On New Year’s Eve 2019, the world raised a glass to the prospect of a prosperous, happy new year – blissfully oblivious to the impending catastrophe that was brewing in Wuhan. Even a few months later, economic pages were only making passing mention of what was to come, and even then, they weren’t suggesting that the whole world could be placed under an unprecedented lockdown.
The end of the outbreak might defy prediction in much the same way. The economic questions are so tightly bound in the cultural and scientific ones that making concrete, specific predictions would be unwise. But that doesn’t mean that we can’t plan for a range of plausible outcomes, and that the wisdom of all the financial advisors London is home to shouldn’t be sought during these testing times.
But in a more general sense, how are we to plan for our uncertain financial futures? Fortunately, there are a few steps we might now take.
Pay off debt
With the Bank of England’s base interest rate at a record low of 0.1%, it’s a bad time to be a saver and a great time to be a borrower. Examine your debt and see if you can consolidate it – you’ll find plenty of favourable interest rates available. If you’re saving, then now might be a good time to bring forward those spending plans, and put money aside later, when the rate becomes a little more competitive again.
Use internet banking
While many of us might have hesitated to adopt internet banking, the fact is that physical visits to your local branch are now out of the question. If you’re going to stay apprised of your financial situation, then you’ll need the help of internet banking. Getting this set up is easy, and it’ll make managing your finances easier, even after the lockdown has been lifted.
Take advantage of the furlough scheme
The government has put up the cash necessary to keep workers in employment, up to 80% of your wages can be paid for when you sign up to the scheme. It’s down to your employer whether they make up the other 20%. The idea of this ‘job retention scheme’, as you might imagine, is to keep the economy in a dormant state, so that the economic pain of layoffs and re-hiring can be avoided.
Control your spending
Given the loss of income you’ll probably be suffering, it’s an excellent time to reign in spending. Non-essential purchases should be dispensed with. Of course, what’s essential and what isn’t can be extremely subjective, so now might be an excellent time to reassess your priorities and determine what you can and can’t live without.
Cut back on travel
Of course, the amount of money you spend on travel will have fallen through the floor – you aren’t going to be taking regular journeys if you’re housebound, and especially not overseas ones. Keep an eye on the Foreign Office’s travel advice.