How the Covid-19 outbreak could impact your finances?

While the main concern during the Covid-19 outbreak is saving as many lives as possible, many consumers are also concerned about the possible impact the virus could have on their personal finances. To help consumers protect their finances against the outbreak, we’ve taken a look at what the potential impacts will be.

At the moment, the Government has not made it obligatory for those under 70 or who are not high risk to stay in isolation unless they have Covid-19 symptoms. Saying this, it has not ruled out enforcing people to stay at home and, as such, consumers should start preparing for the financial implications if this does happen and they cannot work from home. What workers will be entitled to if they are told not to go into work and cannot work remotely will depend on their employment contract. Some might be given full pay, however some might require staff to take their annual leave while the workplace is closed. There is also the possibility that the contract will allow employment to be temporarily suspended, in which case employees are usually entitled to five days’ guaranteed pay only. The maximum available in guarantee pay is £29 a day for five days in any three-month period, and if the employee normally earns less than £29 a day they will get their normal daily rate.

The current Government guidelines for those who have Covid-19 symptoms is to stay at home for 14 days along with everyone else in the household. Workers forced to take sick days as a result could receive full pay depending on their employment contract. If employees are not eligible for full sick pay due to having Covid-19 symptoms, then they are entitled to Statutory Sick Pay (SSP), which the Government will pay from the first day the employee is sick. The SSP is £94.25 per week and can be paid for up to 28 weeks. 

A number of high street banks, including Royal Bank of Scotland, Lloyds and TSB, have announced that they will offer mortgage and loan repayment holidays to help their customers struggling financially due to the impact of the Covid-19 outbreak. As such, consumers who believe that they will struggle to make mortgage and loan repayments due to the pandemic should contact their bank as soon as possible to discuss potential options to ease the financial burden. Alternatively, consumers can also contact Citizen Advice for information and advice on what to do if they find themselves struggling financially due to the outbreak.

In an effort to help protect the UK’s economy from the Covid-19 outbreak, last week the Bank of England unexpectedly reduced base rate by 0.50% (50 base points) from 0.75% to 0.25%. At the time of writing, there is also the possibility that the base rate will be cut even further. For savers, this will have a negative impact as the market is already seeing providers starting to reduce saving rates in response to the base rate cut. Saying this, at the moment there are still some attractive savings rates available in the charts, however as events with Covid-19 are moving quickly, these rates cannot be guaranteed to remain for very long.