Adulting - #59 Money In The Time Of Corona with Caroline Hughes

Episode Date: April 11, 2020

Hi Podulters, I’m coming to you with a special season of Adulting, specifically designed for our days in quarantine. In this first episode I speak to Caroline Hughes from Lifetise. I opened the floor to my Instagram audience, and asked them to ask me any questions about money worries they may have in this time and put them to Caroline. I hope you find it helpful, as always please do rate, review and subscribe! O Hosted on Acast. See acast.com/privacy for more information.

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Gambling problem? Call 1-866-531-2600. Or visit connectsontario.ca. Select games only. Guarantee void if platform or game outages occur. Guarantee requires play by at least one customer until jackpot is awarded. Or 11 p.m. Eastern. Restrictions apply. See full terms at canada.casino.fandu.com. Please play responsibly. Hey, Politers, I have a surprise for you. Usually, I would now take a break between seasons, but because we're all stuck inside with nowhere to go and maybe less to do, I have been recording a special quarantine season.

This first episode is with Caroline Hughes, who you may have heard from before in season four, I believe, with her episode, How to Get Your Shit Together. She is the co-founder of Life Ties, and she kind of knows all things when it comes to setting yourself up for those big next steps in life. So I asked my Instagram audience, you guys, if you were worried about money in the time of Corona and what you wanted to know. I then put these questions to Caroline and she answered them. So everything from what does it mean to be furloughed to should I go through with buying a house? We split it off into sections. And hopefully if you did submit a question, you'll find that it has been covered in this episode.

I'm really grateful to Caroline. She has so much knowledge that I couldn't possibly have explained to you guys because I had no idea about it before. So I do hope you find it helpful and enjoy. Bye. Hello and welcome to Adulting. This week I am joined by Caroline Hughes for a very special episode about money in the time of corona. Caroline has actually been on before. If you haven't listened to her episode yet, I recommend that you do that. It's called How to Get Your Shit Together. I think it was a couple of seasons ago. But for those of you who don't know you, Caroline, please could you tell us a little bit about who you are and what you do? Hi, everyone. Thanks very much, Aloni, for having me on the show again. So I am co-founder of a

company called Lifetize. And we are a financial technology company that helps people work out what to do with their money at each stage of their lives. So normally in the good times we help people figure out how to do things like buy a house or start a family but recently with everything that's been going on with coronavirus we've switched all of our focus to helping people work out what's going on with my financial situation and what happens if I lose my job or my pay goes down? Things like that. So, a lot of the questions that we're going to be covering today. Amazing. And I think it is so important to talk about money because obviously, the

main factor in what's going on is our physical health, which is so important. How we manage our finances and look after our financial well-being is probably second to that, to be honest. It's going to be such a huge change. So, with this in mind, I opened up questions to you a lot that follow me on Instagram and I got you to send in some questions. So, Caroline has split them up for us and we're going to go through them all. And Caroline probably will be answering them. I don't have any expertise in this area. I have learned a lot from Caroline, and I'm a bit better with my money now. So, are you happy with that, Caroline? Yeah, that sounds good to me.

Okay, perfect. So, we're going to start off with jobs and getting money in. So, this is for people who are employed and have a paid salary through PAYE. And the first question is, I've been furloughed and what does it mean for me? Now, I actually had to ask Matt yesterday what furloughing is. So, I might ask you to explain, Caroline, as well for people who aren't sure and answer the question. Yeah, it's been funny, isn't it? I think in the last few weeks, we've all had to learn quite a few new words and furlough is one of them. So, if I take a step back, what is the point of this furlough scheme? Well, it comes under

this government scheme that was announced a couple of weeks ago called the Job Retention Scheme. And the purpose of this scheme is to prevent mass redundancies. It's to try to help companies who might be struggling to keep their employees over the next three months whilst we work out what's going on with the economy. And so they can keep their employees. They don't have to make them redundant. And then what the furlough piece is, is if you're furloughed, you're effectively put on leave. So you're not working anymore. You're still employed by that company, but you're put on leave. So you don't do any more work, although you can do some training and some volunteering, I believe. But you're no longer working. You're basically at home. And it goes up to three months. And the way it works is that the government will reimburse your employer for 80% of your salary, up to a maximum of £2,500 a month. So, it's entirely designed to get your employer to keep you with the hope that after the three-month period, things will go back to normal,

you'll be able to just pick up your job and your salary will go back up to the normal rate. So, you will be getting 80% of your salary but capped at that £2,500 a month. It will be backdated to the 1st of March. If you were put on furlough at the beginning of March, it will be backdated till then. If you're put on furlough later than that, then it starts, three months starts from when you're actually put on furlough. And so there are kind of a couple of extra bits to think about this. For some people, you're going to be earning more than that £2,500 a month. So unfortunately, your wages are effectively going to go down. So if you're someone who earns more than £37,500 a month, you're going to be paid overall less.

