How to manage on a reduced salary during the coronavirus crisis

Workers across the country have found their pockets hit by the coronavirus crisis. This guide will help you save money and manage your budget with less cash coming in.
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As things change rapidly during the coronavirus (COVID-19) crisis, this guide will be updated regularly to reflect changes in rules and regulations.


In times of financial difficulty, it is important to make cuts where you can. Even during the coronavirus crisis, you can still make sure you are not overpaying on services like energy, mobile and broadband. A simple switch can save you hundreds of pounds over a year.

Keep energy bills down

Check your energy contract to ensure you're not on a standard variable rate. Fixed plans can save you money and give you the security of knowing how much you'll pay. 

Don't be brand loyal — switching to another energy supplier can save you money and your service won't get interrupted.

Check the latest energy deals

Get the right mobile package

Check your phone contract. Many people are sitting on deals that are out of contract and paying more than they need to for their current data package. 

If you're working from home you may not need as much mobile data. Speak to your existing provider and find out what they can offer you. Run a quick comparison to see if the deal you’ve been offered is good value for money and then you can make an informed decision.

Check the latest mobile deals here

Look for the best broadband deal

As working from home becomes routine, it is important that you have a broadband deal that matches your own individual needs. Superfast broadband with speeds of up to 50Mbs are now available to 95% of the country, and usually only cost little more than a regular connection. 

Check the latest broadband deals

If you are out of contract on your broadband deal, you could actually save money and get a faster deal too.

If you’re in trouble, ask for help

Many providers are offering payment breaks and tariff changes to help customers struggling to meet bills.

Some, including Thames Water, are even offering grants to households with outstanding bills from previous years

Rent and Mortgages

Do I still have to pay my mortgage?

Yes, but many banks are allowing customers to go on a mortgage payment holiday. Take a look at our mortgage payment holiday guide to learn more.

Do I still need to pay my rent?

Yes, but if you are a tenant in social or private accommodation struggling to pay your rent due to coronavirus then you can speak to your landlord about a payment holiday.

If your landlord has a buy-to-let mortgage they can arrange a payment holiday with their lender. This saving can then be passed on by pausing your rent for a fixed period of time.


Saving money on pay TV

Even if you have recently found yourself with a lot more time on your hands, there is still thousands of hours of TV to keep you occupied without hefty subscriptions. 

Check services like Now TV, Disney+ and Amazon Prime Video for free trials and All4 and iPlayer for movies and TV shows included in the cost of your TV licence.

Do I still need to pay for sports channels?

With most sports in the UK postponed, there is little reason to be splashing out on expensive TV subscriptions. Contact your provider to see if you can pause your payments or get money back. 

Both Sky and Virgin Media are offering sports customers the chance to pause their payments, while BT are offering a credit on future bills.


Check if you’re paying interest on debt

Paying interest on debt is one way many people spend money when they don't need to. If you are paying off existing debt on a credit card that's charging you interest, you can avoid paying another penny more by shifting it to a 0% balance transfer credit card and pay it off over the time of the interest-free period.

Watch out for current account fees

Most banks do not charge fees for standard current accounts. If you are being charged, make sure that any perks such as cashback, insurance or interest are worth the cost. If they are not, switching is simple and easy.

You can find out how to switch your bank account here.

Could my savings be doing more?

It is now more important than ever to make sure that your savings are in the right place. That could mean transferring to an easy access account, finding the best interest rate or even using your savings to pay off debts. You can find out more about savings accounts here.


Should I get an overdraft?

Overdrafts can be a useful tool to manage your cashflow problems, but it is essential you make sure you have the right one to avoid sky-high interest rates.

This week has seen a change in rules regarding overdraft fees after the FCA (Financial Conduct Authority) instructed lenders to simplify charges. Banks must now advertise only an interest rate, without daily fees. It was hoped this would make the cost of borrowing through an overdraft easier to understand and compare with other types of borrowing, but in response many banks have raised overdraft interest rates to as much as 40%.

After pressure from the FCA, banks including Lloyds, TSB, Bank of Scotland, Halifax, Santander and HSBC are now automatically providing temporary interest-free overdraft buffers of up to £500 for 3 months to help customers struggling during the pandemic. These changes are time-limited, so expect overdraft interest rates to rise once again this summer.

The FCA has announced that from 14 April 2020 banks must, upon request, make the first £500 of authorised overdrafts interest free for 3 months.

Find out more about overdrafts here.

Loan and credit card repayments

After a change in Financial Conduct Authority rules, many lenders are now offering to help customers struggling to pay off debts. From 14 April 2020 lenders must offer payment holidays of up to 3 months to customers affected by the pandemic. These holidays will not impact your creditworthiness or incur additional fees.

Some lenders are also waiving penalties and fees for missed payments. Contact your lender to find out what options are available.


Unused travelcards

With the UK Government now urging the public not to use public transport, you may find yourself with a costly travelcard you cannot use.

National rail and TFL refunds are usually calculated by taking the original cost of your ticket and subtracting the cost of a daily or monthly ticket for the time you have been using it. So if you returned your annual season ticket after 1 month, most retailers would refund you minus the cost of a 1 month ticket. There may also be an administration charge of up to £10.

Memberships for closed gyms 

While you can no longer get your exercise fix from a morning in the gym, make sure you’re not paying for it. Most gyms have frozen membership payments while others have switched to online fitness classes.

Pausing car insurance

Vehicles that are not on the road do not need to be insured. If the coronavirus crisis means you no longer need to use your car, you can apply for a Statutory Off Road Notification (SORN) to officially declare your car ‘off road’. Once it is certified, you no longer need to insure it or pay road tax.

Extra Earnings

Universal Credit

Universal Credit and other in-work benefits might be able to help you navigate financial difficulties. Recent changes mean that you may be able to qualify even if you were not eligible in the past.

Find out more about Universal Credit here

Can I get an additional job?

Being furloughed does not mean you cannot continue to work. Many industries are short staffed as a consequence of the coronavirus crisis, so a second job could be a good option for you.

Your employment contract still applies while you are on furlough, so make sure your current employer is happy with you taking on new work with a different employer.

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