At a time when many people in the Uk, and indeed all around the world, are living with so much uncertainty brought by the coronavirus outbreak, it is reassuring that governments in some countries are stepping up and introducing stimulus packages and financial and tax changes to help relieve the financial pressure.
To date (27 March), a number of policies and aid packages have been introduced throughout March, to help protect Britain’s economy and to help individuals and businesses to stay afloat during these difficult times. The total financial aid pledged by the UK government is worth £65.5 billion pounds.
Here’s a summary of what has been pledged
1. Help for the Unemployed Due to Self-Isolation
It is estimated that 20% of British employees may be out of work at the peak of the coronavirus outbreak. On the 11 March, the government stated that it will extend statutory sick pay to all people who stay off work in order to self-isolate, even if they do not have symptoms.
2. Help for the Self-Employed
Self-employed people will be able to claim benefit payments with the government temporarily removing the minimum income floor from Universal Credit to ensure that people who cannot work are able to pay for their bills and essentials.
On the 26 March, the government went even further and announced that about 3.8 million workers – from hairdressers to cleaners, will be eligible for the grants for the self-employed
3. Help for Vulnerable People
A £500 million “hardship fund” is being made available for local authorities to spend on protecting vulnerable people in their areas.
4. Help for Small Businesses
Businesses that employ fewer than 250 people will be entitled to government refunds on any sick pay they give to their employees over two weeks.
Business rates are also being abolished for thousands of SMEs that are likely to be negatively affected during the virus outbreak. This applies to businesses with a rateable value of less than £51,000.
5. Help for those Temporarily Unable to Work Due to the Coronavirus Outbreak
On the 20th March, the government launched a significant stimulus package to help stabilize the British economy which included the unprecedented policy of the government paying the wages of all UK workers.
This was further outlined on 26 March when it was announced that there would be £7 billion of extra welfare spending and the government would pay 80% of salaried employees’ wages up to a maximum of £2,500 a month.
The Treasury said the government will also cover employers for the National Insurance and minimum auto-enrolment pension contributions of absent workers, saving firms an average of £300 a month.
Furthermore, to help businesses pay people and keep them in work, VAT payments for the next quarter are to be deferred meaning businesses don’t pay VAT until the end of June and then they have until the end of the financial year to repay those bills.
6. Help Provided by the Bank of England
On 11 March, The Bank of England cut interest rates from 0.75% to 0.25% in an emergency move to boost the economy. These cuts will affect borrowers differently depending on the type of mortgage they have. Check on Propillo for further details on how it might affect your loan repayments.
It also unveiled a scheme to provide cheap funding directly to commercial banks to incentivize them to support struggling small to medium-sized businesses.
The coronavirus crisis has transformed the UK economy at a stroke and it is hoped that these stimulus packages will help ease the growing financial strain on individuals and businesses in the UK.
If you would like information about mortgages during these troubling times, visit Propillo for fast and reliable advice.