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Saving money during COVID-19

The next few months are going to be incredibly stressful, whatever your circumstances.

Making sure your finances are in the best shape possible will be essential to getting through the economic impact of this crisis. With that in mind, we thought we’d share our top do’s and don’ts for looking after your money.

 

Do’s

  • Do make an emergency budget. If you’re concerned about managing your money during the crisis, you will need to look at how much money you are earning and spending. You may have to cut back to ensure you can manage in your new circumstances. The Money Advice Service has a great budget tool which can help.
  • Do use your savings if you have any. Many banks and building societies will now allow you to access and withdraw your savings with no penalties. Check your bank or building society’s website to see if they can help.
  • Do talk to your creditors or suppliers if you think you’re going to miss any payments. After you’ve completed your budget, if it looks like you will struggle to pay any essential bills make sure you talk to the company you will owe money to before it becomes a problem.
  •  Do look at switching energy suppliers. Your transport and food costs may fall if you’re working from home, but you may also notice your energy bills go up. Switching to a new supplier could save you more than £300 per year if you swap from a standard variable tariff to one of the cheaper deals. You can read more about how to reduce your energy bills here. 
  • Do review your subscriptions and memberships. If you have a gym and sports tv subscription, you should consider cancelling or postponing them until the crisis is over. Many gyms have stopped taking payments while they are closed, but it’s important to double-check. Sky Sports is also allowing you to pause your subscription free of charge during the virus outbreak.
  • Do consider remortgaging. If you’re approaching the end of your fixed-rate mortgage deal, remortgaging could save you thousands of pounds. Mortgage rates are extremely low, so you could save a significant amount. However, some lenders have begun removing remortgage deals to ease pressure on banks staff, so it’s worth considering if you need to remortgage now or if you can afford to wait a few weeks.
  •  Do watch out for scams. Fraudsters are using the coronavirus to scam people out of money. These scams include selling fake coronavirus tests and coronavirus-themed phishing emails and texts asking for your bank details.

Don’ts

  • Don’t ask for a mortgage holiday unless you can’t afford to make the payments. A mortgage holiday sounds like a great idea, but delaying the payment means the money is still owed and interest continues to accrue so you will end up paying more in the long-run. If you’re starting to struggle, you could ask your lender to let you reduce your monthly payments or switch to an interest-only arrangement.
  • Don’t rule out universal credit. Following the chancellor’s reforms last week, the benefits payments are now larger than you might expect. Universal credit payments have gone up by £1,000 a year and housing allowance has been unfrozen, so pay-outs can be much more generous.

The Youtility app

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