Moolr.co.uk | Short term loans

How The Finance World Reacted To Coronavirus.

When we examine how the finance world reacted to coronavirus, we are dealing with a broad church. There are so many aspects to how the pandemic has affected us all and the companies we use, that you could write a book on the topic. But the situation still allows us to take a brief look at what happened in the finance world. They had to react quickly as countries began to shut down, and the ability of borrowers to make repayments was greatly reduced or even eradicated.

How The Finance World Reacted To Coronavirus. – Workers

The government announced that self-employed workers will get 80% of their average profits over the past three years, up to £2,500 per month. The government opened the scheme to anyone who earns £50,000 or less, and will be rolled out by June at the latest. You will be eligible to apply if you have less than three years of tax returns, but if you’ve just become self-employed you’ll have to apply for help through Universal Credit, which the chancellor Rishi Sunak claims he will expand. Many applicants report very long delays however. Perhaps we should expect this, as the system strains under the unique situation.

Employees

The government is to pay 80% of the wages of employees not working due to the impact of the coronavirus on their employer, up to £2,500 a month. The way the gothis will be implemented is that the employer will apply for the funds on behalf of their workers. It is hoped this will prevent redundancies as companies “furlough” employees instead. However, feedback from many who have tried to apply for funds suggests this process is not as straight-forward as many would have hoped. Many caveats remain.

How The Finance World Reacted To Coronavirus – Businesses

Pubs and restaurants closed at the end of 20 March. Theatres, cinemas, gyms and leisure centres told to close as soon as they reasonably could. As of the end of March, they are all closed. Naturally to survive, they will seen the government assistance to cover wages. But for many the closures will have fatal repercussions for their businesses. Many restaurants have reinvented themselves as takeaways. However, for the likes of pubs and gyms, there is nothing they can do but close.

Borrowers

The government announced a three-month mortgage holiday for those in financial difficulty due to the pandemic. If customers are concerned about their situation and have yet to hear from their lender, they should initiate contact. The FCA enforced this week payment holidays for all types of lenders. This applies to mortgages, to loans, to credit cards. The first £500 of overdrafts must also be interest-free. These rules should run for 3 months at least, commencing on 9th April.

How The Finance World Reacted To Coronavirus. – Mortgages

The government has announced that mortgage holders who are struggling to make their monthly payments will be entitled to a three-month payments holiday. However, each lender is deciding how to implement the scheme. Customers who want more information are urged to contact their lender direct. The three-month holiday could take two forms, depending on the lender. Either the lenders free payments, and you carry on after the freeze ends, with the same amount repayable, or during the freeze, interest is still accrued. For the latter option, this means that future mortgage payments will increase to make up for the shortfall. The latter option is what most lenders will offer to consumers.

Banking

The Bank of England base rate has fallen from 0.25% to 0.1% (it was 0.75% before the Budget on 11 March). This will lead to a reduction in mortgage payments for many. Notably, those on tracker and variable rate mortgages but not those on fixed deals. The bank will continue to react to the ongoing global crisis. They may announce further cuts therefore in the future. 

Resident Rights

The government is bringing forward legislation to prevent private tenants being evicted if they fall behind with rent as a result of the crisis. In a similar vein, housing association tenants affected by the crisis will not be evicted if they fall behind with rent. The government is working with energy suppliers to ensure pre-payment and pay-as-you-go customers remain on supply.

  No Obligation Application