Managing your money can be challenging in the best of times but over the past few months, you may have found yourself trying to navigate completely uncharted territory with your finances leaving you insecure and vulnerable.
Over the past few months, your income may have dropped and you could find yourself in some debt. In this blog, you can find some tips from trusted sources which aim to help you manage debt. Remember: we are not independent financial advisors. You must make your own decisions and seek support from those qualified to give it when it comes to your finances.
We want to help drivers access useful resources relating to money and beyond.
If you have money-related questions that aren’t answered in this blog, please email [email protected] using the subject line #AskAmi. We will work with qualified independent financial advisors to help you get answers to some of your questions. We will be covering off different money topics over the coming months so please let us know what you’d like to know about!
Understanding your debt
As a private hire driver, you technically own your own business and are classed as self-employed. When someone who is self-employed finds themselves in debt, it’s common that it’s a combination of both business and personal debts due to a mixing of finances. For example, using personal credit to pay for a car would be very common amongst Uber drivers.
If you’ve only recently found yourself in debt, this could well be to do with the current economic situation in the UK and the sudden change in behaviours. Although it’s easy to justify how you came to find yourself in debt but unfortunately, it still needs to be addressed as it will not go away on its own.
It’s important to understand that the debt itself is not the root of the problem, it’s a knock-on effect from something else and until that’s identified and addressed, it’s likely that your debt will only grow.
Government support during the pandemic
As you may well know, the government has been supporting self-employed people during the COVID-19 outbreak by offering a taxable grant of 80% of your net earnings up to a maximum of £2,500 per month for three months.
This scheme has now been extended and you can apply for a second and final grant in August. It’s important to note that the scheme has changed slightly in that you can now claim 70% of your average profits up to a total of £6,570.
Please see here for further information from the UK government.
Seeking long-term help
The sooner you seek help, the easier your recovery from debt will be. It’s very common that people in debt don’t seek advice until they are already behind with their payments and have already been struggling for a year or two. A recent survey by the Money Advice Trust found that 47% of people said that the reason they didn’t seek advice early was because they were too stressed about their debts.
Addressing the problems as soon as they start to arise means that they are likely to be resolved more easily and could be less difficult than you might think. So don’t delay help and get yourself into a state of stress and worry. There’s lots of free help out there.
Free, tailored advice
There are plenty of free and useful resources where you can get personal advice from trusted, qualified advisors. They’ll take the time to understand your unique situation and help you come up with a plan to address any debt you have.
Business Debtline specialises in advising business owners or self-employed individuals such as yourselves. They have this really handy and extensive set of FAQs or you can webchat or call them to speak to an advisor directly. It’s owned by the Money Advice Trust who also have a separate branch for personal help called the National Debtline.
Step Change is a charity dedicated to helping people with debt. You can get free and impartial advice from their experts online or over the phone and they’ll recommend a range of practical debt solutions based on your situation.
Citizens Advice has an extensive range of resources available to you regarding debt and money.
MoneySavingExpert also has a guide to helping you get out of debt and finding long-term solutions that will help you manage your money.