What to do if you have a drop in income

Re-do your budget

If your household’s income changes, it’s time to review your budget. 

Work out what your new income will be, and note all the expenses you currently have coming out. Using a budget will help you to see how much money you need to cover any critical expenses, and if the income you still have coming in will be enough.

Cut costs where you can

Once you’ve worked out the difference between what you’re earning and what you’re spending, you can try to close the gap between income and expenses by cutting any unnecessary costs. Some of these costs will have decreased for us - reduced spending on transport, eating out and social activities. 

Talk with your lenders

Debt is usually an obligation that you are stuck paying even if your income changes. That’s slightly different in this current environment, so it’s worth talking to your lender to see if they can offer some kind of repayment plan. You could see if you can consolidate your debt onto a lower rate or even look to find a 0% credit card – freeing up some extra money each month.

The Financial Conduct Authority has provided an update on what happens to the support for those impacted financially by coronavirus. 

Go easy on yourself

It’s ok if you feel like you’re going backwards a bit financially right now. Everyone is going through similar difficulties and the government is working hard to provide health and financial support. Mind.co.uk has some great resources to support our mental health during this time.

Get the benefits and support that are available

You can find all details on the Gov.uk website, but here are key things to note:

• Coronavirus Job Retention Scheme has been extended until September 2021.
• Statutory sick pay: You can get this from day one if you need to self-isolate, cannot work. You can get £95 a week for up to 28 weeks.
• You may be eligible for universal credit, child tax credits or housing allowance. Check what you're entitled to by using a benefit calculator like www.turn2us.org.uk