The Coronavirus Job Retention Scheme (CJRS), commonly known as the furlough scheme, has been one of the Chancellor’s flagship financial policies during the UK lockdown. The scheme has allowed employers to place employees on furlough during times of uncertainty, meaning employees keep earning and businesses can stay afloat. The scheme is due to end later this year, but there will also be some major changes to the way the scheme runs over the next few months.
What furlough scheme changes will come in for July?
Major changes will start from July 2021 with regards to the furlough scheme.
For May and June, the Government has contributed 80 percent of furloughed employees’ wages, capped at £2,500 per month.
However, from July the amount of Government support is going to start tapering off.
In July, the Government will contribute to 70 percent of an employee’s wage, capped at £2,187.50 per month.
However, furloughed employees can still expect to get 80 percent of their wages up to £2,500 per month.
This means employers will have to start topping up their employees’ wages by 10 percent, up to £312.50, in July.
For August and September, the Government’s contribution to furloughed employees’ wages will decrease even further.
So there is currently no suggestion that the full furlough scheme will be extended past September either.
The changes to the furlough scheme, along with the planned end in September, will likely cause some uncertainty for many businesses and employees.
Commenting on the changes, Anthony Morrow, co-founder of online financial advice service OpenMoney, said: “While parts of the economy are recovering well from the effects of the pandemic, other sectors are still getting back to normal, and some are yet to fully reopen.”
Mr Morrow added: “For employees on furlough, these changes and the looming closure of the Coronavirus Job Retention Scheme will raise concerns over their future job prospects and the long-term impact of the pandemic on their finances.”
This post originally appeared on Daily Express :: Finance Feed