Beware binning policies in the current crisis – Birmingham Post article 16.04.2020

When people are struggling to make ends meet, such as in the current coronavirus crisis, financial services products are often among the first things to be dumped.

But please take great care before cancelling any policies.

With health being the central issue here, you should not even consider pulling any life assurance or health related insurances. Morbid as it sounds, these are times when such policies are potentially the most valuable pieces of paper that you own.

So, make sure you know what policies you have and brief your loved ones accordingly.

When meeting new clients, we find they are frequently not clear what policies they hold and we have to engage in some detective work.

Look at your bank statements, look through the filing cabinets to try and make a list of what you have. You can contact the companies for details or you can engage a financial adviser to help.

Policies may include benefits that pay out if you’re seriously ill or unable to work as a result of illness. Some policies, including personal pensions, also carry a facility where premiums are waived if you can’t work as a result of illness.

If you’re having to tighten your belt, many pension and savings plans will allow you to take a break from or reduce regular contributions without being penalised. Bear in mind that if you do this, you will be saving less money in the long term so keep this to a minimum.

If you have a mortgage, loan or credit card debt, talk to your lenders as soon as you can. They will want to help with payment holidays or reductions.

To this end, Royal London has come up with a list of helpful hints – here are some of them.

  • If you’re struggling to meet mortgage payments because your income has been disrupted, you can contact your lender and ask for a three-month mortgage payment holiday. This also applies to landlords with buy-to-let mortgages whose tenants are in difficulty with their rent.


  • Those unable to repay credit cards and loans can also ask for a temporary payment freeze for three months. The first £500 of any arranged overdraft should be interest-free. If you are struggling to meet repayments, contact your lender – they’re required by law to offer you help.


  • The Government is providing self-employed people, with annual profits of less than £50,000, grants for up to 80 per cent of those profits, up to £2,500 a month. The level of grant will be based on an average of profits from the last three years, based on evidence from tax returns. It will be available from early June. Those who own companies and pay themselves through dividends will not be eligible for these grants, but may be eligible for other support. The support is only available to those who have filed tax returns, so the newly self-employed, since April 2019, will miss out, but can claim Universal Credit (UC) if their income is affected. The Government has also made it easier to claim Employment and Support Allowance (ESA) and UC, at a rate of £95.85 a week (equivalent to Statutory Sick Pay for the 2020/21 tax year), and the self-employed can defer self-assessment tax payments until January 2021.

If you’ve never claimed benefits before, or simply felt too embarrassed or ashamed to consider doing so, swallow your pride. Claim what is rightfully yours. Check what might trigger an entitlement at GOV.UK.

Don’t bury your head in the sand, do an honest and sensible budget plan.