Furlough is back. Here’s what it means for you.

The furlough scheme was supposed to end on 31 October. But it has been brought back to help people who might otherwise lose their jobs due to the new 4 week lockdown which starts on Thursday 5 November 2020. It’s a little confusing, as the government has reinstated the August version of furlough, so it’s not a straight extension of the October version. That’s a good thing, as it means it’s more generous and easier on employers.

Mortgage payment holidays have also been extended. Plus there are more grants for businesses that have to close during lockdown.

Here’s everything you need to know about the latest covid-19 financial support available:

At least one more month of furlough, and it’s better for employers and employees

The Coronavirus Job Retention Scheme (which we all know as furlough) will run through November.

Who can get it?

Anyone who was employed on PAYE payroll on 30 October 2020 can be furloughed. Whether you’re full-time, part-time or on a zero hours contract. If your employer made you redundant just before that date, ask them to reinstate you and put you on furlough instead (but be aware that this might not be possible).

Is is only available to people who were already on furlough?

No, anyone can use the scheme. It doesn’t matter if you have been furloughed before or not. As long as your employer has a UK bank account and pays you through PAYE, you can be put on furlough.

How much does it pay?

If you are put on furlough, you will get up to 80% of your salary, up to a maximum of £2,500. If you do any part-time work for your employer, then your furlough pay will take that into account and you’ll get furlough pay for the hours that you don’t work.

I’m worried about being made redundant, how can I persuade my company to put me on furlough instead?

Tell your employer that this furlough scheme is more generous than it was in October, so it will cost them less money. Your employer doesn’t have to cover any of your wages (unless you keep working whilst on furlough). They only have to cover your National Insurance and pension contributions, so that’s only about 5% of total employment costs.

Plus, you can still work for them if they need you to. Win-win.

Remind them that they can claim the Job Retention Bonus if they keep you employed until 31 January 2021. That gives them a £1,000 taxable bonus payment in Feb 2021.

Can I still work or does it have to be full-time furlough?

Yes, there’s total flexibility on how many hours you can still work for your employer. Your employer will have to pay you in the normal way for any hours you work. Then you’ll get furlough pay calculated based on the hours you don’t work.

Hang on, wasn’t furlough supposed to be replaced with a different scheme?

Yes, the Job Support Scheme (helpful that the names are confusingly similar!). It’s been put on hold until this new furlough extension finishes.

Mortgage payment holidays extended

Mortgage payment holidays have been extended for up to a total of 6 months.

Already on a mortgage payment holiday?

If your bank has already given you a mortgage payment holiday, then you can extend it until you reach a total of 6 months deferred payments. So if you asked for a mortgage holiday in July, you can pause payments for a full 6 months, until Feb.
Of course, you don’t have to take the full amount of time – it’s up to you.

Haven’t taken a holiday yet, but think you might need one?

The good news is that you’ve still got time. The scheme was supposed to end on 31 October, but now you can still ask your bank for a payment holiday that lasts for up to 6 months from now.

Already taken a 6 month holiday and still struggling?

Get in touch with your bank as soon as you can and talk to them about a repayment plan that you can manage.

Will a mortgage payment holiday affect my credit score?

Technically, it should not show up on your credit file. However, you might be asked about it directly by a lender if you apply for any loans or credit cards, so it could impact your ability to get another loan. That’s why it makes sense for you to take a payment holiday only if you actually need it.

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