The government has announced an expansion of the Job Support Scheme (JSS), which will kick in from 1 November.

As I mentioned in the analysis of the Winter Economy Plan a couple of weeks ago, the JSS initially proposed by the government will do very little to protect jobs as the onus is on employers to go above and beyond for their staff.

It would cost them more to keep two staff on part time than to have one full-time staff, for example.

But under the expansion, firms forced to close due to lockdown restrictions (both local and national) will get additional financial support that looks like it could actually help. To be clear, for struggling firms, things will still be tough, but there’s a bigger buffer this time round.

From 1 November, if a firm is forced to close due to lockdown restrictions, the government will pay 67% of each employee’s salary, up to £2,100 a month. The employer will only need to pay the relevant national insurance and pension contributions, which significantly reduces a business’s wage burden.

In addition, the government will also pay businesses cash grants of up to £3,000 per month while they’re closed – previously this was £1,500 every three weeks. This money is supposed to help with fixed costs such as rent, and the amount a business will receive will depend on their rateable value.

Both of these schemes give businesses a bit more cushioning and, crucially, are more inclusive. Businesses such as nightclubs will finally receive help – they wouldn’t have been eligible for support under the original JSS and grant schemes as they’re shuttered by national restrictions rather than local ones and their staff wouldn’t have been working at all.

The expansion will be available for six months, with a review in January, though businesses won’t be able to get the first payment until December.

What it means for you…

This expansion suggests a few very important things.

First, the UK government is willing to dig deeper to help. Just a couple of months ago Rishi Sunak announced that there would be no extension to the furlough scheme but now we not only have an extension but also an expansion of the extension.

For many, this support couldn’t come quickly enough, and doesn’t extend widely enough.

But for investment markets, this willingness to help will have had a much needed stabilising effect by reducing some of the uncertainty around survival of UK businesses. This is not just good news for investors, it’s also good for anyone with a pension, as many of these have an investment element.

Second, the Chancellor is listening. Some of those who missed out on earlier schemes are now covered under the current one. Not everyone of course, but then Rishi Sunak has never claimed to be trying to save every job – just as many as possible.

Third, the budget is stretched and strained.

The furlough scheme has gone from a comparatively generous 80% of salary to a meagre 67%, and the support has gone from a free-flowing handout to one that needs to be reviewed. A lot of money has been wasted during this pandemic, and now the purse strings are tightening.

All of this is little consolation for employees who struggled during furlough, and who may be affected again. Universal Credit may help some, but times will be tough.

And it won’t just affect those on the lowest income or those of a certain demographic – depending on the extent of the lockdown, it has the power to permeate every corner of society.

So if you haven’t already, take the time to review your finances and plan well for the months ahead.