HOW TO FIX BEING BROKE
Things may look bleak but Don’t panic, says Rosie MuRRay-West, there is help out there...
WHEN it comes to our experience of 2020, we might all be in the same storm, but certainly not in the same boat. That is particularly true financially, where some have been able to add record amounts to their savings since March, while others wonder if they are about to lose their homes because they can’t pay the bills.
New figures from GoCompare suggest that 9.7million people will face Christmas on a reduced income this year, with people up to the age of 44 most likely to have seen income fall.
Lee Griffin, founder of GoCompare Money, says that millions of households are planning to use their credit cards and loans to cover the cost of Christmas, which could make things worse. ‘Lockdown and other restrictions aimed at halting the spread of coronavirus have plunged the UK into recession, leaving millions of households struggling to manage on reduced incomes,’ he says. ‘If you are struggling to make ends meet, don’t ignore the problem in the hope it will go away. There is financial help available.’
There are several reasons why financial hardship is particularly acute this year, and why it is hitting specific sections of the population hardest. Lockdown two means that many people are still unable to work, and specific industries – such as events, hospitality, and the arts – are unable to function in any meaningful form.
Many employees in these areas are eligible for the furlough scheme, which the Government has now extended to March (with a review in January). This pays 80 per cent of salary, but
‘Don’t ignore the problem in the hope that it will go away. There is help available’
is capped at £2,500. The SEISS, a payment for the self-employed, pays out a similar amount – 80 per cent of average trading profits capped at £7,500 for three months. Those eligible for these schemes may have lost a fifth or more of their income, which in many cases won’t be offset by commuting costs and other savings, but there are many who have lost even more.
These include many self-employed people, an estimated three million, who are not eligible for SEISS or furlough because they trade through a limited company, have had more than half of their money paid to them through PAYE despite being self-employed, or have earned more than £50,000 in recent years. Many of these people have received no financial help at all.
Aron Padley, founder of campaign group ExcludedUK, says that the lack of support has provoked a ‘huge mental health crisis’. He explains: ‘We are now heading to eight months of no support and we are still in the exact same position as we were back in March. The eligibility criteria remains the same meaning those that were excluded initially remain in that same precarious position. People are desperate and don’t see a way out.’
The unemployment rate is also at its highest for three years, with an estimated 1.5million people out of work between June and August.
However, there are some steps you can take to help you get through this difficult time...