The pros and cons when it comes to payment holidays
FACE-TO-FACE TEACHING BOOSTS PUPILS’ LEARNING AND WELLBEING
As we approach a year of lockdown and life-changing measures to combat Covid, more people than ever are contacting me to ask about how to sort out their debts. With new measures in the budget to help many people through the next few months, there’s never been a better time to tackle debt. Yet research from Resolver reveals many people were confused by the options available – and by ‘payment holidays’ in particular.
What is a payment holiday?
To help people face the financial challenges posed by the pandemic, the regulator for all things moneyrelated, the Financial Conduct Authority (FCA) – introduced clear rules for lenders so they could offer people ‘holidays’ from mortgage, loan, car finance, credit and other financial debts.
This means you can potentially get a
‘holiday’ from your financial obligations for a total of six months – though this is only available in three-month chunks.
While this temporary relief from financial commitments has been broadly welcomed, over a third of the people Resolver surveyed did not realise that financial businesses were allowed to charge interest on the outstanding balances or when this would be payable.
Furthermore, a third of people who’d taken a payment holiday did not realise this either. This matters because, if you take a payment holiday, you may have to pay more money over a longer period.
How many people are affected?
The survey also revealed that many had struggled in the last year.
A fifth of people had been forced to use their overdraft facility in 2020 – with half of those straying over £500 and finding that they’re being charged high overdraft interest as a result. More than a third of people told us they were worried about repaying their debts.
Worryingly, large numbers of people have told me that when the payment holiday finished, the lenders were less than helpful about the options available.
How can I tackle my debts?
Don’t be disheartened. There are lots of things you can do for free to tackle your debts. I’d suggest:
Set aside a morning or afternoon: Sometimes the process of dealing with debt can make you feel better about what you owe. Take your time and have a few breaks while you do it, though.
Do a mini budget: Work out what money you’ve got coming in and what your outgoings are. Go through your bank, credit card and mobile phone statements and cancel anything you don’t need. If you haven’t authorised payments you can seek a refund too.
Contact businesses ‘off-peak’:
Lots of people tell me they’re waiting a while to get help on the phone. There’s no way around this one, I’m afraid. But try to call mid-morning, mid-afternoon or early evening if the helpline is open later. Have your details handy: Explain to the business your current cashflow and work situation. Ask them to provide solutions tailored to your situation and confirm in writing what they are. If they don’t help, tell them you’ll be going to the (free) Financial Ombudsman.
What if I’m in difficulties?
If you’re really struggling to get help or are finding it all a bit much, free debt charity StepChange can help you with your creditors. Never pay a debt management service, no matter what they promise you.
There are a number of Government rules in place to prevent businesses taking action against you in terms of legal action and debt recovery, depending on the type of lending you have and which country in the UK you live in.
There are also separate rules relating to rent and people in arrears. Needless to say, if you are in arrears with your rent, it’s vital that you seek help without delay.
Check out the gov.uk website (type in ‘help with rent’ to get the Government guidance in full).
Resolver can help you with any complaint you have about money and debt. Go to resolver.co.uk
PARENTS all over the country are breathing a sigh of relief as their children prepare to go back to school after a difficult few months. The classroom is the best place for children to be, as face- to- face learning gives them a secure routine and normality, and helps with their socialisation, motivation and mental wellbeing.
Schools and colleges are now fully reopening, welcoming back all pupils, and their health and wellbeing are a priority. Schools are well prepared, with protective measures in place, including bubbles, increased hygiene, staggered breaks and ventilation.
Staff and pupils in secondary schools and colleges are also being advised to wear face coverings where social distancing cannot be maintained. Students will be tested twice a week, receiving three initial rapid tests at school or college before transitioning to twiceweekly home testing. Schools have been open to vulnerable pupils and children of key workers during lockdown; staff have worked hard to make sure the wider return goes smoothly and schools are as safe as possible. And they are passionate about closing the education and wellbeing gap. The Government is supporting the return and education catch- up through various programmes (see below).
Dean Buckley, principal of Kirk Balk Academy, a secondary school in Hoyland, South Yorkshire, can’t wait to welcome students back.
“It’s essential that students return to school as quickly as is safely possible,” he says. “Despite live-streaming of all of the lessons, our students have missed out on so many of the positive experiences of school. They’ve been affected by not being able to see friends, play sport and interact with each other.
We can’t wait for them to be back where they can learn and flourish. “Our students really do thrive on the strong routines and the positive praise culture that we have, and we’re really excited about picking up where we left off, and doing all that we can to make sure we reconnect with a sense of normality and purpose towards enjoying learning and succeeding.” Kirk Balk, a Northern Education Trust academy, has had around 120