How the Job Support Scheme changes will impact you

Chancellor Rishi Sunak revealed changes to the Job Support Scheme (JSS) yesterday, which will see thousands of workers impacted by the Coronavirus pandemic get more financial support from the Government.

Under the changed JSS, the employee must work a minimum of 20% of their normal hours. Their employer must pay 5% of wages and the Government will pay 61.67% of the wage, resulting in the worker seeing their pay fall by 33%. To apply for this scheme, the business must be affected by restrictions introduced to reduce the spread of the Coronavirus pandemic.

Employees of businesses that have been forced to close as part of Tier 3 restrictions will have 67% of their wages paid by the Government, which means they will see their overall wage fall by 33%.
For those who are self-employed, the Government is offering a grant of up to £3,750, covering the period of November to January. The Government has also said its plans to launch a second grant to cover the period February to April, but has not yet said how much will be made available in this second grant.

Although a more generous JSS payment has been announced, many consumers who have been struggling with reduced incomes due to the pandemic will face further difficulties as applications for payment holidays on mortgages, as well as loans and credits cards, are due to come to an end on the 31 October 2020. Consumers who are able to start making repayments on their mortgages, loans and credit cards are encouraged to do so as soon as possible.

Consumers still facing financial struggles due to the pandemic should consider contacting their lender to discuss options available to them, although they should be aware that any payment holidays applied for after the end of October may have an impact on their credit score. Alternatively, consumers can consider options such as transferring credit card balances to an 0% transfer credit card, as well as contacting a mortgage broker to discuss the possibility of remortgaging at a lower rate.