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We all saw it coming, but Lockdown 2 was just officially announced. We wanted to give you near real-time information to make sure you could plan your finances as quickly as possible.
- What is Lockdown 2?
- Vacation is extended
- The job retention scheme is being expanded
- Mortgage holidays are given a six month extension
- Company grants for lockdown 2
- Independent support
- Lockdown measures for Scotland, Wales and Ireland
- The travel ban
- Total lock 2 rules
- Do you have any questions for us?
What is Lockdown 2?
It seemed inevitable – and it turns out that it is. We are facing a second national lockdown for one month from November 2nd, 2020 to December 2nd, 2020. The lockdown could also be extended – just like the first. The aim is to reduce the number of COVID-19 infections in order to protect UK citizens from the virus and the NHS so that they are not overwhelmed in an always busy winter season.
At the time of writing, there are still a few things to be announced. We will keep you updated as things develop!
The good news for those concerned about losing their jobs on the last day of the vacation program (today) is that they can stay on the program for another month. Better still, employers don’t have to bring in the 20% wage they paid in October.
That is, the government pays 80% of wages – just like in August. Your employer still has to pay your social security and pension contributions (as in August). This means companies are doing better now than they were in the October phase of the program.
You can go on vacation even if you’ve never been on vacation. Your employer can use the vacation program in November if he has not used it before. As long as you were on the RTI payroll on October 30, 2020, you can be on leave for November. Remember, if you are a new starter, it does not mean that your CONTRACT DATE was before the 30th. Your accounting team MUST have submitted your employee status to HMRC by midnight on the 30th.
I became superfluous
If you were made redundant in the last month of the original vacation program, there is a chance your previous employer can reinstate you. If you received your layoff pay TODAY (or since October 30, 2020), you were likely on the payroll as of the reporting date. This means that you could ask your employer to hire you and take you off for the next month. They don’t have to take you over, and when the deal is officially closed (as in the Companies House administration, rather than just closing doors) they can’t.
However, it’s still worth a try to ask. They may not do this as they need to cover NI and pension contributions. In theory, however, they can hire you if you were on their payroll on or after October 30th.
Flexible vacation is extended
Employers can also take advantage of flexible leave (the Coronavirus Job Retention Scheme or CJRS) as part of the new affordable version of the system. This means they can get you back to work for a few hours, and the government pays 80% of the wages for the hours you don’t work. Your employer MUST pay you full wages for all hours you work – and they are responsible for your social security and pension contributions for the full contract (not just the hours you work).
Mortgage Vacation Extensions
That is a big problem. The Financial Conduct Authority is due to officially announce this on Monday, but it has already been published in government guidelines.
If you have already applied for mortgage leave, you can top up your mortgage leave for a total of six months.
Those who have not yet applied for a mortgage leave can apply for a six-month leave from Monday. Wait for it to be official – lenders will take a day or two to get their processes started – but it should be up and running very soon!
Remember: this mortgage vacation won’t hurt your credit rating. However, the time you fail to pay will continue to accrue interest, which can add to the cost of your total mortgage owed. However, the price here is minimal given the short-term benefits (less stress is one of the big ones) of vacationing.
The FCA has not yet officially proposed that other consumer loans, such as credit cards and auto finance, extend their payment freezes. However, this announcement is expected to follow shortly.
Company grants for lockdown 2
Existing finance such as bounce-back loans will continue to be offered to businesses.
Companies in England that are forced to close due to Lockdown 2 can apply for a local grant based on their pro-rated site value.
- If the pro rata value is £ 15,000 or less, up to £ 1,334 per month (or £ 667 every two weeks) will be granted.
- Properties with a pro rata value between £ 15,000 and £ 51,000 will receive £ 2,000 per month (or £ 1,000 every two weeks).
- Individuals with a pro rata value greater than £ 51,000 will receive grants of £ 3,000 per month (or £ 1,500 every two weeks).
