With many jobs being affected by the Coronavirus pandemic throughout recent months, approximately 7.5 million people have sought help from the UK’s Furlough Scheme, which launched back in March.
Officially known as the Coronavirus Job Retention Scheme, employers have been able to claim a grant of up to 80% of an employee’s monthly wage, capped at £2,500, who are unable to continue working.
With over 900,000 companies using the UK furlough scheme, the Chancellor of the Exchequer, Rishi Sunak, recently announced that he was extending the furlough scheme from what was initially planned as June until the end of October 2020.
Costs of the UK Furlough Scheme
Despite the spiralling costs of the UK furlough scheme from the taxpayers, estimated to amount to over £80bn according to Paul Johnson, director of the Institute for Fiscal Studies, it will continue to help those in need through to autumn.
Paul Johnson told the BBC,
To put that in context, in eight months, that is more than we spend on the education system in an entire year, it’s many times what we spend on the police, it’s many times more than we spend on social care, it’s about half what we spend on the whole NHS in a year.
Changes to the UK Furlough Scheme
Starting from August, workers who can return to work on a part-time basis can still claim 80% of their wages through the UK furlough scheme, however companies will be expected to contribute a proportion of this cost themselves.
It is speculated that employers may be required to fund 20% of the wage, while the government will continue paying the remaining 60%.
The Treasury have commented,
The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.” The chancellor is expected to provide more details on this in the coming weeks.
How does this impact workers?
The proposed extension to the UK furlough scheme helps provide some financial peace of mind for those who are unable to work because of coronavirus, and a slow return to employment duties for those who can attend on a part-time basis from Summer.
Concurrently, this extension opens more available time for people to re-evaluate their short- and long-term goals and consider up-skilling to further their career and improve future employability.
However, the risk lingers that some employers may have to make redundancies to survive in the long run, causing employees to apply for universal credit. Remember, if you or someone you know is faced with being laid off work, Zoek is here to help get you back on track with your UK job search.
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