Johnson Extends Pay Support and Gives Six-Month Mortgage Holiday

U.K. Prime Minister Boris Johnson said he was extending the government’s wage support program as part of a new partial four-week lockdown for England and offered home owners more financial reprieve.

Under the package announced by the prime minister, state payments will be made to furloughed workers of as much as 80% of their wages through the new lockdown period.

Another key announcement involved those with a mortgage: Borrowers hurt by the virus will be entitled to a six-month mortgage holiday, and those who have already suspended payments will be allowed to extend the arrangement by the same period without it being recorded on their credit file.

Existing wage programs had been due to end this weekend and be replaced by less generous assistance. The extension will help workers with Covid-19 symptoms who might have gone to work to stay at home, slowing the spread of the virus.

The furlough plan has protected 9.6 million jobs since it began in March, with the latest figures putting the cost to the government at 41.4 billion pounds ($54 billion).

The Treasury said employers will only have to cover some tax contributions for their furloughed workers, a more generous system than the current rules which see firms have to pay 20% of their wages. In addition, companies forced to close in England are to receive grants worth as much as 3,000 pounds per month.

©2020 Bloomberg L.P.

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