The Chancellor Rishi Sunak has announced the furlough scheme has been extended to April 2021.
Sunak also confirmed he would be continuing the government-guaranteed Covid-19 business loan schemes until the end of March.
The changes come ahead of the Budget, which will take place on March 3 next year, Sunak said, and will look ahead to how the government will tackle the pandemic and protect jobs.
Sunak said: “Our package of support for businesses and workers continues to be one of the most generous and effective in the world – helping our economy to recover and protecting livelihoods across the country.
“We know the premium businesses place on certainty, so it is right that we enable businesses to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our plan for jobs.”
Business secretary Alok Sharma said: “While our loan schemes have provided a vital lifeline to millions of firms across the country, we know that business owners need additional certainty as we head into the New Year.
“Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.”