Furlough has helped millions of people who may have otherwise lost their jobs due to the pandemic. The scheme, first introduced by the in March 2020, involved the Government covering 80 percent of wages for those unable to work due to coronavirus restrictions. While the scheme was scheduled to end earlier, the Chancellor announced in his Budget that it would be extended due to ongoing restrictions.
However, as the scheme is gradually phased out, there is a major change which is set to kick in on July 1, which is worth noting.
On this date, the Government is to drop its contributions to the scheme from 80 percent to 70 percent.
This means that people who are still on furlough will be getting their pay split further between two sources.
A total of 70 percent will be covered by the Treasury, up to a value of £2,187.50 under the scheme.
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Some fear the financial burden will be too much for certain organisations, who may cut jobs as a result.
Certain Britons may be staring down the prospect of redundancies, and employment may be at risk.
The extension of restrictions means many companies have been unable to open and have therefore been put under further amounts of pressure.
And this may be exacerbated by the further responsibilities companies will be required to take on in the near future.
From August, the Government will drop its support to 60 percent of wages up to £1,875.
This means businesses will have to step up to the plate to provide 20 percent of wages for hours not worked, up to £625.
The same will be true in September, the final month of the scheme before its scheduled end.
Some organisations, however, may have more financial stability which can enable them to help their employees further.
The Government explains: “You can continue to choose to top up your employees’ wages above the 80 percent total and £2,500 cap for the hours not worked at your own expense.”
Some have expressed concerns about how over 50s will be impacted by furlough coming to an end.
Ian Atkinson, director of marketing at SunLife said: “The impact of coronavirus has affected all age groups and people over 50 are no exception. It has affected their working lives, their health, their happiness and their finances.
“While people over 50 face a higher risk of falling seriously ill from coronavirus, furlough and finances are also a real concern for many especially as nearly one in ten have already lost their job.
“We know that people over 50 can also experience ageism in the workplace and may find it harder to secure a new role. Furlough and job losses have had a knock-on effect to monthly pension contributions too with average monthly contributions falling by just over half since the pandemic began.”
Individuals who are concerned about how furlough coming to a gradual end will impact them are encouraged to speak to their employer about the matter.
Some may also wish to seek help from organisations such as Citizens Advice or the Money Advice Service.
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