Furlough rules to be changed by Rishi Sunak next week – impacts for your pay explained

Furlough is formally known as the Coronavirus Job Retention Scheme, and has assisted millions throughout the pandemic. The support scheme was designed to ensure Britons were able to stay in work by covering the costs of their pay when employers were forced to close their doors. While the furlough scheme was originally intended to end much earlier, it was extended in order to offer additional support.

But as the economy now begins to reopen following the lifting of restrictions, the scheme will finish.

This is not before, however, it is gradually phased out to continue to offer at least some level of help to employers and workers.

The first major change took place on July 1, but there is an additional change next week which truly signals the beginning of the end of the scheme.

Originally, Government support was set at 80 percent of a person’s wages up to £2,500 per month.

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“The caps are proportional to the hours not worked.”

This means employers will have to take on 20 percent of wages up to £625 per month.

They will also need to pay employer’s National Insurance contributions and pension contributions.

Employers can choose to top up a person’s wages above the £2,500 cap set by the Government.

The implications of the end of furlough, then, are significant for potentially millions of people. 

Those who are worried about how furlough coming to a gradual end will impact them are encouraged to speak to their employer about the matter.

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Certain individuals may also wish to seek help from organisations such as Citizens Advice or the Money Advice Service. 

The official end date of furlough is now set as September 30, 2021. 



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