Everybody else who's under that threshold will get paid the £2,500 a month. There's nothing compulsory for your employer to kind of top up that last 20%, but some of them might be willing to let you do extra work outside of your main job with somebody else if you really do need that 20%. So if your employer is not able to top you up, ask them if they'd be willing to let you do some freelance work if that's something that you could get alongside it, just so you're kind of getting your full salary. Amazing. That definitely makes it clear for me. And also you've just kind of, I guess, gone straight into the next question from someone, which was, I have two jobs and I've been furloughed from one. Can I keep the other? Which obviously, just then you said that you could take on a freelancing role, but I don't

know how that works in terms of if someone had two PAYE jobs, which perhaps is what this person is asking. Yeah. So, if you're split across two PAYE jobs and you're furloughed from one, your other one can just keep going. It's not impacted at all. If you have just one job at the moment under PAYE and you get furloughed from that, you can ask your employer if they will let you take on another job either as a freelancer or as an employee. So, there's nothing within the furlough scheme that would stop you, but your employment contract would normally say that you can't have another job. So, you would have to check with your employer before you do it. But if you've got two PAYE jobs, then being furloughed on one shouldn't affect the other.

And similarly, the other job, if they had to, could also furlough you under that. So, you would effectively be getting 80% of your salary under each of them. Okay. So, if you were furloughed from both, is it still under that 2.5k cap though? So, you couldn't have both salaries at 80% of 2.5k, would it still be capped? It should be. Each one dealt with separately. Now, we're still waiting for a lot of this sort of specific detail to be confirmed. But if you've got two jobs, then you should be furloughed under each one separately. But we're waiting for full confirmation on that. Okay, cool.

And the next question, again, is if I've been furloughed, should I be worried about redundancy? And now, again, an absolute novice when it comes to any of these terms, could you explain to me fully what redundancy means as well? Because I am freelance, self-employed for life and never know what anything means. Yeah, of course. So redundancy is where your company is struggling or they decide that your particular role is no longer required in the company. And so they let you go. And it's called redundancy. So it's different from being fired. Effectively, when you're fired, it's normally for performance reasons.

Redundancy is normally in a situation where the business is struggling. That's normally when they have to make multiple people redundant or where they change the direction of the company and no longer require a particular job to be done. So they're the kind of two main ways in which redundancy happens. Obviously, right now, we're looking at mass redundancies because it's the companies who are struggling financially. And so if you are looking at redundancy, if you are furloughed right now, what's happening is most companies are putting everyone straight onto a three month furlough. Now, the good news is that the government has built into its legislation the ability to increase that three month furlough period to say six months. They can go up to a maximum of six months without having to go back to Parliament.

So they've made it very easy to be able to kind of adjust that time period with the view that they don't want mass redundancies. They want to be able to pick up the economy once the worst of the coronavirus effects are over. So what I think is more likely to happen is that if it looks like this is going to extend beyond the three months, they'll basically just top up the scheme either to four, five or six months, and then everybody will be kept on furlough. I obviously can't guarantee that that's going to be a government policy. But keep in touch with your company and just say to them, look, are we going to be okay after these three months? It's really going to be kind of on a month to month basis, I think, as we go on from here. Okay, amazing. And when now we've got the next question, which is someone that has been made redundant, which I now understand.

Thank you for explaining so well. And what does that mean for that person in this current time? That is their question. So redundancy, the kind of threshold is, have you been working for your company for two years? If you haven't, then unfortunately, you don't have to be paid any statutory redundancy pay. But your employer in your employment contract could have said that if you're made redundant in any situation, they will pay you a certain proportion of your salary for a certain period of time. So if you're made redundant, then they will have to make that clear to you how much money they will pay you. If they're not paying you anything extra, which is normally kind of called enhanced redundancy pay, then you fall back on statutory redundancy pay and that's set by the government. And like I say, if you haven't worked there for two years, then unfortunately, you're not eligible for statutory redundancy pay. So if you're in that

situation and you're not able to get another job, then you're going to be looking at getting benefits to tide you over. And we'll come on and talk about those in a bit. If you have been working for your employer for a minimum of two years, then I'd advise looking up the government's statutory redundancy calculator. If you type that into Google, you'll go on the gov.uk website and you'll be able to work it out. Of course, your employer is going to do all of this for you, but it's quite helpful if you're kind of going through that redundancy process at the moment to have a look at the calculator to work out how much you're going to get. It comes down to two things. How long were you working for the company and what age were you when you were working there? And I know that seems really weird, but they kind of give you more if

you are older. I don't know why. I don't know if they, I think it's probably tied to the fact that generally if you're older, you're paid a higher salary. So the way that it works is you get half a week's pay for each full year that you were working there. If you were aged under 22, one week's pay for each full year, if you're between 22 and 41, and then one and a half weeks pay for each full year when you're 41 or over. Now that when you're listening to it, you're just going to be like, what? I can't calculate that. So go on the government calculator and see what it is. It's not a huge amount of money, right? That's what's very clear. Unless you've been working for somewhere for a very long time, it's not going to be a lot of money. So you are also going to have to top up your income

through benefits or trying to get some freelance work so we'll come on to talk about benefits in a minute I don't want people to panic about redundancy but I do want to say that if you have been made redundant since the coronavirus so essentially since the government announced its helping measures around sort of the 28th of Feb or the beginning of March, you can, in theory, ask your old employer to hire you back and to put you on furlough. So that is something that is open to you. So if you've been made redundant since, say, the beginning of March, and it's just because of the coronavirus effects, it is worth you talking to your employer about whether they would be willing to rehire you and put you on furlough instead of being redundant.

