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The new ‘Kickstart Scheme’

On Wednesday 2nd September the Government announced the launch of their new £2 billion Kickstart Scheme, which is designed to create thousands of new jobs for young people. The Scheme is open to employers who agree to take on young people aged between 16 and 24 and who are currently in receipt of Universal Credit. They will be offered six-month work placements, with their wages being paid by the Government.

The Government will fully fund each ‘Kickstart’ job, paying 100% of the age-relevant National Minimum Wage, National Insurance and pension contributions for a minimum of 25 hours a week. Employers will be able to top up this wage, whilst the Government will also pay employers £1500 to set up support and training for each person on a Kickstart placement, as well as helping pay for uniforms, workwear, essential items and other set up costs.

The jobs will give young people – who are more likely to have been furloughed or been made redundant – with many working in sectors disproportionately hit by the pandemic – the opportunity to build their skills in the workplace and to gain experience to improve their chances of finding long-term employment.

Businesses of all sizes that are looking to create quality jobs for young people can apply and there is no cap on the number of places. Young people will be transitioned in to the new roles through their Jobcentre Plus work coach, with the first Kickstart employments expected to begin at the beginning of November. The Scheme, which will be delivered by the Department for Work and Pensions, will initially be open until December 2021 but the Government have indicated that they will keep the Scheme under review and will look favourably on an extension beyond December 2021 as the Scheme unfolds.

Around 700,000 young people are set to leave education and enter the job market this year, with a quarter of a million more people aged under 25 claiming unemployment benefits since March – with youth unemployment having a long-term impact on jobs and wages. The Kickstart scheme was announced as part of the Chancellor’s Plan for Jobs, which set out the biggest package of support for youth unemployment in decades – including tripling the number of traineeships, incentivising employers to hire more apprentices through a £2,000 payment to employers for every apprentice they hire under the age of 25 and investing in our National Careers Service so people can receive bespoke advice on training and work.

Employers can find more information about the Kickstart Scheme via this link:

Furlough Scheme reminder

The Coronavirus Job Retention Scheme (CJRS), commonly referred to as the ‘Furlough Scheme’, is winding down and the Prime Minister yesterday (2nd September) once again confirmed that the Government has no plans to extend it.

From 1st September, the Government will pay 70% of wages (down from 80% in August) up to a maximum cap of £2,187.50 for the hours the employee is on furlough. Employers must top up employees’ wages to ensure they receive 80% (up to £2,500) of their normal contracted employment remuneration. The caps are proportional to the hours worked. Employers will continue to be responsible for making PAYE and NI payments for each furloughed employee.

Employers can only continue to claim through the scheme if:

  • they have previously furloughed the employee for 3 consecutive weeks between March 1st and 30th June
  • they submitted the claim before 31st July

The CJRS is now closed for new claims

From 1st October, the Government contribution for employees on CJRS will drop to 60%, with employer contributions rising to a minimum of 20%.

The Scheme is currently scheduled to finish on 31st October, after which employers will once again be responsible for paying the full amount of wages/salary for each employee. Given this impending deadline we strongly urge all employers that have used the CJRS to urgently review their business/trading plans for Q4 of 2020 and for Q’s 1 & 2 of 2021.

Self-Employed Income Support Scheme (SEISS) reminder

From 17th August, millions of self-employed people whose livelihoods have been affected by Coronavirus have been able to claim a second payment of up to £6,570.

Over 2.7 million self-employed people benefited from the first stage of the SEISS, with the Government distributing £7.8 billion of grants to help them through the crisis. Those eligible are now be able to receive a second and final grant worth 70% of their average monthly trading profits, with the money set to be paid in to their bank accounts within six working days of making a claim. Anyone whose self-employed business has been adversely affected by Coronavirus since 14th July is eligible for the scheme.

HMRC aim to contact all potentially eligible customers to advise them that they can claim for a second and final SEISS grant – although it’s prudent to check in case HMRC miss you for some reason. The eligibility criteria remain the same as for the first grant, with people needing to have had trading profits of no more than £50,000, making up at least half of their total income.

Qualification dates have, however, changed so we strongly suggest that you check anyway by following this link here.

Proposals for further support for mortgage borrowers

The Financial Conduct Authority (FCA) has announced proposals to ensure that lending firms continue to provide tailored support to mortgage borrowers who continue to face payment difficulties due to Coronavirus. During the initial phase of the pandemic, payment holidays provided mortgage borrowers with immediate and temporary support. They have helped millions of consumers through the immediate impacts of the current emergency and helped lending firms provide support at unprecedented scale. The majority of customers who have had a payment holiday are expected to resume full repayment; however, many will remain in financial difficulty.

The FCA has published additional draft guidance for lending firms, to ensure that consumers – both those who have benefitted from payment deferrals under the current guidance who continue to face financial difficulties, as well as those whose financial situation may be newly affected by Coronavirus after the current guidance ends – get the support they need in these extraordinary times. Some consumers will continue to be impacted by Coronavirus while others will be newly impacted in the coming months. Consumers in these situations will benefit from lending firms providing them with the tailored support that is normally expected, which also needs to reflect the uncertainties and challenges that many customers will face in the coming months.

The current guidance will continue to provide support for those impacted by Coronavirus until 31st October 2020 – with consumers able to take a first or second three-month payment deferral. The FCA expects the current guidance to expire on 31st October but will keep this under review depending on how the wider situation develops.

The new draft guidance proposes that lending firms should consider the appropriateness, and use, of a range of different short and long-term support options to reflect the specific circumstances of their customers. This could include extending the repayment term or restructuring of the mortgage. Where consumers need further short-term support, lending firms should offer arrangements for no or reduced payments for a specified period to give customers time to get back on track. Under the proposed guidance, lending firms should prioritise giving tailored support to borrowers who are at most risk of harm or who face the greatest financial difficulties. Where borrowers require further support from lenders, either at the end of payment holidays under FCA guidance, or where they are in need of support for the first time, this would be reflected on credit files in accordance with normal reporting processes. This will help to ensure that lenders have an accurate picture of consumers’ financial circumstances and reduce the risk of unaffordable lending. Lending firms must be clear about the credit file implications of any forms of support offered to borrowers.

The FCA has now concluded their discussions with lenders and others and anticipates issuing new and formal guidance/regulations by the end of September. We will update you as soon as these are published.

We will issue further advice and guidance Bulletins as the Covid-19 situation develops.

Sir Henry Boyle

1500 hrs 3rd September 2020

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