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Living with less income

Keeping on top of your money when there's less of it

Life can sometimes throw unpleasant surprises at you, and one that can be particularly worrying is when your income goes down unexpectedly.

The impact of coronavirus (COVID-19) has meant this has happened to many people recently.

But whether you’ve lost your job, had to accept a salary reduction, or lost work or shifts, it’s important to keep a clear head. Think sensibly and take the actions that are right for your individual circumstances.

Here are a few things to consider that could help get you back on your feet.

Accessing financial support

You could be entitled to help from the government or your bank, with both offering potential support. Utility providers might be able to offer some help, too, if you’re struggling with bills.

The main thing to remember is to contact providers before you get into financial difficulty, as letting them know early on could help mitigate the impact.

Help from the government

One of the first things you should do is look at what government support you might be eligible for, and apply for it as soon as you can. If you’ve seen your income decline, here are some of the main ways the government could help.

  • Universal Credit – if you’ve lost your job or are on a low income, you can apply for Universal Credit. The standard allowance is £409.89 a month for a single claimant aged 25 or over.
    If you already claim benefits, including working tax credits, applying for Universal Credit could affect your eligibility for them in the future. You should get independent advice before you start any claim
 
  • New Style Job Seeker’s Allowance – if you’ve lost your job or you work less than 16 hours a week, you might be able to claim New Style Job Seeker’s Allowance. It’s currently up to £74.35 a week if you’re aged 25 or over (up to £58.90 If you’re under 25)
 
  • Statutory Sick Pay (SSP) if you’re too ill to work, you can get SSP of £95.85 per week, paid by your employer for up to 28 weeks. You can also claim SSP if you’re self-isolating because of coronavirus, or living in the same household as others who are self-isolating and you've been advised to quarantine as a household

The amount you could get will depend on your circumstances – you might be eligible for more or less than the amounts we've mentioned here. You should get independent advice to find out what government support you could be entitled to.

Another thing to do is to check your insurance policies. If you have a mortgage or any loans, you might have also taken out separate cover to help with the payments in case you're unable to work or you lose your job. It’s easy to lose track of these but, depending on your circumstances, you might be able to make a claim.

The Money Advice Service can help you find out about the benefits you might be entitled to.

How your bank could help

It’s likely that your bank will have measures in place to help support you if your income has fallen, some of which will be specifically for the impact of coronavirus. If you have a mortgage, loan or outstanding credit card balance, you might be able to take a payment holiday. It’s worth bearing in mind that you'll still be charged interest during a payment holiday, which will be added to the amount you owe, so think carefully about whether this is the right option for you.

Some banks have eased restrictions on some of their savings accounts so it's easier for you to get to your money if you need to. You might also be able to benefit from reduced interest rates on arranged overdrafts, or apply for one if you don’t already have one.

If you have any accounts or products with us, see how we might be able to help.

Talk to your utility providers

If you're having difficulty with your household bills, talk to your providers to see if they can offer any temporary support. It's also a good idea to check if you could get a better deal – try a comparison website to see what's available.

It's not all about coronavirus

Don't worry if you find you're not eligible for any government support, or coronavirus-specific help from your bank. If the bills are piling up for whatever reason and you're feeling the strain, talk to your provider. They'll usually have options to help if you’re struggling. For example, they might be able to work with you to create a repayment plan, so you can manage your day-to-day expenses while still making some repayments.

Make the most of what you already have

From reviewing your spending to dipping into your savings, there are some things you might be able to do to help ease financial pressure.

Using your savings

If you’ve seen your income drop and you have savings, in some circumstances, it could make sense to use them now.

For example, if you’ve been putting money away as a safety net, perhaps now's the right time to let your hard work cushion the blow. Or, if you’ve been saving up for something special, it might make more sense to use that money to address your more immediate needs.

While savings can be extremely useful as you adjust to a lower income, they're probably only likely to be able to help you in the short term. You’ll still need to think about any longer-term fixes.

