In times of Covid, the UK continues to be an uncertain place. Despite national lockdowns and tier reviews, Chancellor Rishi Sunak has tried to provide businesses with as much certainty as he can. In December 2020, he announced that the furlough scheme has been extended until the end of April 2021.
But what does this mean? And if it affects you, what do you need to know? Let’s break it down.
When has the furlough scheme been extended until?
The furlough scheme, otherwise known as the Coronavirus Job Retention scheme, has been extended until the end of April 2021.
The scheme pays employees who are furloughed up to 80% of their salary, up to a maximum of £2,500 a month.
Rishi Sunak’s decision to extend the furlough scheme is designed to help businesses be able to make decisions in 2021 and hopefully avoid further redundancies being made.
Until a mass vaccination programme is implemented, many businesses can’t get back to normal. Furlough is designed to support millions of jobs in the hope they will still be there when we come out of the other side of this.
Can I be put on furlough?
The furlough scheme is for people who cannot do their job because their workplace is closed, or there is not enough work for them.
It is also for those who are unable to work because they are having to shield, or have caring responsibilities because of the pandemic.
So it doesn’t matter whether you are full-time, part-time, agency, flexible or on a zero-hour contract – you can be furloughed.
However, in order to be eligible, you must have been on your employer’s payroll before this latest extension was announced.
Is the scheme going to be extended again?
There has been nothing said as yet regarding whether the scheme could be extended again.
The hope is that by spring next year things will look a bit brighter. More people will be vaccinated, and the efforts we have all made over the winter will mean that businesses can return to normal.
But as we all know, with this ‘coronacoaster’ anything could happen.
What does this mean for my finances?
If you are now only on 80% of your salary, maybe undertake a budgeting exercise. This way you can see where you can adjust your expenditure to avoid going into debt.
Also, maybe look to reduce the cost of your existing debt. Could you secure yourself a 0% balance transfer deal in order to avoid costly interest charges?
Meanwhile, are the savings you have actually earning you any interest? With interest rates at record lows, maybe try to find yourself a higher-paying savings account.
Or, alternatively, start exploring investing for the first time. If you have savings that you don’t need immediate access to, you might look at a stocks and shares ISA. If you are willing to invest for the long term, this type of tax-free account could see you grow your money pot for the future.
For anything else coronavirus related, check out our coronavirus resources hub.
