When does furlough end in UK 2021? Date payment scheme stops - and will there be an extension

11 million workers claimed support over the Covid lockdowns

The Government’s furlough scheme has been hailed as a “job well done”, supporting 11.6 million workers, at a cost of £70 billion.

The Resolution Foundation said the scheme, which ends this week, has subsidised 2.3 billion working days.

Sign up to our Money Savers newsletter

The i newsletter cut through the noise

The think tank added that the country is set for a “bumpy” autumn as the end of furlough coincides with rising energy bills and the £20 a week cut to Universal Credit.

Its study found that over the past 18 months the Coronavirus Job Retention Scheme (JRS) has cost roughly equivalent to the schools budget for 18 months.

So when does furlough end and will there be financial support after the job retention scheme?

What date does the furlough scheme end?

Furlough draws to a close on September 30, amid warnings that businesses may need further help as the year progresses.

Economists have warned that although many may find work in recovering sectors such as hospitality and travel, there is also likely to be a rise in unemployment due to new redundancies.

Chancellor of the Exchequer Rishi Sunak announced the furlough scheme in March 2020 (image: Leon Neal/Getty Images)

One million workers are still expected to be receiving support through the financial scheme at the end of September, according to the latest Office for National Statistics (ONS) estimates.

Alan Custis, head of UK equities at Lazard Asset Management, said the rate of unemployment, which dropped to 4.6% last month, is likely to swing higher again.

“There will also be a percentage who choose retirement over returning to work, but we would expect the unemployment rate to settle at around 5% for the year end, before falling in 2022,” he said.

Mr Custis added that other countries, such as the US and Australia, saw unemployment spikes when similar financial support for workers came to an end.

The end of furlough also comes amid record UK vacancy figures, with the latest Office for National Statistics data for August reporting more than one million available jobs for the first time on record.

There have also been significant hiring sprees amid labour shortages for HGV drivers, warehouse staff and food production workers.

Nevertheless, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said he has “doubts” as to whether broader consumer demand will have jumped enough by October to re-employ all staff who remained on furlough.

As a result, the Liberal Democrats have called for furlough support to be extended for the 10 most affected sectors to avoid a “tidal wave” of job losses.

In a letter to Mr Sunak, Liberal Democrat Treasury spokesperson Christine Jardine said furlough should be extended for another six months for the 10 sectors, which include air travel and photography, in a move it claims would cost around £600 million.

We want to hear from you: let us know what you think about this story and be part of the debate in our comments section below

How did the furlough scheme work?

The furlough scheme started with the government contributing 80% towards pay packets up to £2,500 - and employers could choose whether to pay an extra 20% wage top up but they didn’t have to.

From July 2021, government contributions then fell to 70% of wages up to £2,187 and from August and September the government paid 60% towards wages.

Businesses could also bring furloughed employees back to work part-time while still claiming a flexible furlough grant from the government.

Thousands of businesses have been closed until further notice due to the pandemic with staff members put on furlough.

Employers could claim furlough payments for their workers, as long as they were employed through the PAYE system.

Will there be an extension to the fulough scheme?

There won’t be an extension to the furlough scheme but on September 30 the Government launched a new £500 million scheme to help vulnerable households over winter.

The Household Support Fund will be distributed by councils in England which can assist the community through small grants to meet daily needs such as food, clothing and utilities, the Department for Work and Pensions (DWP) said in a statement.

Britain’s Work and Pensions Secretary Therese Coffey (image: Ben Stansall/AFP/Getty)

The funding will be made available to local authorities in October.

The DWP said the Barnett formula will apply in the usual way to additional funding in England, with the devolved administrations to receive up to £79 million of the £500 million.

Work and Pensions Secretary Therese Coffey said in the statement that the Government has “helped millions of people provide for their families” over the last year.

A message from the editor:

Thank you for reading. NationalWorld is a new national news brand, produced by a team of journalists, editors, video producers and designers who live and work across the UK. Find out more about who’s who in the team, and our editorial values. We want to start a community among our readers, so please follow us on Facebook, Twitter and Instagram, and keep the conversation going. You can also sign up to our newsletters and get a curated selection of our best reads to your inbox every day.