Okay, interesting. And this, again, also leads so neatly onto my next question from my audience, which is, I was due to start a new job in May, and my old job has let me go early. What can I do? And I guess that some of the things that you can go into more detail, which you're just discussing, would apply to this person as well in this kind of lull period. Completely. So, again, if your job has let you go and you were supposed to start another one, then you can ask your old employer if they would be willing to rehire you and put you on furlough until such time as your next job is due to start. Again, there's nothing that compels your old employer to do that. It's on an individual basis. They may be willing to do it. They may not. If they're not willing to do it, then you would be

looking at claiming benefits for that time period until your new job starts or potentially asking your new employer if they would be willing to hire you early and either put you on furlough for that first time period. So, you've kind of got two options, but it is going to be you speaking to your old employer and your new employer to see who can help you bridge that gap. I think that's such a helpful thing to know. I'm sure so many people will find that really, really useful. So moving now on to more my area of being self-employed. First question we have is, I'm a freelancer, all my work's dried up and I've got no money coming in after a couple more weeks. What can I do? It's really tough, I think, for self-employed people, particularly at the moment,

because the schemes that are available to self-employed, I particularly at the moment, because the schemes that are available to self-employed, I think are slightly less clear. And also as a self-employed person, everything is on you to figure out. And I just think that it's, it has been very hard. I think most of the questions that we've had in at Lifetize have been from self-employed people and freelancers just saying, help, what do I do? So we sympathize with everybody's financial situation at the moment. And if I can try and help make the self-employed help available more clear, I will try and do that. So it's a little bit complicated because there are different rules depending on whether you are freelance and self-employed through a limited company. You run your business, you've set up a limited company to run your business or whether you are a sole trader or you run your business through a partnership.

But I'm going to go through the ones who are sole trader because I think a lot of people who call themselves freelance will be sole traders. Now, good news for you. If you are a sole trader, then you kind of have something which is very similar to the job retention scheme that applies to you. And it is called the self-employed income support scheme or SIS. And similar to the job retention scheme, this is help that will pay you 80% of the profits that you've made over the last three years up to a maximum of £2,500 a month for three months. So you can see it's very, very similar in the way that they've structured it. But there is quite a lot of complexity around how it works. So it is a grant from the government. You will get it through HMRC. It's not available just yet. If you are eligible, it's going to be paid in a single lump sum in June, which is going to freak a lot of people out because,

I don't know about you, but March felt like the longest month in the entire known universe. We've only just got out of March. And then they're telling us that, okay, money's going to be available, but not until June. So I'll come on to talk about kind of like what you can do to get you through till June. But let's quickly talk about who's eligible for this self-employment income support scheme. You need to have made less than £50,000 in profits either in the last tax year, which is the 2018 to 2019 tax year, or as an average across the three previous tax years, which are the ones that run from 2016, 2017 through to 2018, 19. So this kind of brings up a couple of questions.

And I'm going to actually ask Anoni kind of like what her business was, because then we can make it a little bit more real for people. So Anoni, how long has your business been running? So I now have a company which I set up about six months ago, I think, but I've been freelance for just over two years. And I was a sole trader before that. And well, it's interesting, I saw this tweet, and it really made me laugh, because it was like the government obviously knows how self employment works, because we're really used to invoicing and then not getting paid for three months.

And that kind of cracked me up because I was like, to be honest, this doesn't feel too dissimilar to how my salary would come in anyway, because it's so lumpy. But I think I'm in a bit of a fortunate position in that whilst initially when this first started happening, I was really concerned because all the brands that I work with all have their budgets frozen because obviously they didn't know what was going to be happening. It's a really hard time for companies that I work with as well. But now going forwards,

it seems like digital and the kind of work that I do, which I guess could be classes entertainment as well, will still hopefully be bringing in an income because it's something which is possible to achieve throughout this time. So I'm probably one of the only really fortunate freelance people who feels like maybe I might still be able to hold on to my income as long as I keep creating. Use you as sort of an example for how the scheme would work. So if you've had a business for longer than the past year, then you might be eligible. So if you need to be eligible for this scheme and get this grant, 80% of your profits, you would have to have had a business in the tax year 2018-19 or before that. If you've only set up your freelance business in the last

