The Coronavirus pandemic has hit everyone financially. In order to release the strain slightly, payment holidays from paying rent and mortgages have been made more readily available.
Payment holidays are agreements you make with whoever you pay your mortgage or rent to. It means you don’t have to pay anything for up to a few months. This might be an agreement you make with your bank, council or local authority, for example. They have existed for many years as a way to overcome short periods of financial uncertainty, and are available for credit card debt too. With the rise of Coronavirus, they have been made available to more people than ever before.
How to take a payment holiday
Payment holidays must be agreed in advance with your lender or council. You should never simply stop repayments or cancel direct debits without an agreement in place first. Doing so can harm your credit score as well as put your further in debt.
Banks have been encouraged by the UK Government to offer support to those hit financially by Coronavirus. They have offered easier ways to apply for a payment holiday for mortgages. You can find out how to apply for one on your bank’s website. Similarly, if you are struggling with credit card debt, you can visit them online for help.
Councils also offer payment holidays to tenants struggling to pay their rent. Similarly, more information can be found on websites. You can also give your council a call, but lines will probably be very busy due to less staff available at the moment.
Many people will have been struggling to pay rent to the council, as they are used to doing it in person at local offices. At the moment, many residents will not be being pursued by the council for unpaid rent. It’s a good idea to give your local council offices a call, so that they can help set up a payment plan for you.
It’s important to realise that a payment holiday is to offer breathing space – you still have to pay back the money that you owe. You won’t have to pay it back in one lump sum. Rather, your monthly mortgage repayments will rise slightly until it is paid back. You may have agreed a payment plan with your council to pay back any owed rent to them after a set date.
Paying Council Tax
Even at the moment, everyone is expected to pay their council tax. However help is available to those who need it. You may be entitled to a council tax reduction, especially if you have recently seen a reduction in your income, or have had to apply for Universal Credit. Make sure you speak to your local council before changing how you currently pay.
Keep an eye on your finances
Now more than ever is a good time to get into some healthy finance habits. Make sure you know what income and outgoings you have. Remember, you will be expected to pay back any money you owe after payment holidays are over. If you would like to talk more about payment holidays, getting into a better financial shape, or have any worries about how Coronavirus is impacting your finance, give us a call or send us an email. We’ll arrange a time to for a free, confidential chat.