more difficult and require you to think twice before using the money. Check out Moneyfacts.co.uk for the best rates on different types of accounts.
  • Rebuild your Pension with some of that money that you don’t spend. According to Advisor Kirsty Stone of The Private Office, if you’re in your mid-forties and can afford to put £ 100 more a month in your pension, it could be worth £ 42,000 more in retirement by then you are 65 years old. If you could set aside an additional £ 250 per month, this could be worth an additional £ 100,000, using standard assumptions. You can also contact your HR department at work and ask them to increase the contributions deducted from your salary. In this way, you will receive a tax break of 20% or 40%, depending on your salary. If you’re lucky, you may find that your business offers a voluntary voluntary contribution plan (AVC) where it will match or partially match what you pay. .

Disaster planning

  • Make sure you have a will and it is up to date. Also check with older parents. The majority of Britons have not made a will. However, some unions offer their members free will. The same goes for several charities, including Cancer Research and the British Heart Foundation. It will work if your family setup is simple enough. If your financial or family situation is complicated, it will be worth paying for legal advice. Use the Law Society website solicitors.lawsociety.org.uk to find a local lawyer.
  • With the holidays abroad and many other trips pending, those lucky enough to have a garden will spend a lot of time this year, so it’s not surprising that people flock to garden centers to invest in their outdoor space. But if you’re splashing on expensive barbecues, patio furniture, and children’s play equipment, dig up your Home Insurance to verify that you are covered. The average British garden contains £ 1,457 of valuables, according to MoneySuperMarket. But financial reporting firm Defaqto says about 10 percent of home insurance policies don’t cover items left in the garden as standard. Many of the policies that offer coverage have low limits for these items, typically £ 1,000 or less, as outdoor space cannot be secured in the same way as a home. Minimize the risk by bringing items indoors or storing them in a shed or locked garage, if possible. If you have had to familiarize yourself with new technologies to teach children, make sure your kit is covered by your home insurance policy. A lot of home insurance will cover everything except the most expensive equipment, but check the fine print in case you need to increase your coverage. If you are a tenant and have never bothered purchasing insurance for your property before, it may be worth doing so now. Price comparison sites will help you find a policy that’s right for you.
  • The pandemic and its aftermath have prompted many to reconsider the amount of life insurance coverage they have, with some companies saying that many more young people are buying. Simple life insurance is still widely available and almost all policies, even those purchased today, will pay if the death is due to the coronavirus. Note that the price increases sharply as you get older. We got a quote from Aviva this week where the cost was £ 8.42 per month for a 37 year old man seeking payment of £ 100,000 if he died within the next 15 years. But if the person was 57, the premium increased to £ 45.22 per month.
  • If you are worried about losing your job and not being able to pay the monthly bills, things have become much more difficult. Many of the major price comparison websites that sell insurance have stopped providing quotes for unemployment cover. In theory, you can still get income protection coverage that pays if you get sick with a coronavirus. We obtained quotes for an office worker aged between the mid and late 30s, with an income of £ 40,000 per year, which would bring in an income of £ 1,650 per month for the next 12 months. LV =, Royal London and Legal & General all returned with quotes at around £ 20-22 per month. It is essential to check what is the minimum time during which you must be sick to obtain a payment. Most policies do not cover short periods of illness – the minimum period can be one month or much longer – so you will likely have to be sick with coronavirus for a very long time to get paid.
Coron
Coron
Illustration: Ryan Gillert

Other expenses

  • Review memberships and subscriptions to verify, you can still afford to pay them and get what you want. Some organizations, like the Barbican arts complex in London, have already announced to their members that they can extend their membership for free for the duration of the closure. Most gyms have frozen memberships while they are closed, with no fees until the clubs reopen. With some bankruptcy tipping and no guarantee that there will be no further blockages later in the year, you may want to opt for monthly payments rather than paying a year in advance. . David Lloyd, who has 100 tennis and racket clubs in the UK, is reopening gradually, but only for outdoor tennis. He has decided to keep his membership fee freeze until his clubs are fully open but has not announced what will happen next. The National Trust is a charity and wants its members to continue to donate to support its work. He says that for a limited period only, he allows members to benefit from a 25% discount when they renew their annual membership.
  • Parents who use government plans to get tax breaks for nurseries, childminders and after-school clubs will have accumulated money in their accounts without being able to use these services. Insurer Royal London estimates £ 18m may be tax free child care accounts. Parents can withdraw money if they need it. Older childcare vouchers cannot be refunded, but if you have this type of account, you can suspend payments while you are not using it. To stay in the program, you must restart them within 52 weeks.

The new workplace

  • If you are going to be work from home for several months, as seems to be the case for many of us, it is essential that you have the right equipment, such as an appropriate chair and desk, to ensure a healthy and productive work environment. Research from the Workplace and Facilities Management Institute earlier this month found that just under a quarter (24%) of employees surveyed had a separate home office, with almost two-thirds ( 64%) using makeshift workstations on dining room tables, sofas and beds. Some employers go as far as sending a van full of kit to their telework staff, while others do little or nothing. The Royal Bank of Scotland announced this month that it will distribute additional equipment such as office chairs, folding desks and screens to those who need it. Meanwhile, the BBC said staff can apply for an interest-free loan of up to £ 250 (with repayments deducted from net wages), which they can use to buy modest equipment to help them work more. comfortably at home. Ask your employer what they can do to help you. Which? has published a useful list of tips, which also includes recommendations for chairs and home offices.
  • You may be able to claim tax relief for your business expenses now that you are working from home. You can usually only claim for things that are only related to your work – for example, business phone calls or the additional cost of gas and electricity for your office space. You cannot claim things that you use for both your work and for private use, such as your broadband. Accountants Blick Rothenberg point out that HMRC allows employees who do not already complete a self-assessment return to make claims of up to £ 2,500 on employment-related expenses incurred in a fiscal year by using form P87. See the HMRC website for more information. The gov.uk/tax-relief-for-employees page includes sections on working from home and buying the substantial equipment you need to do your job. This page of the P87 form can also be useful.
  • Is your home broadband to scratch? Do not tolerate poor quality service. If yours is struggling right now, there are things you can do. You may want to ask your current supplier if they can upgrade you to a faster fiber package without any loss of service or the need for an engineer visit. And there are different tips and gadgets that could help you. Switching to a broadband provider is of course an option and may be the best bet for some. Most people will not need an engineer’s home visit. Comparethemarket.com recently stated that there has been a considerable demand for faster broadband plans since the start of the lockout restrictions.
  • For other home work expenses, try using the Technology available for business calls and meetings – Zoom, Skype and so on – rather than increasing the phone costs that, with all the chaos, you may never be able to claim in return.
  • Strictly speaking, everyone should probably inform their building and content insurer (s) if they are going to work at home for a while – especially if they have bought expensive new equipment to help them do their jobs. Likewise, you are responsible for verifying that working from home will not cause any problems with your mortgage or rental agreement.



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