year, then unfortunately you're not going to be eligible, which is going to be awful for a lot of people. So then you're going to have to look at benefits. So let's assume that you've had your business for at least over a year, you've run it just as a sole trader, and you've made less than 50,000 either in that single year or across the three-year time period. Then you have to look at how much does that income, how much those profits that you get from that self-employed business represent out of the total income. So if you're someone who's running your freelance business as a side hustle and you've also got a salary, to be able to get this grant, your self-employed income has to be more

than 50% of your total income. So if it's a side hustle and actually only represents 30% of your total income, then you're not going to be able to get this grant because they're going to look at it and go, well, actually it's not your main job, so you're not eligible. So there's kind of a two-stage process to this. And I've got a whole article that walks you through this on the Lifetize site. And I'll give the links to Anoni so she can put them in the show notes. You have to look back over three years and say, how much have I made? Is it less than 50k? Okay, great. And then you have to look at how much is that in terms of your total income and say,

is it more than 50%? If it is, then great, you might be eligible. So it's a little bit complex. And what I would say is, so there's no way to apply for this scheme yet. HMRC is going to go back through all of your self-assessments and look at who is eligible. And then they're going to tell you if you're eligible. And if you are eligible, then like I say, it's going to be paid in a lump sum in June. So you're going to tell you if you're eligible. And if you are eligible, then like I say, it's going to be paid in a lump sum in June. So, you're going to get all three months worth, so up to a maximum of £7,500 paid to you in June by HMRC straight into your bank account. Next question we have is slightly different. So, it's, I'm a contractor through a limited company,

what help can I get? Do they still get the same benefits or are they able to apply for it? Or is it a slightly different scenario then? Unfortunately not. So if you run your business through a limited company, this scheme does not apply to you. So for anybody who is a contractor, for anyone who has set up their business as a limited company, either so that they can pay themselves a mixture of salary and dividends, or for insurance reasons, for liability reasons, whatever your reason is for setting up as a limited company, that unfortunately takes you immediately out of the scheme. And so it's affecting quite a lot of

self-employed people, because there are tons of people who are kind of freelance in that sole trader sense. But there are also just like you and only tons of people who've set themselves up under a limited company who aren't going to be able to benefit from this. And so there's been quite a lot of lobbying of the government, quite a lot of kind of self-employed business groups who have been saying, hang on a second, that's not fair. Just because I've structured my company in this way, I should be able to get something. So, you know, it is a good job actually, and only that you're, you are still able to work through your limited company because otherwise you would be in a

slightly tricky situation. Wow, that's so interesting. I didn't actually know that at all. I hadn't seen that piece of information. And it's interesting as well, because I feel like you're really encouraged to set up a limited company, or at least I was. So it does seem that that's quite tricky. I wonder if, because am I right in thinking that this help for self-employed people got pushed through because of lobbying? Because initially they hadn't said anything really, as far as I was aware, to do with people who were self-employed and freelance. So, do you think that there is hopefully like at the end of the tunnel for people who are working from a loan to a company and don't have access to earning money at the minute?

Or is it too difficult to say? Yeah, it's really tricky. So, the way that the government has approached it, and I totally understand why they did this, was they looked at the workforce and they said, okay, so still most people are employed through bigger organisations. So let's deal with people who are employed, salaried through PAYE. It's also much easier to administer help for those people because the payroll is already set up. So it's very clear how much people are earning month to month. There's no kind of up and down in the same way that there is, like you call it lumpy, the kind of roller coaster that most self-employed people have. Most salaried people are just paid the same amount every month. So it's an easier scheme to

roll out. And then there was a ton of pressure put on the government from self-employed people saying, hang on, there's what, 5 million of us. And we're encouraged, you know, so many people are encouraged now to become self-employed. What are you going to do for us? And in fairness, it's a harder thing to work out. How do we structure that for self-employed people who do have these uneven earnings, who might be earning a lot more in one year to next? How do we kind of structure that and make it fair? And it's arbitrary. The way they've designed the scheme is entirely arbitrary. They've just had to draw lines around it. And so some people fall within it and some people fall out. What I would say, if you do have a limited company, all is not entirely lost.

If you run your business through a limited company and you pay yourself a salary and you don't need to work at the moment because effectively all of your client work has dried up, then you could use the job retention scheme and effectively put yourself on furlough. And so that would allow you to pay yourself the 80 percent of your salary bit for the three months, just as if you were any other salaried employee under PAYE. Now, that's probably only going to provide a limited amount of help because most people who set up a limited company pay themselves the bulk of their income through dividends and not through PAYE. But it's something. And I think if you're facing no income for the next three months, then I would be looking at furloughing yourself, paying yourself through PAYE, that 80% of whatever that PAYE amount is, and then looking at what benefits

you could get to top yourself up. Interesting to hear that you could follow yourself. It sounds really complicated though, but it's really good to know. I feel like I'm learning a lot. So when we move beyond this, the next step, I guess, what we'd be talking about is benefits. And with the questions that I've got from that angle are what benefits could I get and how much are they, which I feel like you've kind of touched on a little bit, but we can go into more detail what they your chance at the number one feeling, winning. Which beats even the 27th best feeling, saying I do. Who wants this last parachute? I do.

