During these times of uncertainty brought on by the coronavirus, those in the electrical trade may find not only their business and work being negatively impacted, but also their mental health. The Electrical Industries Charity (EIC) is keen to outline what support it can provide to industry members. Please read on for our 15th October update.
We understand this is a complex and difficult time for everyone. We are living in a time of great uncertainty and increasing worry about our health and livelihoods. We understand that the effect of COVID-19 on industry and income will be great and we will all be affected. In times of darkness and insecurity we want to let our Industry members know, that we will be here to help you.
Today’s update on restrictions in London – ‘Moving the city up a notch to "high" means mixing between different households or social bubbles is banned indoors, including in homes, pubs and restaurants. Groups of up to six people will still be able to meet outdoors in public spaces and private gardens.’ .https://www.telegraph.co.uk/news/2020/10/15/london-lockdown-tier-2-covid-rules/
Looking after your financial wellbeing, we outline tips below as taken from https://www.clearscore.com/learn/lifestyle/budgeting-tips-no-matter-what-your-financial-situation/.
How to budget if you don’t have a fixed income
If you’re getting paid sporadically, it’s naturally harder to budget since making a plan relies on you working with exact numbers. But it’s still possible to create a budget that works for your lifestyle.
Plan for your lowest income
The first thing to do is to plan for the lowest possible amount you could take home. Let’s call this your ‘bread budget’ - imagine how much money you’d need if you lived off bread and butter. Then, any extra cash you bring in will be a nice bonus.
Start by listing out the essentials you need to cover, such as food, bills and rent or mortgage payments. Write down how much these cost so you can be sure you have enough money to cover them. And try to make sure you know in advance if these costs are due to change, for example, if the government is increasing your council tax payments or you’re moving house.
If you’re struggling to meet your mortgage repayments, you have until 31 October 2020 to apply for a mortgage payment holiday. But this should be considered a last resort. Or if you’re renting, it’s always worth asking your landlord for a rent reduction. It’s at their discretion and while they may refuse, they might be more lenient during these challenging times.
Prepare for seasonal changes to your income
For example, if Christmas is typically a quieter time for you and your business, it makes sense to have enough money set aside to cover you if your income is lower than expected during this period. The last thing you want is to be caught off guard - this is where planning for the lowest possible income should come in handy.
Build an emergency fund
Next up: setting aside money for emergencies and unexpected costs. You never know when your boiler might give up or your car might need urgent repairs, so it’s best to have some money squirrelled away for times like these.
Generally, it’s recommended that you have enough savings to cover 6 months’ worth of expenses, but having 3 months’ worth is a good starting point. For example, if you’re freelancing and find yourself out of work for a few months, you’ll be grateful for this pot of cash to fall back on. Once you have enough savings to tide you over for 6 months, you can add any extra income to your ‘fun’ pot. Remember that having some money set aside for things you enjoy is still important.
When you’re building your emergency fund, consider putting it in a savings account so your money grows behind the scenes. We suggest looking for an easy access savings account with the highest interest rate possible, although these are becoming increasingly difficult to come by since interest rates dropped. Typically, the longer you put your money away for, the better the interest rate you’ll get, but you don’t want to tie up all of your money in case you need it at short notice.
It’s best to avoid investing your savings it as this involves risk, especially if you don’t have a lot of cash to play with at the end of the month. Don’t forget that big gains can quickly be counteracted with heavy losses which could see you losing your hard-earned cash.
How to budget when you have debts to pay off
If you’re in debt, paying this off should be a priority when creating your budget.
List out your debts
Start by making a list of all your debts and then choose a method to pay them off. The two main ones are:
- The debt snowball method: this is where you pay off your smaller debts first.
- The debt avalanche method: this is where you pay off your debts with the higher interest rates first.
Which approach you decide on is up to you. If it feels overwhelming, just take it step by step. The most important thing is having a plan that you can stick to, and that works with your budget. If you’re not sure where to start and need some motivation, take inspiration from a debt survivor (https://www.clearscore.com/learn/lifestyle/a-week-in-the-life-the-debt-survivor/) and learn about how he got back on track. Or if you’re really struggling, find out what help is out there for dealing with debt with our handy list of resources (some of which are free) - https://www.clearscore.com/learn/managing-money/-what-help-is-out-there-for-dealing-with-debt/.
Ways to slash your debt
One way to cut the debt you owe is with a debt consolidation loan. The idea is that you can lump all of your debts into one monthly payment with one single interest rate, making your outgoings easier to manage. Everything’s in one place and you’ll know exactly how much you’re repaying each month.
Another option is to take out a balance transfer card. This card lets you move your existing debt onto a new card and pay it off at a 0% interest rate for a period of time - particularly handy if your current interest rate is causing your debt to grow faster than you can repay it.
