Coronavirus: Expert calls on credit providers to offer support for the most vulnerable

Changes to the financial system may also worry people, some have theorised that taking advantage of the new measures could impact their credit score. Mortgage and rental holidays are now available for people who struggle financially as a result of coronavirus.

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Thankfully, official bodies and several banks have confirmed that taking advantage of these schemes will not impact a credit score.

Employees, Universal Credit claimants and businesses have received a lot of support from the government over the last week or so.

However, support for the self–employed has been limited.

Many have been critical of the government for not providing support for the self-employed on the same level as workers

This is considered critical as around five million people in the UK are self-employed.

Justin Basini, the Founder and CEO of ClearScore, commented on what this lack of action could mean for the self-employed: ”As often happens in the early stages of an economic shock, credit is, understandably, withdrawn from certain parts of the market wholesale.

“At this time it’s really hitting the self-employed hard.

“A self-employed person is currently less likely to get pre-approved credit than an unemployed person.”

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Justin went on to detail that the government’s announcement that a support package is on its way is very welcome.

He called on the government to offer similar levels of support shown to PAYE employees.

Currently, employees can have up to 80 percent of their pay covered by the state if they fall on hard times.

Many experts have theorised that a similar safety net will be provided for the self-employed.

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While this will be welcome, Justin calls on other bodies within the financial landscape to also play their part: “Credit providers, lenders and banks also have a role to play in supporting this vulnerable group by working hard to identify those self-employed who will continue to earn through this difficult period, and are therefore eligible for their products, rather than implementing an unfair and unnecessary ‘blanket’ credit criteria.”

The government has confirmed that a support package for the self-employed will be laid out tonight.

Rishi Sunak will reveal what this package is and will likely provide an update on the economy at large. The government has been tight lipped about what will be contained within this plan, likely due to it’s complexity.

While funding 80 percent of a salary is easy as there is a defined number, self-employed earnings can vary, meaning that it will be difficult to provide a level playing field of support.

Many experts, such as Martin Lewis, have theorised on how figures will be calculated for self-employed wages.

One of the leading ideas is that earnings from previous years will be analysed and an averaged amount will be provided based off that.

Others have warned however that the support package will not be as generous as the one given to employees. There will likely be many more questioned levied once Mr Sunak reveals the government’s plans.

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