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life. And this is going to be very foreign to you. What I would say is that the numbers show that over a million people have now claimed universal credit over the past few weeks. So if this is you looking at what do I do? How do I claim you are amongst a million other people who are also in the situation trying to figure out what they can get. Now, the benefit system is one of the most complex financial things I have ever had to look at in my life. So if you are listening to this thinking, I don't know where to start, this is freaking me out, I have no way of knowing what to do, the best place I can direct you, and again, we'll put this in the show notes, is an organization called Entitled To has a brilliant benefits calculator. And that would

be the place that I would start. So instead of me kind of reeling off here how much you could get for different types of benefits, go through the benefits calculator that they have on their website, because it will be specific to your situation. It will help you kind of direct yourself to the right resources. So I'll just touch briefly on the main one that most people are going to be getting, which is universal credit. It is the government's way of taking all of the old style benefits that we had, which were many different types, and parceling them up under one package. For most people who are earning decent wages, universal credit is not going to be as much as you are used to getting. So I think, and I know we're going to go on to talk about,

you know, this is all how can I get money in to tide me over for the next three months this i think we're going to come on next to talk about what can i do about dealing with the money that i have going out and reducing my living costs because if you are getting benefits the likelihood is that it might not cover everything that you need it to particularly if you're living somewhere expensive like london and you have expensive rates and rents to pay. But the entitled to calculator is brilliant. It's super simple to use. It will walk you through the process. And then if you do come out at the end of that and it says, okay, you are eligible for universal credit, I would strongly recommend that you apply via their website. If you try to get through on one of the helplines, it's going to take you days

just because there are so many people who are applying. The main things to know about universal credit is on average, it takes five weeks for your application to be processed. Again, that's going to seem like a very long time, but you can ask for an advance payment to be made, which is where the government will basically give you an advance payment of what you would be entitled to. And that can be paid very, very quickly, usually within a couple of days of you providing your identity documents to the government. So that five-week timeframe looks very daunting if you've got no money right now, but usually that can be made like a week or two quicker by this advance payment. So, as you put in your application, they'll then get back to you and then you say, I want the advance payment to be made. Okay. And it's going to be really fun, as you said, to some people.

And I think it's also good to point out that it's not a thing of pride or anything. I do think people are going to struggle maybe psychologically with benefits because it feels so different. But I think that we've got to realize, first of all, it shows how much our benefit system needs to be improved because obviously the money, the amount that you get a lot of the time really isn't enough to live off or to live a good life off. And also that it is a very strange time where you are entitled to those benefits. So don't feel too proud to ask for help because at this moment in time, it's really uncharted waters for a lot of people. So I think that might be the kind of psychological thing behind money at the minute

is that it's really anxiety-inducing. So don't let that be another burden where you feel like you put a barrier up against um claiming benefits I don't know if that sort of makes sense massively I think I mean I think just generally like you said at the beginning opening of this episode second to health concerns financial concerns obviously are going to be like the biggest thing for most of us we've we've been hit by this sort of tsunami and it's the word unprecedented is right. Like we haven't been through anything like this. I think one of the questions that somebody asked was, how is this different from the financial crisis of 2008? It's completely different. There's actually

no real structural problems within the economy. We just had to put our economy on pause for three months whilst we try to get a pandemic under control. None of us have lived through this. I was talking to my co-founder and partner, Nick. His grandmother is 100 years old. She's going to be 101 next month. And she lived through the Spanish flu. But there's nobody else we know who's lived through anything like this. So everyone has to be super kind to themselves. And yeah, there's no shame around being in the situation. There's no shame around worrying about how am I going to pay rent? Everybody has to just do what they can right now. But in a spirit of understanding that everybody is in the same position. And that's why I brought up the fact that there's a million people who have claimed benefits in the last two weeks. That's extraordinary.

So it's not any individual's thing. It's collective. And we all have to get through it. And like I say, we're doing our best to try and make as much info available. We're actually building tools that will help walk you through all of these processes because we understand that it is so overwhelming. Like even listening to this, people are gonna be like, I don't know what to do with this. So we're actually also offering free health checks

for people if you want to kind of have a one-to-one thing where we'll walk you through it because it's massively overwhelming and it's massively scary and it's massively stressful. Yeah, that's amazing. I think what you're doing is so crucial at the minute. So I'm so grateful that you were able to come and talk on here with me about it as well. So when we're moving on now from that, as you said, like how to get your money in, now we're going to talk about help with costs and making payments, which I know is a big worry,

