It seems like we’re all glued to our screens either refreshing the news, taking calls from concerned family, or checking up on our friends. “Did you see the latest press conference?” is a daily question. There’s no doubt that these are challenging times and we’re all looking for any answers we can get; but it can be difficult to understand what those answers actually mean, especially when it comes to economic measures.
Recently we’ve all had to retreat home and self-isolate in an effort to curb the spread of Covid-19. While some of us are lucky enough to work from home, others are not; many are already out of a job or a business. Over the past two weeks the UK government announced some relief measures and we wanted to break down what they actually mean for the everyday person.
Coronavirus Job Retention Scheme
If you’re stressing about your employer having announced potential redundancies in the coming months and you think you could be laid off, this applies to you. The job retention scheme will allow your employer to get support from the government to pay up to 80% of your salary. The grant is capped at £2,500/person a month.
It’s an attractive option because it’s not a loan, so your employer doesn’t have to pay it back and your employer doesn’t have to fork out the 20% difference in order to qualify for it. It’s money that any business in the UK can apply for no matter how big or small.
Increase In Universal Credit
If your financial situation has changed because of Covid-19, you could now be eligible for universal credit. The minimum income floor, which is the minimum amount of money that you need to earn each month to qualify for universal credit, has been suspended. Those of us who are not eligible for Statutory Sick Pay (SSP), who are self- employed, or earning below the Lower Earnings Limit of £118 per week, or those of us who are self-isolating after having tested positive for Covid-19 are eligible to make a claim.
Additionally, they will be adding an extra £1,000 to the scheme over the next 12 months. Depending on your age, who you live with, and a few other factors you are eligible to receive between £342.72 - £498.89 a month.
You do not have to go to a job centre in person, you can call or go online here to apply.
Delays In Self-Assessment (Tax)
Individuals who are self-employed and who are facing economic hardship can benefit from the deferral of Income Tax payments. The second payment on accounts which was due in July 2020 is now deferred until 31 January 2021.
Increase In Housing Allowance
If you’ve experienced a pay cut or completely lost your job because of Covid-19 and you’re worried about not being able to make rent payments, you will not be forced out of your home as the government has banned evictions for the next three months. Additionally, the local housing allowance has increased so that it covers up to 30% of the market rent in your area. You will be able to claim this benefit as part of the Universal Credit scheme.
If you’re a landlord and you’re worried about how the eviction ban will affect you, or if you simply have a mortgage that you can no longer afford to pay because of complications from Covid-19, you can apply for a three month mortgage holiday to stop your payments.
Interest will still build up on the money you haven’t paid, but your credit score will not be negatively affected. To set this up, you will have to contact your lender directly over the phone or check your lender’s individual website to see if they have an online portal.
These economic measures will provide some relief but things are constantly changing, so continue to do everything you’re already doing - stay up-to-date with the news, read through the government official website, and watch the daily press conferences. We’ll continue to update you as things change.
Stay safe and stay well.