New Job Support Scheme

A new UK Government Job Support Scheme has been announced, with the intention of protecting jobs in businesses facing lower demand over the winter months because of Covid-19. The scheme will open on 1 November 2020 and run for 6 months, ending in May 2021.

To be eligible, an employee must work at least a third of their normal hours, paid for by their employer. The hours not worked will be subsidised by the government and the employer, each paying a third of the remaining hours. The amount the government will pay is subject to a cap of £679.92 per employee each month. Employees do not need to have been part of the Job Retention Scheme which is due to end on 31 October to be eligible.

It is important to note that employees cannot be made redundant or put on notice of redundancy during the period in which their employer is accessing the Job Support Scheme.

Businesses can still receive the Job Retention Bonus (£1,000 paid to employers for every furloughed employee brought back to work and continuously employed from 1 November 2020 and 31 January 2021) alongside the Job Support Scheme, as long as they meet all eligibility criteria.

Full details can be found on the GOV.UK website. 

New Self-Isolation Support Grant 

The Scottish Government has this week announced a new grant for people on low incomes if they are asked to self-isolate. The grant of £500 aims to provide support for people who would face financial hardship or lose income if self-isolating, for example, if they cannot carry out their work from home.

The fund will mainly be aimed at providing support for people in receipt of Universal Credit or legacy benefits, although there will be some discretion to make awards to others experiencing financial hardship.

Applications are due to open on 12 October, and will be delivered through the Scottish Welfare Fund which is administered by local authorities.

See the Scottish Government website for more information.

New FCA guidance for credit customers

The FCA has confirmed new guidance for firms offering different types of credit, which will come into force today (2 October).

The guidance states that firms are expected to offer a tailored package of support for customers who continue to be affected, or are newly affected by Covid-19. This includes working with customers who are approaching the end of a payment break, being flexible in support offered, and preventing customers’ balances from escalating once they have put in place a repayment arrangement by suspending, reducing, waiving or cancelling any interest, fees or charges necessary to make that happen. 
 
Overdraft customers

Arranged overdraft customers have until 31 October to ask their provider for up to £500 of arranged overdraft borrowing with no interest for three months. Customers who have already received this support have until this date to request it for another three months.
Customers who have this support in place will be contacted by their lender when this period is coming to an end to discuss what options are available for them.

Payment freezes

Customers have until 31 October to apply for a three-month payment freeze. When a payment freeze period ends, lenders will get in touch with customers to let them know what will happen next, including outlining further support that may be available.

Previous guidance that stated that agreed payment freezes wouldn’t be recorded on credit files will no longer apply, and any additional support customers receive after a payment freeze ends may be recorded on their credit file. Lenders should let customers know what the impact of further support on credit files will be.

Full details of guidance for each credit product can be found on the FCA website.