Aga Khan Economic Planning Board for the United Kingdom
(Last Updated: 31 March 2020)
The Aga Khan Economic Planning Board (AKEPB) has created the Savvy Saving column in the Al-Saha Daily Digest. This column is designed to provide financial planning tips including updates on government regulations and how they affect the Jamat during this time of the COVID-19 crisis. Please see below for all tips:
Shop around for the best interest rate
If you have money in a fixed rate savings account (an account that promises a fixed interest rate, if the investor agrees not to withdraw for a fixed period of time), there is usually a penalty for withdrawing money before the fixed period ends. However, some banks have agreed to allow access to money without charge, either through early access to or cancellation of the account. Check with your bank if you are able to withdraw money and under what conditions. Note: if you have a good interest rate, only withdraw if necessary. For more information, review the accessing money in savings accounts section on the Which? Website. If you are looking to put money into a savings account before interest rates change, visit MoneySavingsExpert for details of the best rates.
Selling items you no longer need
Use this time at home to do a “spring clean” and pick out things you no longer need which have monetary value. We suggest you consider selling these on eBay or other similar sites. Be sure to read and follow the procedures of each website closely to ensure transactions are completed correctly and securely. Stay safe and maintain social distancing even when the courier company comes to pick up the items you are selling. Click here for more information on how to sell goods on eBay.
Requesting help from your Local Council
If you believe that you are unable to make your council tax payments as a result of COVID-19, please reach out to your local council in advance of the payment date for guidance. The government has set up a hardship fund for English councils. Please click here for an overview.
If you are claiming Universal Credit, you may be able to get some help towards paying your local council tax. Please ensure you apply for a reduction at the time of your claim to your local council as payments are not typically backdated.
Postponing your rent
For those of us renters who have been impacted by COVID-19, if paying your monthly rent has become difficult, the government will ensure that you do not face the threat of eviction for at least three months. Legislation is being created so that landlords are not able to start proceedings to evict tenants for at least three months. As a starting point, speak to your landlord to see if you can work out a deferred payment plan explaining your individual circumstances. During this time, ensure that you are being careful with your finances and only spending on necessary items.
Postponing your mortgage payments
Some of us have experienced sudden changes in our employment and financial circumstances because of COVID-19. If meeting your monthly mortgage payments has become difficult as a result, the government has announced they are working with mortgage providers to provide support with options such as a three-month mortgage holiday. Please speak to your lender to understand if you are eligible, the measures available and the resulting change in your terms. Although a mortgage holiday could provide you with temporary relief, it will mean that your balance and payments could be higher than they were before the relief measure.
Managing your insurance policies
Use this time indoors to ensure that all your insurance policies are all paid and up to date. This includes your life insurance and critical health policies. If you have any upcoming trips or events understand what the cancellation terms are or what the insurance policy will cover. If you are unsure, reach out to your policy provider and get the full details. The Association of British Insurers has stated that COVID-19 should be covered by most providers, see details here.
Managing your utility bills
If you are struggling to pay your utility bills, the government has launched an emergency package with energy suppliers, for more information please click here. Reach out to your utility suppliers to discuss a payment plan that can work for you. As we remain indoors, we should remember to be sensible in usage of our utilities in order to control an increase in amounts owed.
Saving on your gym memberships
Exercising prudence with money is more crucial now more than ever. As gyms are temporarily closed, it would be prudent to check if you can freeze or cancel your membership. We also advise reflecting whether you really use your gym membership. If you don’t, it may make sense to let it go permanently. There are many free or subsidised exercise options available online, YouTube has a great selection.
Saving on your transport
In order to combat the spread of COVID-19, most of us will not be commuting to work for the foreseeable future. We suggest seeking a refund on your prepaid commuter transport passes. For example, you can find information on seeking refunds from the TFL website by clicking here.