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A third of households have seen a cut in income due to coronavirus crisis

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21/04/2020
One in 10 are worried about being able to meet their mortgage repayments or rent
A third of households have seen a cut in income due to coronavirus crisis

A third of UK households have seen their income cut as a result of Covid-19, according to GoCompare.

And 15% have experienced a severe drop in their finances.

The price comparison site found that over nine million households are having to make do with less money coming in.

Worrying, 10% of households are concerned about paying their mortgage or rent, 8% are having to use a credit card to pay for essentials and an estimated two million households are seriously worried about their financial future.

Help is available

GoCompare is urging people to talk to their lender, bank, landlord and credit card provider and take steps to reduce outgoings.

While the UK government has put in place measures to help those affected, many people haven’t sought help either because they didn’t know they could ask or because they don’t believe banks, lenders, landlords or utility providers will help them.

Only around 20% of struggling households have requested or received payment holidays or an overdraft buffer.

Worryingly, two in five (40%) said they hadn’t been in contact with their lender or landlord because they didn’t know they could ask for help or didn’t think help would be forthcoming.

What to do

If you are experiencing financial difficulties, take action as soon as possible, said GoCompare:

  • Draw up a budget based on your new income and outgoings and stick to it;
  • Talk to your mortgage provider or landlord as soon as possible to agree on a payment holiday or new repayment plan;
  • Shop-around for a better deal for essential services and insurance such as energy, car and home insurance;
  • Talk to your bank about an agreed overdraft and an interest-free overdraft buffer;
  • Talk to your credit card, loan or car finance provider to see what help is available in terms of a payment holiday or a new repayment plan;
  • The government has made it easier for people to access benefits and claim sick pay. Check what benefits you could be entitled to.

Lee Griffin, CEO of GoCompare, said: “If you’re struggling with your finances now or think you will soon, don’t ignore the problem in the hope it will go away. Check to see what benefits you are entitled to and find out how to access them and if you’re having difficulty in making payments or repaying loans, contact the relevant organisation as soon as possible to make more affordable arrangements.

“And don’t forget that you can take control of your outgoings too. For example, never let existing contracts for things like car insurance, home insurance, energy or broadband renew without first seeing if you can get a better deal elsewhere.”

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