How to budget if you’re unemployed
If you’re newly unemployed, the first thing to do is to get acquainted with your new way of living. This might not be something you planned for and while it’s not an ideal situation, the sooner you come to terms with your new income, the better you’ll be at making your money go further.
Do the calculations
First thing’s first: it’s time to work out what money you do (or will) have coming in. For example, while you might not have a salary being paid into your account, you could be applying for Universal Credit, other unemployment benefits or borrowing money from family or friends to tide you over.
Don’t forget to apply for all the benefits available to you - every little helps, after all. There’s no shame in asking for help if you need it. Check this list of unemployment benefits if you’re not sure what’s out there: https://www.citizensadvice.org.uk/benefits/
If you’re worried about making ends meet with no income, is there any part time or temporary work you could take on? It doesn’t have to be relevant to the job you were doing before or want to pursue in the future - any experience is good experience, plus you might discover a hidden talent or new passion.
Slash your bills
A simple way to save money when you need it most is by assessing your outgoings and seeing where you could cut back or switch to a cheaper deal. There are potential savings around every corner, from switching your credit card to one with a lower APR (Annual Percentage Rate) to moving to a cheaper energy deal.
We’ve written a list of clever hacks to halve your energy bills (https://www.clearscore.com/learn/managing-money/how-to-halve-your-energy-bills/), and remember that if you’re having trouble making your card or loan repayments, you can still freeze these up until 31 October 2020 if you really need to.
Rethink your wants and your needs
Because of your change in lifestyle, some things you would have considered a ‘need’ before might now fall under the ‘want’ category. For instance, while you might have ‘needed’ your car while you were working, now that you’re unemployed it might be less important, especially if you’re no longer commuting. Reframing some of your needs as wants could save you a big chunk of money that you can dedicate towards your emergency fund instead.
And when it comes to shopping, remember, “it’s only a bargain if you’re looking for it”. If you regularly find yourself frittering money away, don’t worry, you can curb this in no time - just try our top tips for mindful spending (https://www.clearscore.com/learn/lifestyle/5-tips-on-mindful-spending/).
- The charity will consider providing small grants in immediate and urgent need.
- Provide advice to industry individuals regarding financial relief strategies and support services available to them.
- Provide support to employees worried about income, having to work and/or losing their employment.
- Strategies to implement immediately to soften the financial burden i.e. mortgage/rent holiday’s, freezing of gym memberships and others.
- Signposting to other welfare services and charities for support.
- Review of individual welfare benefits, your eligibility and support with the application process were necessary.
- Food vouchers if in immediate and urgent need.
Mental Health Support
- Self-isolation is likely to have a negative impact on our mental health and it is important we remain aware of this and try to buffer against it by putting support strategies in place. The EIC can recommend support strategies to help you cope through this time of isolation.
- Telephone and skype counselling are available to industry members.
- Psychiatric assessments for complex mental health issues are available to industry members.
- Signposting to other mental health support services and online services.
Symptoms, hygiene and self-isolation
- The EIC is recommending that individuals with pre-existing health conditions i.e. undergoing cancer treatment, heart disease, diabetes and others should self-isolated and managers need to be informed as soon as possible if you care for or reside with a family member or person who is deemed as having pre-existing health conditions. The EIC can provide further guidance to you if you feel unsure as to how to communicate this to your employer.
- Hygiene tips and resources
- Managing self-isolation
Very useful video link explaining the new Job Support Scheme – courtesy of Martin Lewis
• New Job Support Scheme starts on 1st November and runs for 6 months – no guidance for employers on how to apply yet.
• Must have been on Employer’s PAYE on or before 20th September 2020.
• You must work at least a THIRD of your normal hours and will be paid in full for these.
• For the hours you can’t work, the cost is usually split THREE ways – the state’s contribution is capped at just under £700 per month. Here the state pays a third, the employer a third and employee loses a third. Now it’s unknown as to whether the employer’s contribution will be capped.
• If you earn less than £38,000 per annum you won’t be affected by the cap and will get ¾ of your pay.
• Above £38,000 per annum and you will be affected – but the full picture is not yet clear.
This is the full link with current information – thanks to MSE News.
Self-Employment Income Support Scheme – Extended
Now extended with a 3rd and 4th Grant going through to April 2021.
Again, this is the link with full information on the income available and eligibility.
Bounce-back loans – help for small businesses and income support for those missing out elsewhere.
These are 100% state-backed loans up to £50,000 with no interest charged or repayments needed in first 12 months. Recent changes mean that you can now choose to extend repayment over 10 years. Applications have been extended to the end of November 2020.