Furlough extended until 30 April 2021

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Chancellor Rishi Sunak said the further extension would mean “certainty” for millions of jobs
David Cliff/NurPhoto/PA Images

The furlough scheme has been extended until the end of April 2021, the chancellor has announced.

Rishi Sunak said the additional month of the government grant, which covers 80% of the wages of workers who have been furloughed, would offer “certainty for millions of jobs and businesses”.

Alongside the furlough extension, government-guaranteed business loan schemes will be extended until the end of March. These had been intended to finish at the end of January.

“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,” said Sunak.

“We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support.”

The eligibility criteria will not change for the furlough scheme, and employers will only be required to pay wages, national insurance contributions and pension contributions for hours worked. They will also have to cover NICs and pension contributions for hours not worked.

It was announced that the scheme would be extended until the end of March at the start of November.

Simon Lyle, UK managing director of outplacement firm Randstad RiseSmart, said this would help companies avoid walking “off a cliff edge” in March.

“But we still have a problem. When furlough does end, employers will have to evaluate if they can afford employees back on their payroll. Inevitably many will decide that they can’t.

“To allow for a proper consultation period, companies will have to inform people by mid-March at the latest – that will be focusing the minds of CEOs and HR departments up and down the country.”

So far, the Coronavirus Job Retention Scheme has been used for 9.6 million jobs, according to Treasury figures.

However, the number of people on payrolls dropped by more than 800,000 in November compared to the start of the pandemic, according to the Office for National Statistics.

Redundancies also reached a record high in the three months to October, with the unemployment rate at 4.9%.

Earlier this week, HR’s professional body the CIPD called for furlough to be extended to the end of June, calling upon ministers to set out a long-term job protection plan beyond March.