UK furlough scheme extended until September 

BUDGET 2021: UK furlough scheme extended until September 

Budget 2021: The UK’s furlough scheme has been extended until the end of September, Chancellor of the Exchequer Rishi Sunak (pictured) confirmed in the Budget today (3 March).

The Coronavirus Job Retention Scheme (CJRS), which currently pays 80% of furloughed employees’ wages up to £2,500 per month for hours that cannot be worked due to the pandemic, had been due to end next month.

Under the plans, the same terms will be applied until the end of June. Employers will then be expected to contribute 10% of wages paid out through the scheme in July and 20% in August and September as businesses reopen.

Kate Smith, head of pensions at Aegon, welcomed the news: “Over 11 million employees have benefitted from the CJRS since it started in March 2020 peaking at 8.9 million in May.”

She added: “The 4.7 million employees currently on furlough, and the 41% of employers currently using the scheme, will be hugely relieved to hear that Rishi Sunak is extending the scheme until the end of September.”

Smith said the extension was good news for both jobs and pension saving as furloughed employees would continue to receive employer contributions as long as they do not opt-out of their workplace pension.

“The job retention scheme has meant that workplace saving has been remarkedly resilient. The true impact will only be known once the support thaws and melts away altogether,” she added.

Musab Hemsi, partner at specialist HR and employment lawyers LexLeyton, warned that employers would need to prepare for the end of the CJRS in good time, “particularly bearing in mind the statutory time periods for collective consultation in the event of large-scale redundancies”.

“In the details of the ‘winding down’ of the scheme, we hope to see a continuation and extension of the scheme’s flexibility,” he said. “In particular, re-introduction of the scope of furlough to include individuals working their notice would be a significant benefit to employers, with so many workers moving jobs. Flexibility is essential to help businesses plan their own recovery.”