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WWith gyms closed, taps turned off in pubs, and the prospect of a vacation as a distant dream, many people are discovering that their outings have decreased since closing. But the shadow of an impending recession and concern about whether the jobs will exist even when offices are reopened means that many are looking at their finances even more closely.
So what are the best ways to improve them in the midst of extraordinary times and an uncertain future?
Energy prices
Not traveling to the office brings some savings, but not all is good news. Working at home could be driving energy bills up 16.5% a month based on price comparison and uSwitch exchange service.
However, wholesale energy prices are declining, and some of the smaller providers are passing it on to the consumer. So it is worth taking a tour.
“There is a huge gap of £ 404 between the cheapest offer on the market and the price limit on the standard variable rate,” says uSwitch. “The gap has not been as wide since last summer.”
It’s always worth seeing if you can cut your bill. But be sure to look at the unit price to make sure you’re comparing similar.
Companies can pay staff £ 6 a week tax-free if they are required to work from home, so find out if that’s an option.
Working from home
If setting up a home office means buying new equipment, you can apply for an income tax exemption for employment expenses, including broadband and heating. Complete a P87 form if expenses are less than £ 2,500 per year. For more than that, you will need to complete a self-assessment tax return. Relief is available if the expenses are “totally, exclusively and necessarily” necessary for the performance of a job, so they cannot be purchased for personal use and claimed later.
Mortgages
The loss of income has led to more than 1.6 million households requesting mortgage payments and deferred interest charges for up to three months, but it is not a light step.
While there have been guarantees that taking a “pay holiday” will not affect an individual’s credit rating, there have been warnings that some may be rejected for future loans, as they effectively declare that they are in financial difficulties.
You must agree to the “mortgage vacation” with your lender; otherwise, payments that are suspended may be recorded as late.
Talk to your lender about extending the term, which will increase the total amount paid but will make it more manageable each month. And if you don’t have a special agreement, you can rehire.
Since the base rate cut, the number of mortgages has been cut almost in half, depending on which one? But there are still some competitive rates to choose from.
If you have a tracker mortgage or other type of variable rate deal, you should see costs drop by about £ 40 per month for every £ 100,000 borrowed.
Car insurance
With quieter roads, insurers are reaping the benefits of fewer claims.
Some are broadcasting some of this: Admiral was the first to offer partial refunds to drivers stranded at home, promising £ 25 for each covered car and van starting April 20. LV = has also said that it will return money, but this will not happen automatically or for everyone. Contact the company if you think you qualify.
Drivers who are doing far fewer miles can get a partial refund by contacting their insurer. This could also be an option if a named driver is not using the car.
There is preliminary evidence that the impact of the coronavirus may decrease premiums. “An unintended consequence has been fewer cars on the road and fewer accidents, so it’s fair to assume that this could result in reduced prices,” says Dave Merrick of MoneySuperMarket. Drivers are advised to ensure that their policy is not “automatically renewed” and that they can reap the benefit of price comparison.
Savings and interest rates
This year is the end of a lost decade for savers, and recent events will leave them with little confidence that there will be an improvement in the near future. At the height of this emergency, the Bank of England cut interest rates twice in the space of a week, taking them to the lowest level in their history.
Although changes in the base rate take approximately three months to go through the market, there is already evidence that savings rates are being achieved. The average easy access rate, where you can withdraw your money at will, has fallen from 0.56% to 0.38% during the tumultuous period, according to the financial data site Moneyfacts.
This may not be the end of the cuts, so people would be wise to look at the best rates available now and switch. “In the coming months, consumers can rely on simple savings accounts to store any disposable income from the lockout, cash drawn from the stock market, or even cash pension freedoms,” says Rachel Springall of Moneyfacts. “If this cash floods the savings market, providers could cut rates to discourage investors, if they are flooded with cash, or even open accounts entirely to meet demand. This means that savers must be quick from the start to secure the best possible rates and keep a close eye on the changing market. ”
Leaving money at street banks won’t earn you much, so it’s worth checking out what challenging banks can offer – for example, NatWest’s easily accessible rate is 0.01% compared to 1.20% RCI Bank UK.
Some people may consider a fixed one-year bond to guarantee them a return for the next year, but due to uncertainties surrounding the economy once the coronavirus problem subsides, some will be reluctant to block their money.
The best rate for a one-year fixed account is 1.65% with the Bank of London and the Middle East, which also has the best two-year correction at 1.75%. FCMB Bank gives 1.75% on a three-year correction. They all have a minimum investment of £ 1,000.
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