What the Furlough Scheme Changes Mean For You
The Government’s March budget announcement has extended the ‘furlough’ scheme further. What do these changes mean for you?
As restrictions are eased and the economy begins to reopen, employers will be required to contribute to the cost of paying their employees for hours not worked alongside the government.
Employers contributions will be broken down as follows:
- 10% in July
- 20% in August and September
James Andrews, personal finance expert at money.co.uk says: “Following several days of speculation and debate surrounding the future of furlough, the Chancellor has announced that the scheme is to be extended beyond April, up until the end of September 2021.
“But while workers will be able to receive the same amount of money all the way through to October, 80% of their wages up to £2,500 a month, it will start getting less generous for employers from the end of June, by which time lockdown restrictions are expected to be over.
“In July employers will be expected to contribute 10% of a furloughed employee’s wages for the hours they aren’t working, while in August and September that will rise to 20%.
“Bosses will also have to pay pension and National Insurance contributions for furloughed staff.
“Workers up and down the country have been hit financially by COVID-19 and although, for some, the 20% hit to pay-packs is manageable, for others it is more difficult. However, there are ways to help save money and manage budgets with less cash coming in.
“Keeping energy bills down through switching to a new tariff, and budgeting regular outgoings effectively will help those manage their finance on a reduced income. Additionally, banks have extended customers payment breaks, through schemes such as mortgage payment holidays and the credit card repayment freeze.
“If you are concerned about racking up accumulating larger debt, it is vital that you seek expert help. Free services such as Citizens Advice, or StepChange Debt Charity can help those struggling, manage debt.”
Money.co.uk has launched a dedicated guide to explain what the furlough changes mean for employers and employees; https://www.money.co.uk/guides/coronavirus-what-the-furlough-scheme-changes-mean-for-you
