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Furlough is a term many of us have become familiar with during the coronavirus pandemic. The government has used it to help protect payrolled jobs that might otherwise have been lost because of the lockdowns and restrictions that have stopped many sectors operating normally.
When you are placed on furlough, you temporarily stop working but keep your job. During the pandemic, the government has funded companies to pay their employees while they are furloughed through its Coronavirus Job Retention Scheme.
Alongside full furlough, when you do no work at all, you can also be placed on flexible furlough. That means you work some of your usual hours and are placed on furlough for the rest of them. As well as employees, agency workers, people on zero-hours contracts and apprentices are all eligible for furlough. If any of these apply to you and your job is at risk, it’s worth asking your employer to look into the furlough scheme if they haven’t already.
When the scheme was introduced in March the government paid 80% of an employee’s wage up to £2,500 per month. The employer could then decide whether to top this up to 100%. Since July the scheme has been tapering off. By October the government was paying only 60% and employers adding 20% or more.
But to support companies during the November lockdown the government will go back to covering 80% of a worker’s regular wages. That’s the amount you are paid each month through PAYE. You do not need to have been furloughed previously to be eligible. However companies will have to pay pension and national insurance contributions, which they didn’t have to first time around.
The scheme will continue until the end of March. Once it ends businesses will be able to apply for the government’s Job Retention Scheme, which will cover varying proportions of an employee’s wages depending on whether a business is open or not.
Events are moving quickly, so it is worth keeping an eye out for changes to what is being provided and for how long.
Once you are on furlough there are some restrictions on what you can do. You cannot undertake any tasks or activities for your employer or an organisation linked to your employer. If you are on flexible furlough you can’t use your furloughed hours for paid work.
However, you can volunteer for another employer or organisation and enhance your skills through training or online courses.
If you aren’t covered by the furlough scheme, you may be able to access other support. The government’s Self Employment Income Support Scheme will pay you 80% of average profits for November, December and January capped at £7,500 in total. But to apply you must have been eligible for the first two grants offered earlier this year, which means you will need to have completed self-employed tax returns dating back to 2018-19.
Employers can also get extra help. For example, if they are forced to close they can apply for a Local Restrictions Support Grant of up to £3,000 per month.
To help encourage young people into work, businesses can also apply for £1,500 for each out of work 16-24 year old given a six-month work placement. They will also receive £2,000 for every under-25 apprentice taken on until the end of January and £1,500 for those over 25.
If you need help paying your mortgage, lenders have also agreed to extend the mortgage payment holidays available to borrowers for up to six more months.
It is a hugely difficult time and many people will not get the financial support they need. Even for some who do, it may not be enough to keep them afloat. If you are struggling, there are lots of charities that offer free advice on how to reduce expenditure and manage your debts.
Selling your house is one way to quickly put yourself in a stronger financial position. It is many people’s biggest asset which has the potential to release a lot of value. The mortgage payments you have to make will also stop.
It’s a big decision that isn’t right for everyone. And you should always make sure you have somewhere to move to once your home is sold. But if you do decide to go ahead, selling your home to us is an option worth considering.
We are used to buying homes in difficult circumstances and can complete a sale in just seven days if necessary. That means you’ll quickly have access to funds. What’s more we’ll arrange solicitors and pay their fees. And because we don’t use estate agents you won’t have to pay their commission either.
Get in touch if you’d like to talk about how we can help you.