Furlough Scheme Extended and Further Economic Support Announced as England enters second national lockdown

People and businesses across the UK are being provided with additional financial support as part of the government’s plan for the next phase of its response to the coronavirus outbreak, the Prime Minister Boris Johnson announced on Saturday (31 October).

Throughout the crisis the government’s priority has been to protect lives and livelihoods.

As part of the announcement of month-long restrictions in England, including the closure of pubs, restaurants, gyms and non-essential shops, the Prime Minister said the government’s Coronavirus Job Retention Scheme - also known as the Furlough scheme - will remain open until December, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.

Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ended 31 October. This means the extended furlough scheme is more generous for employers than it was in October. 

Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme, which will continue for a further month.

To be eligible for this extension, employees must have been on the payroll by 30 October 2020, but they don't need to have been furloughed before.

Businesses will have flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

In addition, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. Also, £1.1bn is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

A grant available to self-employed people affected by coronavirus has also been doubled to 40% of profits, with a maximum grant of £3,750 over a three-month period.

To give homeowners peace of mind too, mortgage holidays also will be extended.  Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

 Chancellor Rishi Sunak said:

“Over the past eight months of this crisis we have helped millions of people to continue to provide for their families. But now - along with many other countries around the world - we face a tough winter ahead.

“I have always said that we will do whatever it takes as the situation evolves. Now, as restrictions get tougher, we are taking steps to provide further financial support to protect jobs and businesses. These changes will provide a vital safety net for people across the UK.”