At the time of writing, there was no further information on expanding or expanding the self-employed support system. So far we know as before:
- The third SEISS scholarship will open on November 1st
- You must have been affected by coronavirus in your company as of November 1, 2020 to be eligible
- At least 50% of your income must come from self-employment
- You must have a tax return for 2018/19
- The grant is 40% of your average monthly profit for the tax years 2016/17, 2017/18, 2018/19
- Your average annual income for these three years must be less than £ 50,000
There is also a fourth SEISS grant in February 2021, the details of which are yet to be announced.
If you were not previously entitled to the SEISS grant, you are not entitled to this third grant. You may also not be eligible for this grant if, for example, business has been picking up in the past few months and you have not been affected by November 1, 2020 (or not as it will be in the future!).
Actions in Scotland, Wales and Northern Ireland
The decentralized administrations receive funds to further support the companies. How they will use the money earmarked for them by the Chancellor, as outlined in today’s announcement, is not yet known. We will update this section as soon as we have more information.
The vacation program can and will apply to all decentralized administrations. However, corporate grants are set on a regional basis.
The travel ban
All outbound travel is prohibited from November 5th to December 2nd, except for business purposes. This means that if you have booked a vacation during this time, you will not be able to leave.
Your tour operator should contact you in the next few days to make alternative arrangements. Remember, even if you only receive a postponement or credit initially, you are entitled to a full refund. When your vacation is ATOL protected, your credit is as safe as cash. If the company goes bust before your credit expires, you may be eligible for a refund. For now, though, it’s probably better to go for cash if you can.
However, if your vacation was a stay in the UK it may be more difficult to get a refund. It’s not impossible, but it could take a bigger fight! In these cases, you should opt for postponement or credit.
You cannot visit second homes either. This includes timeshare and vacation spots. If you pay basic rent, you may be eligible for a refund of part of the maintenance fee for the duration of the lockdown. 2. Contact your provider.
What are the rules for Lockdown 2?
Lockdown 2 begins on Thursday, November 5th, at one second past midnight. (Then our fireworks night is canceled!).
The rules of Lockdown 2 are pretty similar to the original March lockdown. However, there are some big differences:
- Schools, colleges, kindergartens and universities will remain open
- ALL outbound travel from the UK is prohibited except for work purposes
- Travel is highly recommended for work purposes only
- You can meet someone from outside your household for outdoor sports if social distancing is observed
- Single person households can select a household with which they would like to receive additional support
- No visiting other properties, staying with someone you do not live with, or visiting second homes
It took a while for these last two points to go into effect with the first lock, but they are officially in effect at the start of lock 2.
The other rules are similar to the first ban:
- Individuals who are clinically at risk or who are over the age of 60 should minimize contact with other people where possible, except for care or other assistance
- Non-essential businesses have to close
- Gyms, museums, libraries and similar shops must be closed (TBA: outdoor sports fields)
- All pubs, bars and restaurants must close, but takeaways and deliveries are allowed
- Work from home wherever possible. If this is not possible, your employer may choose to take you on leave (if you are eligible).
- All services must stop, but private services are allowed
- They are not allowed to mingle with other households in the house except for childcare and care requirements.
This Lockdown 2 is expected to end on December 2nd – but like the first, we could see it extended. This means that all of the financial plans mentioned here may (or may not) be extended. It is currently planned to end the lockdown using the tiered system that has been in place for a few months.
Do you have any questions for us?
At MoneyMagpie, we’ve been at the center of all of these changes and we’ve seen how it affects everyone’s finances, not to mention stress and anxiety. That’s why we do everything we can to talk about the major money problems of the year – things like debt, questions about vacation, and questions how to buy a home or get married – as much as we can. You’ve seen Jasmine in TV interviews and heard it on the radio – and it’s not going to stop anytime soon!
We want to make sure we’re answering the right questions – the questions you’re asking about your money worries. Jump on our Magpie messageboards to ask your burning questions – our team will be in touch as soon as we have an answer for you. Or you can find us on Twitter, Instagram and Facebook to talk to us and connect with other magpies as well.