Tips to ensure you are financially secure whilst on furlough
With the ongoing coronavirus pandemic affecting all aspects of our lives, including shutting down all non-essential businesses, many people have found themselves temporarily laid off by their employers. If you are one of those who have been furloughed, you might be feeling the pinch as your wages are cut.
Some employers are paying staff in full during this time, but most are offering 80% of wages. This is the amount that the UK government is subsidising, during the weeks and months of ongoing lockdown in the country. If you are one of those taking a 20% pay cut, you might be wondering how to manage your finances to get you through this time. Below are some tips for cutting your expenses.
Payment holidays on loans, mortgages, rent and bills
Worrying about paying the bills? It is possible to defer some payments, such as credit cards and loans, for a period of three months. You will need to contact your lender to request this. Mortgage holidays can also be arranged on request.
Rent will still need to be paid, but your landlord might be able to offer a reduction, or suspend payments, if they are able to request a mortgage holiday themselves or if they can afford to cover the losses through insurance or personal funds.
If you are experiencing financial hardship, you can contact your energy providers and local council to discuss reducing bill payments, deferring for a month or two, or making some other arrangement to keep your costs down.
If your furloughed wages take you below the threshold for benefits, you should make an application through the Government portal. Universal credit can help with everything from household expenses to rent and bills.
Full refunds on travel bookings
Almost all flights in and out of the UK have been grounded, and the Foreign Office advises against all non-essential travel for an indefinite period. If you had a holiday booked, you will need to contact your travel provider to request a refund. Some travel providers are issuing refunds as standard, while others will offer a credit note for rebooking in the future. If your trip is insured, your insurer, or your credit card provider, should be able to help you get your money back.
Reduced spending on travel costs and social activities
As we all have to stay home, you should find that your travel costs and leisure spending have fallen significantly, and this should go a long way towards boosting your finances. From to-go coffees and takeaway sandwiches to taxis and meals out, those little spends we all make soon add up – and you might even find yourself able to save a little, despite the loss of income from furloughing.
Staying home also means more time for home cooking, so put down the takeaway menu and create tasty meals from scratch at a greatly reduced cost. Have a movie night at home and save on cinema tickets, and enjoy social distancing drinks with friends over video calling apps, without paying for expensive rounds in bars.
Working while furloughed
Some people on furlough have taken up temporary work to boost their income, while still receiving their 80% pay from their employer. As long as you discuss this with your bosses, and make sure HMRC is aware of your extra work, you could earn extra cash by carrying out an essential role. Supermarkets and food delivery services, in particular, are recruiting extra staff to deal with high demand.
Alternatively, you could look for freelance work from home during the furlough period. Again, make sure you clear this with your employer and stay within the terms of your contract.