especially for renters, et cetera, that we'll come on to that. So, the first question we have from someone is that they're struggling to pay their mortgage. So, how do we advise on this in this climate? Okay. Some good news for mortgage holders. So, the banks were told by the government that they had to make things okay. They had to provide some support for people who are struggling to pay mortgages. Because of course, you can't suddenly put a scheme in that says, okay, people will get furloughed and put on leave and only be paid 80% of their salary and then not have any equivalent measures put in place for people's costs. So the banks have been really good. They are willing to give payment holidays so you can effectively put your mortgage payments on hold for three months or they will reduce the

amount of your mortgage payment over that same time period. Now again, their phone lines are incredibly busy so they're encouraging people to look at their websites to see what help is available. And some of it will only start filtering through in the next sort of few weeks. So you might have to be a little bit patient on that. But that is good news. So if you are genuinely in a situation where you're looking at it going, I don't know what to do, I'm not gonna be able to pay my mortgage, you can choose to take a mortgage payment holiday. Now, the one thing I do need to point out is they are not saying that they are just going to write off that money for three months. You still have to pay it back. So what will probably happen, and again, each bank is working out how to do it, but they will add that total amount of the three months holiday to the total that you still owe. So what that will do, the effect of that is that unfortunately, you're going to still have to pay interest on that total amount. So for most people, it is going to mean that the total that you pay for your mortgage over the remaining 15 years, 20 years, 25 years will be more. So you could end up paying a total of a few thousand pounds more for your mortgage over the lifetime of it.

But if you're in a situation where you don't have any other choice, then you're effectively going to be pushing it back towards the end of your mortgage. And you're better off taking that mortgage payment holiday now so that you can afford to eat so that you're not freaking out. It's it's not I wouldn't take the mortgage payment holiday if you're not struggling. Don't take it just to kind of push it back. But if you are struggling, then take that mortgage payment holiday to give you that breathing space. Oh, sorry, I've missed a question. I'll go back. The next question, sorry, isn't about renting. It's about, I'm about to buy a house. Should I continue? What would you say to that? So, that's an interesting one. Okay. So, it depends kind of where you're at in the process.

And the best thing that you can do is if you already have a mortgage offer from your bank, speak to them about what they want you to do. So, some of them are kind of pushing back people's completion dates by three months and saying that they won't necessarily make those mortgage funds available to you simply because they don't want people to be actually doing during the next three months. And so, the banks are kind of reflecting that and not necessarily releasing mortgage funds. So, if you're in a position where you've got a mortgage offer, you've kind of done most of your paperwork and now you're just waiting to complete and actually move house, please speak to your mortgage provider to check that they are willing to release funds for you so that you can actually do the final bits. If you are in the earlier stage of the process where you're effectively applying for mortgages, then again, speak to your mortgage broker or speak to

the banks because a lot of them have tightened up their lending criteria. So, whereas they might have been prepared to lend to you on a 10% deposit, now they might only be willing to lend to people who have got a 25% deposit. So, because we're in this kind of state of flux, you're going to need to speak to either the mortgage lender who's already kind of approved you or speak to your mortgage broker about what is actually available right now because a lot has changed over the last few weeks in terms of what mortgages are available. But for those people who aren't in the position where they own their property and are struggling to pay rent, which was my first worry when this all first was happening, but hopefully I've got everything under control. What do you suggest for people in that position?

Okay. So, I mean, it's tricky and I'm in that position too just so you know so I looked at it and went oh no I'm also I have to pay for our startup I'm also a freelancer so a lot of these things that I've been talking about I worked out how to do because I was in exactly that position and and having a little panic moment for a couple of weeks if you are renting then you're going to need to speak to your landlord about can they either reduce your rent or can they give you the same type of payment holiday for the next three months? Now, given that some landlords are going to be able to take a mortgage payment holiday, I would hope that they would be willing to do this for you. But it is going to be come down to

an individual negotiation with your landlord. And I know for a lot of us, that feels quite scary to have to do that. So again, on our website, I have created a template email or letter that you can send to your landlord. You just put in your details, send it to your landlord to ask them for either a rent reduction or a payment holiday. Now, what happens if they don't agree to that? And I think one of the questions that came through said that somebody had asked their landlord for just even like a 15% reduction and the landlord had said no. Okay. Ultimately, if you are unable to pay your rent or are unable to pay all of your rent, please do not panic because right now you are not able to be evicted for the next three months. So even if your landlord gave you

notice of eviction, they wouldn't be able to remove you from the property for three months. Now, even the idea of eviction sounds terrifying and none of us want to be in a situation where we're even worried about it. But I do us want to be in a situation where we're even worried about it. But I do just want to tell people that kind of worst case scenario, you don't pay your rent, your landlord threatens eviction, they can't actually get you out for three months. So you are protected in these worst case scenario situations. And I kind of want to say that because I want you to know that you are not asking for something unreasonable if you're asking for a rent reduction. So speak to your landlord, ask them if they're taking that

mortgage payment holiday, ask them if they're taking a mortgage reduction, and then ask them to reflect the same thing for you. If they say no, then part of the universal credit benefits package that is available is help with rent costs. So as you're going through that benefits calculator, it should show you what you might be able to get in terms of payment towards your rent. And then finally, local authorities. So your local council have been given money to help people in hardship. So get in touch with them, tell them that you're struggling to pay your rent and it applies equally to other bills and things and see what they are making available to you. So, that's your local council that you should be getting in touch with.

