Financial impact of Covid

How we're supporting our members through the Covid-19 pandemic.

These past few weeks, the whole team at Bristol Credit Union have been focused on how we can best support our members through the Covid-19 pandemic. Continuous changes of government announcements in relation to financial aid can make things confusing, particularly for those who are at the struggling end of the wealth spectrum. So what can you do if you find yourself under financial constraints?

Protect your credit score

Credit scores might not be the first thing on your mind at this time but it’s an important topic. A poor credit score could hold you back from applying for a credit card, or a mortgage in the future, therefore try to protect it as much as possible. If you have a loan that you know you won’t be able to make a payment on, talk to your lender in advance.

You may be able to come to an arrangement to tide you over, for example they may allow a certain period of deferred payments (although beware that interest rates will likely still apply). That said, you will still benefit from not exposing yourself to the extra interest that’s likely from having a higher balance for longer than expected.

If possible, pay back some of your monthly debts, even if it isn’t the full amount - a small sum is better than nothing and will help to reduce the amount that you are paying in interest.
But again, do talk to your lender first so they can agree the arrangement.

Ultimately though, protecting your credit score has to be less important than keeping a roof over your head and keeping you and your family fed and well.

Help with housing

Housing can also become an issue if you are struggling with rent or mortgage payments. Universal Credit is the benefit to apply for to help with living costs and is currently paid monthly in England. It’s a quick check to see if you are eligible for Universal Credit.

Rent needs paying unless you can talk to your landlord about deferring rent payment for a set period of time. At the start of April, Universal Credit applications had increased by one million, proving what a vital resource it is during the pandemic. The good news is that evictions are currently suspended so there is opportunity to find a solution to your rental arrears. Similarly, if you are not coping with mortgage payments, you can speak to your lender about a mortgage holiday. If you need help with applying for council housing schemes, our branch is currently open by appointment only, to help members with paperwork.

Universal Credit is a passport to other financial aid

What many people don’t realise is that if you are receiving Universal Credit, this is like a passport to help with other key costs you may have. This means that you may need to be receiving Universal Credit to be eligible for other benefits.

If possible, apply for Universal Credit as early as possible as there is a 5 week period before this benefit can be received, as well as any further delays that might come about due to the recent increase in the number of Universal Credit applications.

I have noticed that one of the many impacts of lockdown is that, with children at home, some of our members are struggling to deal with the extra costs this has brought, such as the food bill, energy use and so on. Free school meals are still being provided to those in need in the form of vouchers, and although it’s had mixed results, this can help to stretch finances.

We are here to help everyone; and judging by the activity in our members’ transactions and borrowing, the Covid-19 crisis is impacting the most on those who were already in the most difficult circumstances.
Adding to the anxiety of health concerns, many people in our city region are suffering more than you know. We’ve helped many of our borrowers with direct support through payment holidays or reductions, having reached out to borrowers over a week before most banks started offering any support. We did that because it’s just the right thing to do to support our neighbours, friends and communities at this time. At BCU, we are here and ready to support with impartial assistance for all who need it.

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Posted on
07 May 2020