Furlough scheme draws to an end from next week – Rishi Sunak’s changes explained

Rishi Sunak: There are no plans to extend furlough

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Furlough has provided support for millions of people amid the ongoing COVID-19 crisis. The scheme, offered by the Government, has covered the wages of individuals who are unable to work due to the pandemic. It has been particularly helpful for businesses which have been forced to shutter as a result of the virus.

However, as COVID-19 restrictions lift across the UK, the Chancellor Rishi Sunak announced the end of the scheme. 

A Treasury spokesperson previously told Express.co.uk: “The furlough scheme is in place until September – we deliberately went long with our support to provide certainty to people and businesses over the summer.

“The number of people on the furlough scheme has already fallen to the lowest level this year, with more than one million coming off the scheme in March and April – showing our plan for jobs is working.”

As the furlough scheme is set to draw to a close in September, Britons should be aware of the impacts on business.

Before July, the level of Government support was set at 80 percent of wages up to the value of £2,500.

However, this support has been gradually scaled back in efforts to wean businesses off the scheme.

In the coming month, similar to August, the Government contribution will be set at 60 percent of wages up to £1,875.

Employers will be required to cover employer National Insurance contributions, alongside pension contributions for their employees.

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With Government support reduced, employers will also need to cover 20 percent of wages up to £625 for their workers.

But because of this, Britons who are on furlough should not experience any disruption with their pay.

It will instead derive from two different sources – the Government and an employer – with rules dictating the same sum for individuals.

Employers, however many choose to top up their workers’ wages above the 80 percent total for the hours not worked.

However, this is optional, and must be done at an organisation’s own expense. 

There has been concern recently about what the end of furlough support will mean.

The conclusion of the scheme is set to coincide with the removal of other support measures such as the planned scaling back of Universal Credit – eliminating the temporary £20 uplift.

A survey undertaken by the London School of Economics (LSE) recently showed around one in every 16 businesses across the UK state they are at risk of closure over the next three months.

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With requirements to take on additional financial responsibilities due to the end of furlough, some are unsure how they will cope.

This could potentially lead to redundancies, and consequently, significant unemployment.

Peter Lambert, an author of the research, told The Guardian: “My bet is there will be more targeted support.

“Unless the economy really, really picks up, there’s going to be lots of people still left in the lurch in specific sectors.”

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