Number of workers on furlough reaches pandemic-low as nearly 600k exit scheme

The number of people on furlough has reached the lowest level since the scheme was launched in response to the Covid crisis in March last year after nearly 600k workers exited the scheme, new figures released today show.

1.9m people were on furlough at the end of June, down from 2.4m in May, driven by more sectors of the economy throwing off Covid restrictions and reopening to customers.

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In response to the figures, chancellor Rishi Sunak said: “It’s fantastic to see businesses across the UK open, employees returning to work and the numbers of furloughed jobs falling to their lowest levels since the scheme began.”

“I’m proud our Plan for Jobs is working and our support will continue in the months ahead.”

Workers have been returning to jobs after months of being furloughed as firms push to rapidly scale up staffing levels to cope with a resurgence in demand after Covid restrictions were lifted in April and May.

Spending at pubs and restaurants has risen sharply since the resumption of outdoor dining in April, prompting these businesses to recall workers at the fastest rate of any sector. More than a million hospitality and retail workers moved off furlough over the last three months, according to the Treasury.

At its peak, 9m people were on furlough in May last year as the economy was amidst the worst of restrictions to curb the spread of Covid.

The successful rollout of the vaccines in the UK has allowed sectors of the economy that rely on social and face-to-face interaction to generate income to reopen, triggering a burst in consumer spending as households return to high streets.

Under the Coronavirus Job Retention Scheme (CJRS), known as furlough, staff receive 80 per cent of their current salary, capped at £2,500 a month. However, on Sunday, employers will have to cover 20 per cent of furlough costs, which will last until the end of September, when the scheme will be fully wound down.

However, experts have warned that the 1.9m workers still on furlough is still too high and needs to fall ahead of the end of the scheme to prevent unemployment from rising sharply.

Read more: UK unemployment rate falls as lockdown easing drives up hiring

Charlie McCurdy, economist at the Resolution Foundation, said: “With employer contributions to furloughed staff doubling from this Sunday, and the scheme ending completely in just two months’ time, it’s vital that as many furloughed staff as possible return to work soon, in order to limit the rise in unemployment this Autumn.”

Younger workers returning to jobs fastest

Younger workers are returning to jobs at the fastest rate of all age groups, reflecting the high demand for staff in the retail and hospitality industry.

In the last three months, younger people have moved off the scheme twice as fast as all other age brackets, with almost 600,000 under 25s exiting the scheme, according to the Treasury.

People aged between 18-25 represent a large proportion of non-food stores, pubs and restaurants’ workforce.

The rapid return of this age group to the labour market helps explain why furlough numbers have fallen rapidly in the retail, leisure and hospitality sectors.