Okay, great. So, it's really good to know that there are options available and that we won't just kind of be left out in the lurch. And the next question then going forward is, what else can I do to cut my costs and this is something that I started thinking about almost straight away and actually one kind of positive thing that I did that kind of made me feel a bit more settled was I was figuring out what costs I just wouldn't have to be spending so you know going travel I probably spent about six pounds a day going around on travel eating out it's in a funny way it kind of made me feel more positive to figure out the cost that I simply wouldn't have to be spending and adding that up and figuring out what I was saving almost automatically by virtue of being in this locked in situation. But I'm sure that Caroline can offer

some much more useful tips than that. But that was kind of just one positive activity that I did that made me feel a bit less stressed. I think that's a really good starting place because like you say, it makes you feel better. Um, and I felt really weird. Like I did the whole, this whole slides and, uh, put together and I said, look, you're actually in many ways going to save some money cause you're not going out and say that's both good and then depressing because you don't get to go out. But I think it's, I think doing that exercise of, okay, here's all the discretionary stuff that I normally spend. And now I don't have to spend that makes you feel like, okay, so I'm not just looking at all of my money going out and none coming in. So I think that's a really, really good starting point. And then there are other

things. So cancel any subscriptions or any things that you prepay for that you can cancel. So whether that's things like travel costs. So if you pay for a monthly or an annual rail ticket or travel card or whatever it might be, see what refund you can get on that because that's money straight in. Similarly, if you have childcare costs, speak to your childcare provider about if you can get on that because that's money straight in. Similarly, if you have childcare costs, speak to your childcare provider about if you can get a refund because for most people, after housing costs, childcare is the next biggest one that they have. So definitely worth speaking and finding out if you can get any money back on that. And then any other subscriptions, gym membership, anything that you're not going to be able to do in the next few months, cancel it. Find out if they have like exit charges, sure.

But if it's worth it, then get that money in because it's going to make you feel better having some sort of buffer. I think that's such helpful, useful tips. It's just racking my brain to try and think of anything that I can cancel subscription-wise but I can't even think now. I'm notoriously bad for signing up for free trials and not remembering them until I suddenly see it going out of my account and I think what is that? So that is an activity which I might actually do this weekend and just go through everything that's coming out. So then the next thing forward apart from cutting costs is then help with debt. So money that is already gone, I guess. So what could someone do about that overdraft in this time? So overdrafts are an interesting one because we were supposed to have new rules that came in

in two days time, which basically made overdrafts the most expensive form of debt that you could have. Again, in the way that these things work, they tried to make the interest rates that applied to overdrafts simpler, but all it meant was that banks bumped them up to like 40%. So they were suddenly going to interest rates on overdrafts was suddenly going to be double what you would pay on a credit card. And so that was supposed to kick in in two days time. So anyone who regularly goes in that overdraft and then over that overdraft, you need to check what your bank is doing for overdrafts because you do not want to hit this 40% interest rate. Most banks, most of the high street banks are giving people overdraft extensions. So they're

giving you maybe an extra 300 pounds on your overdraft to give you a buffer. So please do double check with your bank what they're making available. It should all be online for you to find out. You shouldn't necessarily have to apply for it, but double check if you do, because you do not want to be going in over your overdraft at this time, just in case those 40% charges apply. So look at what you can get. If your bank isn't offering anything, get in touch with them and say, look, I need to extend my overdraft by £300, £500 just for the next three months, so that you've got that buffer to play with. Oh my gosh, that's terrifying. When I was at uni, I constantly would be in my overdraft,

and then I got overdraft charges for being on my overdraft, and it was just like a never-ending spiral, and it was the like a never-ending spiral. And it was the worst, worst thing ever. So that sounds awful. I can't believe they've done that. But hopefully, people will be able to manage that with that knowledge. And the next question is, what should I do about credit card debt? I don't actually have a credit card.

So I have no idea on this one. Wow, you're good to not have a credit card. I sort of run my life through them. Okay, if you have credit cards and you can keep affording to pay it, great. Again, most banks, and you'll need to check this with your individual bank, are saying that they're not going to apply interest on missed payments or late payments. So again, they're trying to do what's best and give people a little bit of breathing space on credit cards. But again, because credit card interest rates are usually some of the highest, around sort of 18%, 20%, you do definitely need to check with your provider what they are doing in terms of kind of giving you this slight holiday or relaxation of the rules because you don't want to get in a situation where it gets out of control for you. So yeah,

