Financial Support For A Second Lockdown

Rishi Sunak

Those in the UK will be aware that the country has now gone into a second national lockdown, with all non-essential businesses closing for at least a month.

As with the first lockdown, this will mean that cafes, pubs, restaurants and entertainment companies will all be closing their doors, alongside beauty businesses like hairdressers and tattoo parlours, and shops that sell non-essential goods.

It means that a lot of people will now be out of work for an extended period of time, so it’s no surprise that the government have announced financial support to keep people on their feet. Here’s an outline of what’s on offer.

Furlough extended to the end of March

The most important announcement is the fact that the furlough scheme will be extended until Spring. This means that companies can furlough their employees – sending them home without work but keeping them on the payroll – and the government will pay a proportion of wages.

In the original furlough scheme, which comes to end in November, employers were asked to continue paying 20% of wages with the government paying an additional 60%. This meant that people were guaranteed 80% of their regular take home pay.

With the new scheme, people will continue to take home 80% – however it will all be funded by the government. This means that those businesses that are no longer taking any income should still have the option of furloughing employees, without having to worry about the effect on their bank balance.

It has also been confirmed that those who have been made redundant since 23 September will still be eligible if their company decides to rehire them. If this applies to you and you still have a good relationship with your old boss then it’s definitely worth having the conversation.

Better options for the self-employed

In the chancellor’s speech, he also shared some good news for the self-employed. Those eligible for the Self-Employment Income Support Scheme will now be able to apply for a third grant which offers 80% of average trading profits to cover the period from November to January. The maximum grant available is £7,500.

Unfortunately, this won’t cover freelancers or those who have become self-employed very recently. This means that there will be a significant group of people feeling that they have fallen through the gaps. That said, it’s clear that the government are trying to find a way to support as many people as possible, and this latest wave of support is the most generous yet.

It’s important to note that, just because these schemes extend well into the new year, it doesn’t necessarily imply that the government are expecting the lockdown to last longer than expected. In the summer we saw that it took a while for previously closed businesses to get back on their feet, so offering furlough until March offers some extra time and security. At the moment it’s impossible to predict which businesses will be open come January – but at least this news will provide a welcome cushion of support for many.

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