Review your spending

When your income falls, particularly if it's a significant drop, cutting back on your outgoings is likely to be necessary as you readjust to your new circumstances.

So take an honest look at all of your expenditure. Go back over previous months to get a clearer picture of what you spend and how you spend it. Check what's essential and what are luxuries, and see what you can live without.

It’s not all about cutting out life’s pleasures though, and there are other avenues to explore that could help you reduce your spending.

If you’re renting, talk to your landlord. If you’ve been affected by coronavirus, they might be willing to offer you a rent reduction or a temporary pause in payments. The Money Advice Service has more information for renters.

if you’re struggling to pay other bills, speak to your utilities and other service providers as soon as you can. If you’ve been affected by coronavirus, many providers have put support measures in place – and it’s much easier to deal with this kind of situation if you address it quickly.

Citizen's Advice has more information on the help available if you're struggling to pay your bills.

The Barclays app is a great way to keep on top of your finances. You can add accounts from other providers to see all your balances and transactions in one place. The spending section shows you exactly where your money's going, making it easier to budget and cut out any non-essentials.

If you'd like some free and impartial help, have a chat with one of our Money Mentors. They can help with everything from basic budgeting to buying a home.

Explore exciting new possibilities

Whether it’s turning your talents into income or using your time to expand your skills, now could be the perfect time to develop your future career.

Maximise your talents

Just because your previous employer isn't making use of your talents anymore, doesn't mean nobody else can – and that includes you.

If you have a professional skill or expertise, maybe you could unleash your inner entrepreneur and develop a sideline. Perhaps you’ve worked in finance and could help local businesses to organise their accounts. If you used to work in fashion retail, could you offer your services as a stylist or personal shopper? You might even be able to offer consultancy services in whatever areas your expertise stretches to.

What’s important is recognising that your talents and abilities can have a life outside your employment, and then turning that insight into income – remembering, of course, that becoming self-employed or earning additional income will come with its own set of tax obligations.

But why not take things further and really invest in yourself by setting up your own business? If the knowledge and experience you’ve gained, combined with your own ability, has left you feeling you could make a better job of it than anyone else out there, now might be the perfect time to take the leap.

Make your free time count

There can be up sides to losing your job or having an extended period at home. They can be hard to see sometimes, but with the right mindset, you could find profitable opportunities.

Now could, for example, be a great time to do more training or personal development. Updating your skills not only keeps you active but also helps you stay engaged and focused on the future. And it could make you more attractive to potential employers.

Finally, if you have a hobby that you’re particularly skilled at, is it something you can monetise? Whether you’re a great painter, a skilled carpenter or a talented musician with a knack for teaching others, turning your hobby into an income – perhaps even a business – can be very rewarding, both personally and financially.

Money worries, your mental health and budgeting

See how we can help if you’re concerned about paying your bills, or worried about your mental health. You’ll find our handy money management guides here too.

Worried about money and your mental health?

Find practical advice to help you tackle money troubles and debt, improve your financial habits, and see how we can offer you support.

Money management tips

Take control of your money and improve your financial health with our easy-to-follow guides on budgeting, saving and planning for your future.

Extra help and advice

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The Money Advice Service

Get free, impartial information and tools on how to manage your money.

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StepChange

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Citizens Advice

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Contact us

Worried you’ll miss a payment?

Help is always at hand. As soon as you think you might have some financial difficulties, give us a call – it could help make things better.

Have some information about your financial situation ready, before you call, including your income and outgoings. You might be talking for a while – we’ll want to understand your situation in detail, so make sure you set aside some time.

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Missed a payment and want to catch up?

If you’ve missed a payment on your Barclayloan, overdraft or Barclaycard, you might be able to pay it using the Barclays app1, – or give us a call.

Overdrafts and Barclayloan – 0345 703 4034 Monday to Thursday, 8am to 8pm, Friday, 8am to 7pm and Saturday, 9am to 4pm

For a mortgage or Barclaycard, please call the relevant number in the section above.