Covid debt and mortgage support for millions of Brits to end in two weeks – how to get help next
VITAL financial support for Brits struggling because of coronavirus will come to an end in two weeks time.
Millions of people have paused repayments on mortgages, credit cards and loans thanks to emergency rules introduced during the pandemic.
Payment holidays are when a lender agrees to pause your monthly repayments for a set amount of time.
The payment breaks were designed to give anyone struggling financially some breathing space, particularly for those furloughed or who lost their job.
Support was announced by the financial watchdog last year when coronavirus first hit and plunged the country into lockdown for the first time.
Banks and lenders were told by the Financial Conduct Authority (FCA) that they must let customers pause repayments on a range of debt, including:
- Credit cards
- Personal loans
- Payday loans
- Buy now, pay later agreements
- Car finance
The payment holiday support was extended several times and now anyone who applied before the final deadline will find their break ending by July 31.
Banks and lenders will still be offering help to anyone who continues to be in financial difficulty because of Covid after this date.
But help will be on a case-by-case basis and tailored to each person's circumstances and can include help other than a payment break.
There are also options for those worried about making repayments again or battling debt – and plenty of help is totally free.
A spokesperson for UK Finance, the industry body which represents banks and other financial institutions, said millions of people impacted by the pandemic have benefited from help so far.
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They said: "For anyone who is still struggling after payment deferrals come to an end, ongoing support will be available including tailored assistance.
"We would urge customers experiencing financial difficulty to contact their lender as soon as possible to discuss and agree on further support.”
The end of the payment breaks comes as job support through furlough winds down and the Universal Credit £20 a week uplift is set to end.
The government's Covid support is set to end as the country opens up from lockdown and the economy gets back on track.
But there are still fears that more people could end up with money troubles.
Household finances remain a "complex" picture, Richard Lane, director of external Affairs at StepChange told The Sun.
He said: “So far, support from the Government and credit industry has been vital to keeping many of those struggling afloat, with creditor forbearance and provisions such as the £20 uplift to Universal Credit both preventing many from falling into problem debt.
“With these measures due to end, it seems likely we will see an increase in the number coming to us, however it’s impossible to say whether that will happen quickly or be spread out over time due to the unpredictability of the pandemic and differing reactions to it."
Those who were already financially vulnerable before the pandemic, such as young people, single parents and renters, are likely to be worse affected, he added.
Here we've rounded up the support you can find next if your payment break is ending.
What support can I get from my bank or lender after a payment break?
Your lender is still obliged to help you and before the end of the payment break they should have explained the options available after.
This could include he following if you took a break from paying your mortgage:
- Extending the length of your mortgage
- Changing the type of mortgage you have, for example, paying only the interest
- Deferring interest payments
- Adding the interest owed onto the mortgage balance
Your bank should also be able to help you understand the pros and cons of these.
For instance, if a change of mortgage come with fees, or how much more you'll pay in total by extending the term.
The help available is not limited to this though, and that's why you should speak to your bank or lender directly and as soon as possible.
You should never just stop making repayments on your mortgage.
For anyone coming to the end of a payment break for a credit card, personal loan or other type of debt, there will also be assistance. This could include:
- Reduced payments for a further short period if your circumstances are expected to improve
- Reduced payments via a longer-term repayment plan if your financial difficulties are more severe
- Refinancing of the outstanding balance so that repayments are more affordable
Again, these are the options that could be available depending on your circumstances, and there could be other options too.
Never just stop making payments and if you are struggling to pay money back speak to your lender or bank as soon as you can to tackle the problem.
What other support can I get after a payment break?
If your circumstances have changed because of Covid, or your income has taken a hit, you should check if you're entitled to financial help.
Check what benefits you're entitled to even if you're in work as you might get cash support if you're on a low income.
There's £15billion of benefits going unclaimed and you could get backdated pay too if you find you're eligible – you can use a benefits calculator to check.
Martin Lewis this week reminded anyone who made a claim for Universal Credit but wasn't eligible to try again if they have used up some of their savings.
What benefits are available?
IT’S not just the unemployed who can claim from the welfare state.
These are the benefits that are available from the Government, broken down into sections:
The six main means-tested benefits have now been merged with Universal Credit. These are:
- Working tax credit
- Child tax credit
- Housing benefit
- Emplyment and support allowance
- Jobseeker's Allowance
- Income support.
- Family benefits
- Child benefit
- Child tax credits
- Guardian's allowance
- Statutory maternity/paternity/adoption pay
- Marriage allowance
- Maternity grant
- Maternity allowance
- Widowed parent's allowance.
Able to work
- Working tax credit
- Contribution-based jobseeker's allowance (JSA).
- Income support
- Income-based jobseeker's allowance
- Income-based employment and support allowance
- Pension credit
- Housing benefit
- Council tax reduction
- Free school meals, milk or uniforms and healthcare
- Support for mortgage interest
- Budgeting loans and advances
- Funeral payment
- Local council support schemes
- Cold weather payments.
Health and disabilities
- Attendance allowance
- Personal independence payment
- Carer's allowance
- Contribution-based employment support allowance
- Statutory sick pay
- State pension
- Bereavement allowance
- Bereavement payment
- Winter fuel payments.
If you're self-employed check your eligible for up to £7,500 through the Covid grant.
Anyone who's worked from home for even a single day over the past year can claim up to £500 in tax back.
If the end of the break is putting pressure on other parts of your finances, don't be afraid to seek help there too.
Contact your energy company directly if you're struggling with bills or your local authority for Council Tax.
Council Tax is considered a priority bill as not paying it can result in court action, but there are loads of ways you can get help paying.
If debt is a bigger worry you'll find lots of support out there to get you through.
Mr Lane said: “The most important advice we’d give anyone struggling with their debts as these support measures come to an end is to contact a free debt advice agency like StepChange.
"We can evaluate their situation, talk them through the best solutions to deal with their debt, and help set them on the path to recovery.
"You can get free debt advice over the phone on 0800 138 1111, or 24/7 online at stepchange.org.”
There are plenty of services you can take advantage of and they offer free and friendly advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
- Money Advice Service – 0800 138 7777
- Citizens Advice – 0808 800 9060
- StepChange – 0800 138 1111
- National Debtline – 0808 808 4000
They can also help you take the next steps if you need a debt management plan (DMP) to tackle your debt or an Individual Voluntary Arrangement (IVA). These are agreements for managing multiple debts.
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