What has the pandemic meant for your budgeting and personal finances? Some people have never felt richer, unable to spend their earnings, money normally frittered on rounds of drinks or foreign travel, quick enough.
The Bank of England reported earlier this year that households were paying down credit card debts in record numbers, using the opportunity of less social pressure to spend to get on top of their bills.
But this is only a small part of the covid money picture.
There are still over 4 million people on furlough, unsure if their jobs will return. Particular groups, including young people, the low paid, women who have had to homeschool and care for relatives, and those nearer retirement, forced out of work in disproportionate numbers, have seen their savings dissipate, and are facing a financially uncertain future.
Debt charities say they’ve seen a change in the demographic of those using their services in recent months, people who have never claimed benefits, been in financial difficulty or owed money before.
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As we emerge from lockdown, and the usual cost of living picks up, along with pressures and temptations to spend, there is a need for new ways to help us manage our money better.
There is a growing number of apps and tools, which have been launched during the pandemic, to make this easier.
Nesta, the innovation fund, which has been collaborating with the Big Issue’s Ride Out Recession Alliance to support more people to become financially resilient in the wake of Covid, has pledged to support 1million people hardest hit by the economic shock by 2023, through funding innovative tools and online services. Its innovator finalists, announced this month as part of the £3million Rapid Recovery Challenge, in partnership with DWP, JPMorgan Chase Foundation and Money and Pensions Service, aim to support the financial security and job prospects of low-paid workers, people in insecure roles and those under 25.
Here are how they, and some of our other favourite apps for money management, can help you:
Millions of people miss out on benefits each year, things that they are entitled to but don’t realise or know about such as universal credit, council tax support or help for utility bills.
IncomeMax digital, which says many essential funds for families with children, disabilities and caring responsibilities also go unclaimed, offers a way to quickly check what you’re entitled to with support from a trained expert to guide you through the process, and manage your debt, too.
It prides itself on being “human centred”: you can choose how you speak to the expert. That may be through a messaging service if you’re busy at work or looking after kids, or you can schedule a phone call.
You can also log into your IncomeMax account to see all our saved conversations, advice and links in one place.
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There are also many grants available to support those in financial difficulty, but it can be hard to know where to find them, and you can face a lengthy wait to receive the money. Turn2Us has a new digital grants delivery platform to speed up the process.
Thomas Lawson, chief executive of Turn2Us, says this rapid response to the many challenging and difficult personal income shocks of the Covid-19 pandemic will enable people in financial hardship to cope more quickly and effectively. “Through the new platform, individuals requiring financial support can apply and be verified online with a few streamlined, one-stop steps. Once approved, payment can be received within a day,” This will also, they hope, allow all grant providers to scale up and help even more people.
Hastee says that Covid-19 has had a devastating impact on workers, with 63 per cent relying on high-cost credit between pay days in 2020.
Its founder James Herbert, started the business after noticing staff in his previous venture, a hospitality staffing recruitment business, were turning down jobs because they didn’t have enough cash to pay for a train journey to get to them, even though they were due to be paid within a few days.
He saw an opportunity to restructure the way people receive their wages, an alternative to costly payday loans. Hastee allows you to withdraw some of your earnings early, before you officially receive them, breaking what it calls “the outdated monthly pay-cycle that forces many into debt and financial stress”.
It is using the grant money from Nesta to launch a bespoke financial education platform, free for all 16-24 year olds for a year, and make its earnings on demand accessible to an additional 97,000 people.
Yolt helps you analyse what’s really going on with your finances by connecting all your bank accounts, credit cards and bills so you can get a holistic picture in one place. It will also alert you to any upcoming payments so you don’t go overdrawn and help you switch your bills to better deals.
During the pandemic, it has updated its app to encourage people to save more, after finding that 6.6million people in the UK have nothing set aside for a rainy day.Now, there’s a new pre-paid debit card that you can use for shopping and saving, also offering cashback. Every time you use the card your purchases are rounded up to the nearest pound (or more, you can choose) and the difference is saved in a virtual money jar to make it easier to build an emergency fund.
Starling account and connected cards
As well as a current account, the digital bank Starling is also a great budgeting tool, categorising all your spending so you can see exactly where your money goes. Its spaces feature, a virtual piggy bank, lets you set savings aside at a tap, as soon as they land in your account. Handy if your normally saving technique is “see what’s left at the end of the month”.
During lockdown it became one of the first banks to introduce “connected cards”, allowing you to give someone else access to your bank account without any risk of fraud.
You get a second debit card for a trusted person, friends, a neighbour, childminder or NHS worker, that enables them to go to the supermarket, or chemist, or buy things for you or your kids, without having to hand over your PIN. The money comes out of a designated space that you set up, and is capped at £200 a time.
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More articles in this series:
- How to change your career – A step-by-step guide
- Employee rights in the UK: Everything you need to know
- Redundancy rights: Everything you need to know
- How to write a CV that will get you a job
- Job interview questions: What to ask and how to answer
- CV templates: Free downloads for job application success
- What to do if you’ve been made redundant
- Apprenticeships: Everything you need to know
- Apprenticeships: How to get a job once your placement ends
- Redundancy: Surviving the mental health impact of losing your job
- 11 tips to help you make the most of online learning
- How to go self-employed in the pandemic
- Budgets, benefits and tax breaks: Money advice for young people after Covid
- The top job adverts to look out for as lockdown eases
- How to retrain for a new job when you’re over 50
- What is flexible working and how can you ask for it?