Whilst delivering protection to the NHS is the government’s primary focus, there is also a whole raft of multi-billion pound packages to help support the economy, and people’s income stream and job security, such as:
80% of Salary – Coronavirus Job Retention Scheme
Under this scheme, all UK employers are able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off.
It’s applicable to those designated as ‘furloughed workers’ (these are people absent temporarily from work), and the HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
This scheme has now been further extended to run until the end of October. The government will ask employers to start sharing part of the cost from August, and at the same time, employers will then be able to bring back furloughed employees to work part-time.
Mortgage payment holiday
Mortgage lenders have agreed to support customers (including buy-to-let borrowers) who are experiencing issues with their finances due to COVID-19, including payment holidays of up to 3 months.
Whilst a payment holiday may deliver much-needed financial help, do consider if it’s the most suitable route forward for you.
First, it’s not so much a ‘holiday’, but more about a mortgage ‘deferment’. This is because the money owed is not being waived, as it’s simply added to the overall outstanding amount, so you may be paying more for your mortgage in the long run.
Second, you need to agree this with your mortgage lender, so you can’t just stop making payments, as that might also impact on your credit rating.
Finally, there may be other options to consider (if on offer), such as extending the length of the mortgage term to help reduce the immediate monthly payments (again, this would increase the overall cost of the mortgage). You may be able to pay a lower amount each month, or even switch to just paying the interest for a defined period (where the capital amount that’s outstanding would remain the same).
Statutory Sick Pay
All of those advised to self-isolate – or caring for those self-isolating – are entitled (if eligible) to Statutory Sick Pay (SSP). For those who cannot claim SSP (such as the
self-employed), there will be alternative comparable support through the welfare system. Additionally, the normal welfare options are in place, if unemployed.
Business support
If you run, or are responsible for, a small or medium-sized business, you will be aware of the wide range of initiatives to deliver assistance in areas such as reclaiming SSP, business rates help, possible grants, more time to pay tax, and deferring VAT payments.
Loans are on offer too. Initially, one of the main schemes here was the Coronavirus Business Interruption Loan Scheme, where the government is underwriting 80% of
the risk.
However, some businesses were complaining about the difficulty to secure loans, and in response to this the Bounce Back Loans scheme has additionally been launched, where the government will now underwrite 100% of loans between £2,000-£50,000, with less hoops to jump through. Application is available via a short and simple online form. If successful, the cash will arrive in days. You will not be required to make any repayments across the first 12 months, and this period will also be interest-free, with a 2.5% interest rate, thereafter, agreed between the government and lenders.
