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  • 5 top tips to help cope with your bills if you're out of work

    With unemployment on the rise, Hannah Duncan looks at the help available for people out of work.

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

    This article is more than 6 months old

    It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

    As the COVID-19 pandemic unfolds, unemployment is expected to rocket across the UK. In response, some temporary measures have been put in place to help relieve some of the financial stress that the lockdown is causing.

    If you’re out of work and worrying how you will cope with your bills, we look at five steps you can take to help ease the burden.

    This article isn’t personal advice. If you’re having difficulties speak to the Money Advice Service. Anyone can use this free and impartial service for guidance across a wide range of money matters.

    Tip 1 - check what you might already be entitled to

    If you’ve been temporarily laid off, you might be able to salvage some of your income. You could speak to your employer or the HR department about any furlough arrangements, or you could check in your contract to see if you’re entitled to any contractual guarantee pay or statutory guarantee pay.

    You could also double check to see if you have any insurance policies, which could offer you some extra income in these circumstances.

    If you’d like some assistance on getting to grips with your contract or rights, your local Citizens' Advice service may be able to help you.

    Tip 2 – check if your eligible to claim any benefits

    Losing your job is tough, but hopefully you should be able to get some support from the Government in these times. While it’s unlikely to be the kind of money you’re used to getting, it could help you to cover the essentials.

    You may be able to claim for Universal Credit. To see if you might be eligible for this or any other benefits, it could be worthwhile to try out the benefits calculator on the Government website.

    Tip 3 - request a mortgage holiday

    For homeowners, probably one of the heaviest monthly expenses are your mortgage repayments. For people who are struggling, you may be able to request a “mortgage holiday”.

    You’ll need to contact your bank or building society to talk to them about freezing mortgage payments for up to three months. This measure was introduced by the Government to try to help Britain’s homeowners through the COVID-19 pandemic.

    For people who are renting their homes, following the new Government rules, landlords will have to give tenants at least three months’ notice if they intend to seek possession of a property. This should help reassure some tenants who are struggling with pay cuts in the pandemic.

    If you’re having difficulty paying for rent and your landlord is talking about eviction, your local council housing advisor might be able to help.

    Tip 4- freeze or reduce overdraft fees, credit card and loan repayments

    If you have pre-existing debt repayments, credit cards or overdrafts, you may be able to delay or freeze interest payments. In response to the pandemic, the Financial Conduct Authority (FCA) has put temporary measures in place to help people with short-term cash flow issues. These include interest-free arranged overdrafts for up to £500 and a three-month payment freeze on credit cards, motor finance, rent-to-own properties and pawnbroking agreements.

    Remember, borrowers shouldn’t just assume opting for a payment freeze is a good idea – especially if you’re likely to still be in financial difficulty three months down the line. It could leave you in the same horrible position.

    At the end of the freeze if you have to ask your lender for more help, it’s likely to start damaging your credit record and any missed interest payments will build up even more debt.

    If you expect to continue to face payment difficulties after these temporary measures have lapsed, it’s better to have conversations with your lender now than wait until it’s too late.

    To find out more about the relaxed rules, you’ll need to contact your bank or creditor.

    Tip 5 - check to see if you can claim back tax

    If you’ve been out of a job for more than four weeks, and don’t expect to be going back, you may be entitled to claim an income tax rebate.

    There are some conditions though, for example, if you are claiming Jobseeker’s Allowance, you won’t normally be eligible. For a full list on conditions, you can find our more and make a claim on the Government website.

    While these measures are not permanent solutions, some of them may help you and your household to cover bills and essentials, until things pick up again.

    While we hope that these tips are useful, they’re not personal advice. If you are at all unsure of the best course of action for your circumstance, seek advice.

    How to make your emergency fund stretch further

    More people are currently having to dip into savings to cover living costs. For those who managed to put some savings aside into a rainy-day fund, you may be starting to think about ways to make it stretch further.

    We've taken a look at some actions you could take to help make your emergency fund last that extra bit longer.

    See our savings tips

    Hannah Duncan is an investment writer, and founder of Hannah Duncan Investment Content, with years of experience producing content for global leaders in finance and retail.

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      Important notes

      This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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