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COVID-19/Coronavirus: Personal finance and insolvency

COVID-19/Coronavirus: Personal finance and insolvency

25 March 2020

The impact of the global COVID-19 pandemic on many people's personal financial situation will be enormous. Lost jobs, reduced hours, smaller pay packets, and mandatory unpaid leave are just some of the widely reported phenomena which the economic impact of the virus have caused, while longer-term impacts are also a virtual certainty.

For people on low incomes or in receipt of benefits, the products and services they rely on to keep their heads above water - from the reduced food section in the supermarket, to food banks, to free school lunches for their children - may no longer be available, while it has become more difficult to get hold of food staples in shops, worsening food insecurity. The Government's package of support for employees, announced by the Chancellor, will help to an extent, but may not be enough on its own to help the self-employed, or those on zero hours contracts, or those who have no money left at the end of each month.

Below is a selection of advice and information for people in financial distress, given by R3's Personal Insolvency Committee, and a list of organisations which offer help and support.

  • If you are finding it hard or impossible to keep up with your financial obligations, it is important to seek help and advice from a trusted and qualified source - and the sooner you do so, the more opportunity you will have to find a workable solution and a path to stability. Most insolvency practitioners will offer an hour of free advice to people in debt, and you use our "Find a member" tool to locate the nearest insolvency practitioner to you.

Assess your situation

Sit down and work out your financial situation - assets and liabilities, income and expenditure. Try and forecast what will happen to you next. Will a school closure make it necessary for you to reduce your hours at work, for example? See what benefits you are eligible for; if you are a homeowner, talk to your mortgage provider about a payment 'holiday'.


Talking to the people you owe money to will be vital. If you know that a pending bill or repayment will be impossible for you to fulfil, contact the organisation in question and explain your situation. In many cases, they are likely to be sympathetic and offer extra time to pay. This is especially likely to be the case for larger financial services companies and banks, which will have formal systems in place for dealing with people in crisis.

Debt advice

Talking to organisations which can offer advice and support - such as charities and registered debt advisers - is another sensible step, although be aware that there is likely to be very high demand for their services, and it may be hard to get through on the phone. If you are looking for advice online, make sure you are on the website of the organisation you were searching for - and not a website with a similar name. There are links to a number of sources of help at the bottom of this post (see Sources of help).

Taking on debt in response to a drop in income should be a last resort, as it will store up problems for the future. If it is unavoidable, however, using a regulated and registered finance provider - not a loan shark, or unregulated lender - is a must. Check the FCA register to see if a company offering you a loan is regulated, and avoid loan sharks.

Already in an insolvency procedure?

If you are in an Individual Voluntary Arrangement (IVA), a Protected Trust Deed (PTD), or making payments under a Debt Management Plan (DMP), you should immediately contact the supervisor/trustee of your IVA/PTD, or the company overseeing the DMP if your income falls due to COVID-19, and you are unable to make payments as agreed. Gather evidence to show that your income has fallen. This post has more advice.

Keep calm

Above all, don't panic. The pandemic has affected the lives of almost everyone in the UK, one way or another; there is a general acceptance that this is something that no one can tackle alone. There is help and support available – talking to someone can be the first step to finding it.

List of sources of help and support

  • Citizens Advice

Tel: 03444 111 444

  • Debt Advice Foundation

Tel: 0800 043 40 50

  • Money Advice Service

Tel: 0800 138 7777

  • National Debtline 

Tel: 0808 808 4000 or

National Debtline produces a useful booklet, 'How to Deal with Debt', which contains a lot of helpful information about budgeting, maximising your income and managing your affairs.

  • PayPlan

Tel: 0800 280 2816

  • StepChange Debt Charity

Tel: 0800 138 1111

  • Turn2us

Help with mental health

  • Samaritans

Tel: 116 123 (free 24 hour helpline)

  • Mind

Tel: 0300 123 3393 (Mon-Fri 9am to 5pm)

  • Mental Health Foundation

  • Mental Health and Money Advice

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For more information please contact
Jo Tacon
Jo Tacon
020 7566 4203
James JeffreysJames Jeffreys
Head of Press, Policy and Public Affairs
020 7566 4220
Stuart McBrideStuart McBride
Communications Manager
020 7566 4214
Jo TaconJo Tacon
Communications Officer
020 7566 4203

R3 members can provide advice on a range of business and personal finance issues. To find an R3 member who can help you, click below.