Lockdown 3.0: What Help With Money Is Available?

For a lot of people, starting the year in lockdown is more than an inconvenience or a sign that perhaps 2021 won’t be the opposite of 2020 as we all hoped. Rather, it’s another financial setback, getting in the way of being able to return to work – and wages. If your finances have been affected, whether for the first time because you’ve been able to ride it out this far, or you’re experiencing the lasting financial impact of the pandemic, then this guide is for you. Read on to find out what financial help is available to you as we navigate our way through Lockdown 3.0.

Payment holidays

In November 2020, the government confirmed that the payment holiday initiative launched at the start of the pandemic would be available for a bit longer, to provide continued support for those affected by coronavirus.

Under this initiative, people who are struggling to keep up with payments they owe to various types of lenders because their incomes have been affected by the coronavirus pandemic can apply for payment holidays of up to three months at a time, up to a maximum of six months in total, from each of their lenders.

The extension of this scheme means that if you haven’t yet taken a payment holiday at all, or if you have had one in the past but it didn’t last for six months, you have until 31^st March 2021 to apply for one if you need it. As it currently stands, no payment holidays will be extended beyond 31^st July 2021, even if you haven’t reached the six-month limit.

Of course, if you’re able to keep making your payments as normal, then you should make them for as long as you can. Because lenders can still charge you a reasonable rate of interest while you’re on a payment holiday, taking one that you don’t really need isn’t advisable.

 Payment holidays aren’t right for everyone, but they can be a big help to those who know that once they’re able to start working and earning their full salary or wages again, they’ll be able to start repaying their bills again as normal.

Read more about payment holidays in our guide

Speak to your lenders

If you’ve already taken six months’ worth of payment holidays, or you’re experiencing the kind of financial difficulty that means a payment holiday would provide temporary relief but not really help you long-term, then speak to your lenders. While payment holidays are at the front of people’s minds right now, there is plenty of other help lenders can offer if this isn’t the right kind of help for you. They can freeze interest and charges, help you set up an alternative, more affordable way to repay what you’ve borrowed over a longer period of time, and even help you access professional, unbiased debt advice if you want or need it.

Speaking to your lenders about how you can’t afford to pay them back probably isn’t a conversation you’re looking forward to. But, biting the bullet and picking up the phone will not only not be as bad as you’re expecting thanks to lenders’ dedicated, specially trained teams, it could also help limit how badly your credit score gets damaged by your struggles. If you avoid your lenders and simply don’t pay, then eventually, they may decide to pursue legal action that results in a CCJ being filed against you, or they may decide to transfer ownership of your account to a specialist debt collection agency. Either of these actions are pretty bad news for your credit score. But, by speaking to them, allowing them to help you and getting into an alternative payment plan or an official debt solution, they’re much less likely to take these “last resort” actions to recoup the money you owe. Your credit score will still be negatively affected, but it won’t be as bad as if you ended up in court over your debts.

Test and trace support payments

If you’re asked to self-isolate by NHS Test and Trace, then you might be able to claim a one-off payment of £500 from the Self-isolation Support Scheme.

To be able to get this support payment, you will need to meet all the following criteria:

• You must be self-isolating, either because you’ve tested positive for coronavirus, or because you’ve been told to isolate by NHS Test and Trace or the NHS Covid-19 app
• You’re employed or self-employed, and cannot work from home (and will lose earnings) while you’re self-isolating
• You’re on a low income (this is defined by your local council)

When you submit your claim, you will need to provide certain pieces of evidence for your application to be considered. The evidence you could be asked for includes bank statements, proof of employment like payslips, or copies of your business accounts if you’re self-employed. Perhaps most importantly, though, you’ll need to supply a copy of your notification to self-isolate from NHS Test and Trace. This includes the date you were asked to isolate, how long for, and a unique, 8-digit ID number known as a CTAS number. This is different from the reference number given to employers.

If you live with other people who are in the same boat as you and you all meet the criteria, you can each submit an individual application to receive this support payment. You can also apply for it more than once if you’re asked to self-isolate multiple times. But, you can only receive it once per period of isolation.

You won’t be eligible to receive this support payment if the reason you’re isolating is because you’ve just returned from abroad (unless you test positive during this isolation). You also won’t be eligible to receive it if you’re able to work from home and can receive your full wages during your self-isolation.

It’s important to bear in mind though that if you receive this payment, it isn’t a complete freebie. The Test and Trace support payment is taxable, and while no money will be taken from the payment itself to cover the tax, HMRC will tweak your tax code so that they can collect the tax automatically through your wages when you return to work. If you’re self-employed, you should report that you’ve received this payment when you complete your self-assessment.

The closing date for this scheme is currently January 31^st 2021, but keep your eyes peeled for updates in case the government decide to extend it!

Statutory Sick Pay

If you are asked to self-isolate, or have taken official NHS advice to “shield” because you’re at high risk of becoming very ill if you were to catch coronavirus, and you’re unable to do your job from home, then you could receive Statutory Sick Pay (SSP) even if your employer doesn’t pay you other sick pay. SSP is a sum of £95.85 per week you are unable to work because you’re isolating, shielding or unwell. It’s paid by your employer, in the same way as your normal wages or salary, for a maximum of 28 weeks.

To be able to receive Statutory Sick Pay while you’re self-isolating, your isolation must last for at least four days. But, you can receive SSP for every day of your isolation. This is different to when you receive SSP for other reasons: Statutory Sick Pay is usually paid from the fourth day you are off work sick.

If you’re shielding, you must be able to provide your employer with a copy of the official letter you received advising you to shield, which will have come from your doctor or a health authority like the Department of Health and Social Care. You will then be able to receive SSP for the time specified in the letter.

If you have to self-isolate or have been advised to shield more than once, then you can be paid SSP on each occasion of isolation or shielding.

Benefits

If you’re unable to work – or earn – because of the pandemic, or are having to manage on a smaller income, then you may be eligible to claim benefits like Universal Credit to help you get by until you can return to or get back into work.

Universal Credit is a means tested benefit that’s designed to help you if you’re on a low income or are out of work. This means that how much you get is decided based on your age, circumstances, and how much, if anything, you’re earning now.

If you’re unable to work because you’re shielding or self-isolating, you may also be able to claim the “new style” Employment and Support Allowance (ESA). This benefit could mean you receive up to £74.35 a week if you’re able to return to work when the pandemic allows, or up to £113.55 a week if you have a condition that affects how much you can work, if at all, that won’t change over time.

You’ll need to provide evidence to support your claim for ESA, such as your notification to isolate from NHS Test & Trace or the NHS COVID-19 app, an “isolation note” from NHS 111, or a letter from your GP or a healthcare authority advising you to self-isolate or shield. But, it can take up to 13 weeks to assess your claim, and you also can only claim ESA if you are not receiving Statutory Sick Pay. However, you may be able to claim ESA alongside Universal Credit.

If you’re unsure of what you’re eligible for and how to apply, your local Citizen’s Advice is a good port of call to get help and advice on this.