Changes to the furlough scheme from 1 July

On 1 July 2021, planned changes to the Coronavirus Job Retention Scheme (also known as the furlough scheme) will come into effect. From that date, employers will be asked to contribute a higher proportion of furloughed employees’ wages.

Employees will continue to receive at least 80% of their normal wage (up to a maximum of £2,500) for the hours not worked, but the government contribution will drop from 80% to 70%. This means that employers will have to contribute the additional 10% (up to £312.50) themselves, on top of the existing employer pension and national insurance contributions for which they remain liable.

The rate of government contribution is due to drop further to 60% on 1 August 2021 and will remain at that level until the planned end of the furlough scheme on 30 September 2021. This means employers will have to contribute the additional 20% (a maximum of £625).

Further delays to the lifting of restrictions could result in an extension to the scheme, but no announcement has yet been made.

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