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Coronavirus: what economic support is the government currently providing for individuals?

Since the first UK-wide lockdown, the UK and devolved governments have provided support for businesses and individuals.

Rishi Sunak

On 4 January 2021, the UK government announced a new ‘lockdown’ for England. This is the third time since March 2020 that restrictions have been introduced covering the whole of England.

The devolved administrations have taken similar action. In mainland Scotland, since 5 January, individuals may not leave home for anything other than essential purposes. Wales has been under a ‘stay at home’ order since 20 December 2020, and Northern Ireland since 26 December 2020.

Since the first UK-wide lockdown in March 2020, the UK and devolved governments have provided support for businesses and individuals affected by the disruption of the pandemic. Many of the measures introduced last spring have been carried over into 2021.

Our earlier explainers detail the measures introduced during the first lockdown, for businesses and individuals, as well as the actions taken by the Bank of England. This explainer summarises the support currently available to individuals; another looks at current support for businesses

The government’s support for individuals includes:

  • subsidising the wages of employees who are unable to work due to restrictions
  • grants for self-employed people
  • programmes to help unemployed people back into work
  • an increase in the generosity of benefits for those out of work or on low incomes.

Support for employees

The Coronavirus Job Retention Scheme (CJRS, or ‘furlough’), first introduced in March 2020, has been extended until April 2021. When the furlough scheme started in the first lockdown, the government paid businesses up to 80% of the payroll costs for workers who were furloughed (including wages, employer National Insurance and pension contributions required by the government’s auto-enrolment policy).

In the summer and autumn of 2020, employers were required to take on more of their payroll costs, paying National Insurance and pension contributions from August, 10% of wages in September and 20% of wages in October. In the third lockdown, the furlough scheme has returned to covering 80% of an employee’s wages for hours not worked, but employers continue to cover National Insurance contributions (NICs) and government- mandated minimum pension contributions.

Support for self-employed people

The government has extended the Self-Employment Income Support Scheme (SEISS) until April 2021. A grant will be available to cover 80% of pre-Covid average trading profits between November 2020 and January 2021, capped at £7,500. A further grant to cover the months of February to April will be made available later in the year.

In addition, some of the devolved administrations have introduced extra support for self-employed people. In Northern Ireland, the Newly Self-Employed Support Scheme is available until 5 February 2021. This offers a one-off taxable grant of £3,500 to those who commenced trading as self-employed between 6 April 2019 and 5 April 2020 (which makes them ineligible for SEISS).

In Wales, the Business Wales Barriers Grant offers a grant to unemployed people considering self-employment. Individuals can apply for up to £2,000 to contribute towards the essential costs of starting a business. The scheme will close in March 2021.

Job support

UK unemployment rose from 4% in the period January to March 2020 to 4.9% in the period August to October 2020[1] – and is expected to rise further when the CJRS and SEISS end. The government has put in place extra measures to support unemployed people find work.

Kickstart scheme

The £2 billion Kickstart scheme opened in September 2020 and aims to help young people (aged 16–24) into work. The government will cover 100% of the age-relevant National Minimum Wage, NICs and automatic enrolment pension contributions for six-month work placements. 

Job Entry Targeted Support (JETS)

The JETS programme was launched in October 2020. It gives six months of tailored support to people who are unable to find work within the first three months of unemployment. The support includes CV and interview coaching.

Extra support for those on low incomes or without work

Self-isolation payments

Workers in England on low incomes who cannot work from home and have been asked to self-isolate by NHS Test and Trace – either following a positive test for Covid-19, or because they have come into close contact with someone who has tested positive – are eligible for £500 self-isolation payments.   

In England, this scheme is administered by local authorities, and there has been some concern about a ‘postcode lottery’ for payments. Recent research has shown significant differences in the proportion of applications approved by each local authority,[2] suggesting that some low income workers may be missing out on support because of where they live.

Wales also has a Self-isolation Support Scheme. This offers payments to individuals contacted by NHS Wales Test and Trace, following a positive test or a close contact having tested positive. It also supports parents of school-aged children (up to and including Year 8) or children with complex needs (up to the age of 25) if their child is asked to self-isolate.

Uplift in Universal Credit and housing benefit

Universal Credit and housing benefit continue to be more generous. The £20-a-week uplift in Universal Credit (also applied to the basic element of tax credits) is due to apply until April 2021, after which it will return to its previous level.

The increase in housing benefit to cover the cheapest 30% of rents in a local area will last until April 2021; it will then be frozen in cash terms.

Other support

Renters benefit from a ban on evictions until after 21 February 2021. Tenants can only be evicted by court bailiffs in very limited circumstances.

  1. Office for National Statistics, Unemployment Rate (aged 16 and over, seasonally adjusted), (Accessed 26 January 2021).
  2. ‘Workers asked to self-isolate via NHS Test and Trace face postcode lottery when claiming compensation, new CPID research shows, CPID, 15 January 2021, (Accessed 26 January 2021).
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