Rishi Sunak unveils new jobs scheme

Here’s our take on the chancellor’s plan to support workers and firms.

Lee Wild, Head of Equity Strategy, interactive investor, says: “The government’s new job support scheme goes some way to preventing a new wave of job losses that many feared once the furlough scheme winds up at the end of October. That help for the self-employed has been extended will be a relief to millions more workers. The extension of government guaranteed loans taken during the crisis will also provide relief to many businesses struggling to survive during the pandemic. 

“However, it does not go as far as furlough did to support affected employees, and thousands more jobs will be lost in the months ahead. There remains a serious risk to the future of Britain’s core services sector as the government brings in more restrictive measures to stop the second wave of Covid-19. If these don’t work, further lockdown measures will be necessary, heaping further pressure on the beleaguered UK economy, just as Brexit discussions reach a critical point.

“Equity traders responded positively to the chancellor’s statement, although markets remain fragile and any further gains will be hard won. Sterling is higher than it was at the beginning of the day, but it remains unclear whether today’s news will put a floor under the currency.” 

Moira O’Neill, Head of Personal Finance, interactive investor says: “Today’s new support scheme will bring a mixture of financial relief for the short-term, but trepidation for the long haul ahead when the next round of support runs out.

“This is a time for bunkering down. If you can reduce or find cheaper debt, or mortgage, do. If you have any spare cash to save, stash it away – not under the mattress, but in a tax efficient ISA, seeking out the best rates to help stop the value of your money being eroded by inflation. 

“The importance of cash to fall back on has never been more abundant, and three to six months should be a minimum - far easier said than done. Save while you can, invest while you can, and cut costs while you can. If you have a decent emergency fund, you can then afford to begin or finetune a long-term investment plan.

“Nervous investors should invest monthly, because it smooths out some of the highs and lows in the price of shares – and interactive investor offers a free regular investing service. Multi asset funds are a good place to start, which spread risk across asset classes. We like the ultra low cost Vanguard LifeStrategy 20%, 60% and 80% equity funds. For investors who want active low cost investment with a sustainable focus, we like the BMO Sustainable Universal MAP range, which has a cautious, balanced and growth option.”