Getting Through the Cost of Living Crisis
It’s clear that most people are feeling worried and confused about what is going on in the UK economy right now. The cost of living crisis is dominating the news and seems set to be part of our lives for some time to come. With all the bad news and the constant changing legislation and guidance it’s ok to feel stressed and overwhelmed. But whatever you do, do not ignore the problem and hope it goes away.
It’s now more important than ever to tackle the issues we’re facing head-on and remember that support is always available.
I’m reaching out in a hope that this message helps, if only in a small way, you through these times.
For Your Business
Any Bounce Back Loan borrower with concerns regarding repaying the loan should contact its/their Lender to discuss the various options available.
Your Lender will be able to advise you on your options in the light of any other borrowing you may have with them.
Your Lender will explain to you about the various PAYG options, which will enable businesses to:
- request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%
- reduce their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan
- take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.
Unfortunately, if your loan is not a BBL then there is no set ‘help’ that is given. But you should get in touch with your lender to see what they can do.
Study Historical Industry Performance
Look at historical performance for your industry during difficult time. See what has worked previously and what can work again in the current cost of living crisis. Times of financial hardship pressure-test businesses, and the ones that have strong, sustainable processes and plans will come out stronger.
Listen To Your Customers
Do your best to predict the future demands of tomorrow, today by listening to your customers. Have their needs changed? Can you change? What can you do to keep them buying from you?
Don’t Spend Based on Your Projections
Budget for what was in the bank yesterday, not what you think you will have tomorrow. Build up as much cash in the business as you can. At a minimum, try to have two months of operating expenses in the bank in addition to what’s set aside for taxes.
Watch Your Accounts Receivables
Keeping a close eye on your accounts receivable is the key to ensuring your business will always be around. As long as your customers are paying and you aren’t overextending for them, you will be financially secure today and tomorrow. Being aware of when a client is over their time and speaking to them quickly will protect you and your business.
For You Personally
Get Help Paying Down Your Debt
If you’re struggling to make your credit card and loan repayments, you could reduce the amount you’re repaying or change your repayment plan to stop you from falling behind. Lenders must help you if you’re having trouble paying off your debt. So, it’s a good idea to get in touch with them and see what they can do.
Consider Fixing Your Mortgage Rate
When it comes to mortgages, things are changing quickly. Mortgage rates are going up fast as the Bank of England tries to reduce inflation. If you have a mortgage, now’s the time to act. Consider locking in a new fixed rate – it could give you greater peace of mind.
Look For Better Savings
Banks are hiking interest rates on savings too. The average savings rate is now higher than it’s been for a decade. So it’s worth checking the rate on your savings and considering if now is a good time to switch banks. Some banks are even paying new customers £100 or more to switch.
Get Help with Your Energy Bills
Even with the Government’s promise to cap household energy bills, most of us are already paying much more for gas and electricity. But don’t rush to cancel your Direct Debits if you’re worried about being able to pay. It could harm your credit score. And a lower credit score could restrict your access to finance in the future.
If you’re struggling to pay your energy bills in the cost of living crisis, call your supplier and ask for help. They are legally required to offer you a payment plan you can afford. And you can ask for emergency credit if you need it. You may also be entitled to a discount on your bills. Check your eligibility for the Government’s Energy Bills Support Scheme.
Claim Any Benefits You’re Entitled To
Remember to check if you are eligible for any other benefits. Many people don’t realise they’re entitled to claim.
For You and Your Business
Stay Safe from Scams
Unfortunately, times of great stress don’t stop fraudsters from trying to fool us. A good rule of thumb: if it seems too good to be true, it almost certainly is. Be suspicious of every text, email or call asking for your personal or financial details. If you’re not sure it’s legitimate, ask to call them back.
Let’s not forget that the economy is cyclical; it goes up and down. And while it doesn’t make up for the current pain and worry during the cost of living crisis, we will get through this. It’s also important to remember that you’re not alone. But if you are concerned, reach out to your suppliers, banks and lenders to see if they can help you.
If you’re looking for further advice, please don’t hesitate to contact me – firstname.lastname@example.org
About The Author
Blue Rocket Accounting Managing Director, Miguel Calabrese helps business owners grow their profits, save time and keep more of their hard-earned money. He offers his expertise to ease the headaches caused by everyday challenges and has a passion for inspiring business owners to look at their businesses with a different perspective to see what opportunities can be uncovered.
We are a marketing agency in Kent. If you have any inquiries about marketing and communications, please do not hesitate to contact us. Call us or send us an email, and we will get back to you as soon as possible. We can also arrange a 30-minute free consultation call or a Zoom meeting to discuss your needs and how we can help.