New research from LinkedIn suggests that coronavirus is dividing the nation when it comes to our finances. While 22% of furloughed workers are struggling to afford their rent or mortgage repayments, almost half of those surveyed said they are financially better off and have saved an extra £300 in the past month.
It seems lockdown is a tale of two halves. For every person who is still earning their normal salary but working from home and saving on that expensive commute, there’s somebody who has been furloughed or lost their job totally.
Finance expert, Iona Bain, says that these times are unprecedented and there are a lot of people who are getting no help from the Government.
“The research tells a tale of two extremes,” she says. “There’s also a lot of people who are falling through the gaps when it comes to government support and loans.”
However grim it seems though Iona says there are things that you can do right now that will also help your future finances.
“Whatever side you fall on, there are definitely things you can start doing to get in control of your finances,” she says. “It’s the habits you form now that will benefit you in the future.”
1. Know what support options are available to you
Make sure you understand what resources are available to you at the moment. The three main avenues to look at as an individual are the benefit system, the coronavirus self-employed income support scheme, and the hardship fund. You can apply for Universal Credit if you are on low income, you are out of work, you are over the age of 18, and if you or your partner have less than £16,000 in savings.
I would highly recommend going to www.turn2us.org.uk to see what benefits you may qualify for. If you fall through the gaps, there may be additional help available through industry specific associations and charities, so it’s worth doing your research.
2. Protect your pension
A lot of people are really worried about how the current climate will impact their pension, and I would strongly recommend seeking professional advice to help you build a retirement savings plan specific to your circumstances.
You are entitled to a ‘Pension Advice Allowance’ which is up to the value of £500 from your pension pot to help cover the cost of a financial advisor. Alternatively, you can also find free advice from advisors via the Emergency Financial Advice website which has been set up specifically to help people concerned about their retirement funds at this time.
3. Build a financial buffer
If you’re fortunate enough to be in a position where you are able to save during these unprecedented times, try and build up a savings buffer. Begin to save for the sake of saving, without having an end goal in mind.
Though savings rates with the Bank of England are at a record low, there are other challenger banks offering slightly higher interest rates. Don’t be discouraged by the current climate, if you remain patient you may see these interest rates start to increase over upcoming months
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