How to financially survive lockdown 3.0

Your rights at work, your best tactic for cutting back, your entitlements… here’s what you need to know now

Felicity Hannah
Tuesday 05 January 2021 17:40
A new lockdown in England is expected to last until mid-February
A new lockdown in England is expected to last until mid-February

It was only a matter of time, and yet, when it arrived, it was still a shock. Lockdown 3.0 is here, but this time we know the drill.

For some of us, that will mean simply hunkering down and doing our best to limit the damage to our personal finances. For those people who are doing well by earning the same but spending less, it means making the most of this time to make sure you are in a financially strong position when we come out. So, whatever your situation and whatever is worrying you, here are the things you need to know to financially survive the coming months.

Know your rights at work

The government has put in place a furlough scheme and it has now been extended to the end of April. But there’s no automatic right to being furloughed and the scheme relies on employers making use of it rather than letting workers go or cutting their hours without furloughing them, if their contracts allow this.

However, you do still have employment rights and it’s important to know what they are. Since March last year, you are entitled to statutory sick pay from the first day you are off work if it’s down to Covid, including if you have symptoms but no positive test yet, or if you have been instructed to self-isolate.

If you are made redundant then you also have rights, in terms of statutory pay, notice and discrimination. There’s a useful guide available via the Acas website.

Parents who suddenly need to balance caring for children and work also have options and should talk to their employers about what’s best, including working flexible hours or using some paid leave.  

Georgia Roberts, employment solicitor at Clarkslegal, says: “Government guidance on the furlough scheme sets out that grants can be claimed in these circumstances specifically for employees who are unable to work because they have caring responsibilities resulting from Covid-19, including employees that need to look after children.”

Know your renting rights

There are more protections in place for renters than at the start of the pandemic. Landlords can’t begin eviction proceedings without giving you a minimum of six months notice, as long as you’re no more than six months behind with your rent.

Gary Hemming, commercial lending director at ABC Finance, says: “If you’re unable to pay your rent, the best approach is to be honest and upfront with your landlord or agent. Where you can pay some, but not all of your rent, this is a good approach. By making part payments, you’re showing a desire to work with the landlord, which is likely to keep things friendly and free of pressure.”


If you lose work or your partner does, or if you need some extra help, then make sure you are getting all the help you are entitled to.

A huge amount of benefits do not get claimed and many people who have previously not had to seek state support could risk missing out.

One good place to start is the Turn 2 Us benefit calculator. This useful website is full of guides to entitlements and how to claim but the calculator lets you see a personalised breakdown of what you can apply for.


If you run a business then there is a system of grants designed to get you through this tough period. It has been expanded and some businesses can now receive grants of up to £9,000, while local authorities have received money to make available to businesses. There is a useful breakdown of what help is available on the government website.  

Self-employed or freelance workers may be able to qualify for the grants designed in lieu of furlough. There’s a useful guide available on the Ipse website.  

Finally, if you’re not a business and not self-employed but you are still struggling, you can check if there are any additional grants available to you based on your location or sector. Use the Turn2Us checker.

Energy bills

Being at home in the summer was one thing but being home for so many wintry weeks risks energy bills rocketing through the roof.

Turning your thermostat down by just one degree will save a typical home around £60 a year, so it really is worth putting on an extra jumper and telling the kids they can’t expect to stroll around in just a T-shirt.

Also, if you’re on a standard energy tariff then comparing and switching to the most competitive provider can save hundreds of pounds a year, hopefully offsetting any increase in your usage.

If you’re on a prepayment meter then Ofgem brought in new rules last month to protect you. Energy firms must offer emergency credit and cannot leave customers cut off.

Savings habits

We all set goals in the last lockdown, like learning a new language or writing that novel, and most of them were unrealistic given the challenges we faced.

However, if you are saving money by staying home then setting a savings goal can help you use this time to build a financial cushion – which 2020 certainly showed us is a very useful thing to have!

Creating a budget so you know what’s coming in and out will let you see just how much you can afford to save each month – and you may be able to boost that by cancelling unused subscriptions or services. Make use of tax-free options, like ISAs so your savings are strengthened in the future too.

Justin Basini, CEO and co-founder of ClearScore, says making savings isn’t always the best decision: “With interest rates on savings at a low, you should consider prioritising paying off any debt you may have first, rather than continuing to save.  

“Missing just one month of repayments on your credit card could cause your credit score … to drop by 21 points, so it’s always worth ensuring that you make at least the minimum repayments on any debts you may have, rather than putting extra cash towards your savings.”

If you are struggling financially then saving might feel totally out of reach just now. But having a budget can help you stay in control of your finances, even if that just means limiting the debt you take on.

Lockdown luxuries

Being stuck home isn’t fun and if you are fortunate enough not to be struggling financially then it’s easy to start spending money without really thinking about it. Think late-night online shopping to break up the monotony or new subscription services to bring some fun.

That kind of spending may mostly be offset by savings on commuting or dining out, but it’s a good idea to set a budget rather than just let the money trickle out of your account – especially if you’re trying to save more.

Also, think carefully about big purchases. If you have used the lack of a holiday to justify buying new furniture, new gym equipment and a new TV then make sure you’re clear about how much you have spent overall. Otherwise you run the risk of spending twice as much!

Talk to your bank

In 2020 a series of payment holidays were made available for loans and mortgages, and then extended. If you haven’t yet made use of the scheme or its extension then you have until 31 March to request a payment deferral – although you have to be aware that this will result in you paying more interest in the long term.

But if you have already made use of those schemes and you are still struggling, it is absolutely essential that you talk to your lender as soon as possible. They can advise on what extra help they may be able to extend to you.

Simply ignoring it and missing payments will just mean you risk getting into even worse difficulties.

Keep calm and carry on

If the next few weeks are a real struggle then it may feel incredibly difficult. But try not to feel overwhelmed – whatever damage this period does to your finances, it isn’t forever. The end of this crisis is in sight as the vaccine programme rolls out.

So, if you are relying on credit to get through this period and if it is causing you anxiety, keep calm and keep on top of your finances as best you can. Don’t lose track of any debts you do run up, don’t be tempted to bury your head in the sand and let the credit card debt spiral.  

Keep it under control, keep on top of it and keep ready for rebuilding your finances as soon as you can. The end is in sight and every small step now will make it easier to recover later.

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