double check with them. Most of them are being sensible. Most of them are giving these kind of little breaks on things to give you that breathing space. But please do double check. One thing that we haven't talked about is for some people, if your credit score is good enough, you might be able to get a 0% credit card still even at the moment, which would be a way for you to get some money in or to be able to pay for things right now and then pay it off further down the line. Because some of them will give you, say, 12 months interest free or even up to 24 months interest-free. So for some people, being able to get a 0% credit card and then you use that to pay all of your expenses for the next three months and then pay that off over the remaining nine months or 18 months or whatever it might be, would be a good thing for you. So don't rule out getting yourself a 0% credit card if you know that your income is going to pick up further down the line, if you're confident that you will be able to pay

it back later on. Some of them allow you to actually withdraw money and effectively what I call downloading money from your credit card into your bank account up to a certain limit that then could be money that you use to pay for your rent, to pay for your food, to pay for various things. But only do that if you know that you'd then be able to make the repayments on that within whatever the time period is that it remains at 0% so that you're never charged interest on it. But effectively, if you can do that, it becomes a 0% loan for you over a 12-month or a 24-month period, which could be really helpful for you right now. Wow, that's really good to know.

I kind of want to ask you, in terms of credit rating at the minute, obviously, with everything that's going on, everyone's finances are going to be so different. Will the credit scoring system still be in play in the same way that it is? Because I can imagine that a lot of us with money not coming in as much, maybe people not being able to make payments and mortgage payments being frozen and stuff. How will that impact credit score? Is that a bit of a really tricky question? Don't worry if that's not something that you've spoken about. So honestly, I have absolutely no idea. And to be more honest, I don't think the credit scoring agencies would know how to do this because these are not normal times. So again, anyone worrying about your credit score, I would just say, please try not to worry about it because I don't think anybody on the outside or the inside of the credit scoring agencies

knows how to deal with this. Like I say, with the banks doing the right thing and giving people payment holidays or breaks on kind of interest repayments and skipped payments and what have you, I'm really hopeful that it's not going to impact people's credit scores. But right now, who knows? Yeah, that does seem like I'd never really look at my credit score, to be fair. That's another thing that I don't think about. But that actually brings me on to what I want to say, which was in this time when I think a lot of us probably do have a bit more free time than we usually would and maybe feel like we're swimming with free time. I think it is actually a really good moment

to sit down with your finances and really get to know them. I've only just started doing this in the last year or have a long, and I really used to bury my head in the sand when it came to finances. But I think at this moment in time, one, you're kind of forced

into becoming more familiar with it, but you have actually got that time to sit down and go through all of your subscriptions, really see what your spending is. And actually, it can be a really enjoyable exercise because it's such like a tick box thing. I actually quite like doing it. But even if it seems daunting, I would actually use this as a moment to try and in a positive way, get to grips with your money and finances because feeling in control of something right now, I think can make you feel a lot better about the situation I think sometimes the feeling of feeling out of

control with our money is where the anxiety comes from rather than even how much we're earning it's more the not feeling too certain yeah I think that's right I think it's you know I don't normally like the word empowered but I think like you say, anything that we can do for ourselves right now, we can almost try and turn it into a form of self-care, right? It's how do I, and you can do it little by little. And understanding that the overwhelm and the anxiety is going to make some of it feel not nice, but the bits that you can do. So I think your point of starting with those subscriptions, starting with the things that are going to bring money in is a really lovely way of doing it, because you are going to get a sense of achievement and you've got some like mastery and control over it. And I think that is the way to start. Don't start with the, oh, my word, how is it going to affect my credit score?

Because that's kind of out of your hands. So look at the bits which you can control. And as I said, if anybody does need help, Anoni can point you in our direction. And we're very happy to kind of look at stuff one-on-one. We're not financial advisors, so we can't advise around things like pensions or investments, but we can definitely help you look at, guide you through what help is available to you, where you should look for things, and the order in which you can tackle things to feel better about it. Amazing. Yeah. Thank you so much for coming on to the podcast and talking about this. I hope that everyone will find it really useful. I definitely feel like I've learned so much.

But as you say, it's sometimes quite hard to digest it all. So if people want to come and find you, Lifetize and what you do, et. If you want to tell us where to find you on Instagram and wherever else. And then I'll also put those links to the things that you mentioned throughout the podcast in the show notes as well for people to do further reading if they want to. Perfect. So we've got so we are Lifetize.com. That's L-I-F-E-T-I-S-E. And then we are at Lifetize on every social channel that you can find. I've actually put together some little videos talking through some of these things that have visuals. So if people want to look at those, you can go onto our Instagram and putting them up on IGTV. So sometimes just having like the slides, which explain some of these things as you're

listening would also help. And like I say, if people want to get in touch they can just email hello at lifetimes.com and we'd be very happy to help them amazing thank you so much Caroline and thank you everyone to listening I hope this makes you feel a bit more comfortable with how to deal with your money in the time of corona and I will see you next week. Thank you. Bye. FanDuel Casino's exclusive live dealer studio has your chance at the number one feeling, winning, which beats even the 27th best feeling, saying I do. Who wants this last parachute? I do. Enjoy the number one feeling, winning, in an exciting live dealer studio,

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