Why many workers remain vulnerable despite a plunge in furlough numbers

With the total number of workers on furlough in the UK falling to 2.4 million in May, why do many workers remain vulnerable? We take a look.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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The total number of workers on furlough in the UK fell by 1.2 million to 2.4 million in May, according to recent figures from the government. It’s a sign that many workplaces are resuming operations after more than a year of workers having to stay at home due to the pandemic

However, tapering of the furlough scheme began on 1 July and employers are being forced to assume more financial responsibility regarding furloughed staff wages. This means that some of the 2.4 million workers still on furlough are vulnerable. Here’s the full lowdown.

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What are the latest furlough figures?

The government recently released its latest statistics on the furlough scheme. Hargreaves Lansdown examined these figures and highlighted the following:

  • The number of workers on furlough fell 1.2 million to 2.4 million in the month of May.
  • Around 30% of businesses had staff on furlough, down from 35% a month earlier.
  • The age groups with the largest numbers on furlough are 25 to 34-year-olds and 35 to 44-year-olds.
  • The highest take-up rate among men is among those aged 65 and over. For women, it’s under 18s, followed by those aged 65 and over.
  • Younger people have returned to work faster. In May alone, the number of under 18s on furlough fell by 68%. Those aged 18-24 fell by 45% and those aged 25-34 were down by 33%.
  • Older people have returned to work at a lower rate. The number of those on furlough aged 55-64 dropped by 25% and those aged 65 or over fell by 16%.
  • There are now more men than women on furlough. 

What are the recent changes to the furlough scheme?

Furlough rules have recently been updated.

Previously, those on the scheme had 80% of their wages paid by the government to ensure that they did not lose their jobs during the pandemic. However, in an effort to conclude the scheme by the end of September, employers are now required to take on more financial responsibility.

From 1 July, the government reduced its contribution to 70% of workers’ wages. It’s contribution will be reduced further to 60% in August and September before ending completely after September.


Why do some groups of workers remain vulnerable?

While the number of people on furlough has been steadily decreasing, some groups remain vulnerable. This is particularly the case now that the scheme is being phased out.

Sarah Coles, personal analyst at Hargreaves Lansdown, explains: “Older people are returning to work far slower than younger people.

“Furlough numbers for the under 25s dropped like a stone as hospitality businesses reopened, but the older you were, the less likely you were to return to work, and furlough numbers for those aged 65 and over fell just 16%.”

She adds, “Men are slower to come off furlough too, and men have overtaken women using the scheme for the first time since the very earliest days of furlough. This owes much to the fact that so many have returned to hospitality businesses, and far more women work in these roles than men.”

In some industries, like airlines, hotels, tour operators and travel agents, the number on furlough has dropped more slowly. With furloughed employees now costing employers significantly more to keep on the books, there are concerns about what the ramifications may be for the employees in those industries.

According to Sarah Coles, “There’s the risk their employers will be seriously reconsidering whether they can afford to keep them on now they are shouldering 10% more of their wages – alongside pension and NI contributions.”

Coles reckons that these concerns could become even more pressing when the scheme tapers again in August.

Is there a silver lining?

With the easing of all lockdown restrictions still scheduled for 19 July, there is hope that the economy will reopen and soon recover enough to protect jobs before government support falls away entirely.

If you’ve lost or are worried about losing your job, there’s good news for you.

According to Coles, job vacancy figures rose to pre-pandemic levels in the three months to May. In fact, vacancies were up in 17 out of 18 national job sectors with the accommodation and food services sectors experiencing the greatest growth.

According to Coles, this suggests that even if you were to lose your job, there could be something else out there for you.

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