Rishi Sunak grilled over plans for 8% pension rise
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Furlough payments have kept millions afloat during the pandemic but new data from HM Treasury showed businesses are weaning themselves off the scheme. Rishi Sunak welcomed the news.
Today, HM Treasury published figures covering the months up until the end of June.
The data showed the fewest number of people are on furlough since the scheme launched in March 2020, down from a peak of nearly nine million at the height of the pandemic in May last year.
As it stands, there are around 1.9 million people on furlough, more than 500,000 fewer than the 2.4 million receiving support at the end of May.
Additionally, today’s ONS Business Insights and Conditions Survey (BICS) showed numbers may have fallen even further – with estimates that between 1.1 and 1.6 million people are still on furlough.
This news came as Mr Sunak visited Scotland to discuss the “economic strength of the union” and cover the Government’s Plan for Jobs.
Mr Sunak said: “It’s fantastic to see businesses across the UK open, employees returning to work and the numbers of furloughed jobs falling to their lowest levels since the scheme began.
“I’m proud our Plan for Jobs is working and our support will continue in the months ahead.”
The same figures from HM Treasury showed a “striking fall” in the number of young people on furlough, who for the first time ever, no longer have the highest take-up of the scheme.
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Over the last three months, younger people have moved off the scheme twice as fast as all other age brackets, with almost 600,000 under 25s moving off the scheme.
Jobs in sectors including hospitality and retail are now also moving off the scheme the fastest, – with more than a million coming off the scheme in the last three months.
This decline, according to the Government, means those in hospitality and retail no longer make up the majority of all those on furlough.
The furlough scheme itself was extended until the end of September to allow for businesses to adjust beyond the end of the roadmap and to bring people back to work.
However, ahead of this final deadline, companies and their staff will need to make one final adjustment.
From August 1, employer contributions to furlough costs will increase to 20 percent.
This contribution level will then stay in place until the scheme ends in September.
While the Government welcomed economic progress, many experts have warned a wave of redundancies could be on the horizon as employers see their costs rise.
Sarah Brill, a Financial Coach at Claro Money, commented on these worries in early July and issued guidance on what workers should do should the worst befall them: “While there is lots of optimism about life returning to some form of normality very soon, the value of being prepared and having a financial contingency plan for this shouldn’t be underestimated.
“Budgeting in advance, trying to reduce unnecessary outgoings, and using comparison sites for securing the best deals on household bills is the best place to start.
“Using a savings account to put money aside each month will mitigate the effects of sudden job loss and cushion the impact of a drop in income. Our recent research revealed that one in five UK adults have no financial cushion whatsoever and couldn’t pay the bills for a month if they lost their jobs, highlighting the need for personal finance best practice across the nation.
“Once the furlough scheme comes to an end, the worst-case scenario for many is that they will be working fewer hours than before COVID-19 or will have been made redundant.
“If you are anticipating being on a lower income after furlough, then go through your budget line by line to see where potential savings could be made. Take note of any specific dates that are relevant to you, such as payment holidays coming to an end or bill payments, and speak to your providers about this, as well as new plans or discounts available.”
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