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What would a circuit breaker lockdown involve?

As coronavirus cases continue to rise, speculation is rife that a ‘circuit breaker’ lockdown could be implemented in England. It’s a possibility if the three-tier system of local lockdowns does not halt the spread of the virus.

What does a circuit breaker lockdown mean, and what would it involve? Let’s find out.

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What is a circuit breaker lockdown?

A circuit breaker lockdown is a kind of a pre-emptive mini lockdown with a set of strict measures and restrictions imposed for a brief time period to bring down the rate of infection.

This kind of lockdown would be less damaging to the economy than the months-long lockdown we’ve already experienced. That’s because a circuit breaker is only aimed at interrupting the spread of the virus and providing the authorities time to come up with a better long-term plan.

What sort of measures can be expected?

The restrictions of a circuit breaker lockdown would mainly focus on preventing people from assembling in high-risk areas and socialising in spaces where they might spread the virus.

This would reduce the spread of new infections and reduce the need for a full lockdown.

So, we can expect measures like:

  • Strict restrictions on households mixing
  • A ban on non-essential travel, with people being encouraged to work from home and avoid public transport
  • Closure of pubs, bars, entertainment venues and non-essential shops (including clothes shops, gyms and casinos)

Essential shops and services like supermarkets, food takeaways and deliveries, pharmacies, pet shops, hardware shops, banks, petrol stations, and post offices would likely remain open.

How long would it last?

The circuit breaker would last for a minimum of two weeks.

The two-week threshold is based on the fact that if it was shorter, those infected before the start of the circuit breaker lockdown would still be able to pass on the virus before it ended.

If it was to last longer, it would lead to an even greater reduction of cases. However, this would be at the expense of negative economic impacts on people and businesses.

Has a circuit breaker lockdown been used elsewhere?

Yes it has.

Singapore was the first country to implement a circuit breaker lockdown back in April in an effort to curb escalating infections rates. The government forced non- essential workplaces to close, and schools were moved to full home-based learning.

New Zealand also implemented its own sort of circuit breaker lockdown back in March that saw the closure of non-essential services including bars and even restaurants. The lockdown was quite successful in helping bring infection rates in the country under control.

Israel is currently under a circuit breaker lockdown after its previous traffic light-style system (similar to England’s 3-tier system) failed to slow down infection rates.

Here in the UK, Northern Ireland has already imposed circuit breaker restrictions on its residents, which started on 16 October. Wales has announced that it will also go into a two-week circuit breaker lockdown (or firebreak lockdown) from Friday 23 October.

Your money and the lockdown

While any kind of lockdown comes with a great deal of inconvenience, there is a silver lining. A lockdown can give you time to sort out your money matters. Here are a few great money moves worth considering should we find ourselves in another lockdown.

1. Check your expenses and save up, just in case

It’s a sad fact that across different sectors of the economy people are losing jobs. Many others have seen their hours and their wages reduced. We still don’t know how much worse things might get.

With this in mind, now might be a good time to trim your expenses and set up an emergency fund to prepare for whatever may lie ahead. Put aside as much as you can afford to make sure you always have access to funds should you need them.

2. Pay off your debts

You’re unlikely to be going out much during lockdown, so you should be able to save more. It’s a good idea to use some of this money to clear your debts, starting with your credit card.

To make savings, you can transfer your credit card debt to a balance transfer card that gives you a period of 0% interest.

3. Invest

If you have taken care of all your essential expenses, have a healthy emergency fund and can endure the ongoing market volatility, now might be a great time to invest any spare money you have in good quality stocks.

Needless to say, investing in the stock market comes with a risk of loss. But at the same time, it comes with the potential of strong returns in the long run, particularly when the market recovers.

As always, do your homework first. If you do decide to invest, consider opening a stocks and shares ISA where profits of up to £20,000 will be tax free.

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