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Coronavirus: UK employers furlough 6.3 million workers as scheme cost hits £8bn

·Finance and policy reporter
·2-min read
People walk along a near empty High Street in Winchester, as the UK continues in lockdown to help curb the spread of the coronavirus.
People walk along a near empty High Street in Winchester, as the UK continues in lockdown to help curb the spread of the coronavirus. (PA)

More than 6.3 million workers have been furloughed since the coronavirus crisis began, new figures show.

The figure is for workers whose employers have already applied for government grants, but not all have yet done so, meaning the real figure could be even higher.

Data released by HMRC on Monday showed 800,000 firms had made claims on the coronavirus job retention scheme. Employers receive refunds for 80% of the wages of staff who would otherwise risk redundancy, who are instead ‘furloughed’ on a temporary period of paid leave.

Some workers receive top-ups from employers, but many will have taken a 20% hit to their incomes and have had to adjust to life without day-to-day work, despite technically remaining employed.

The sheer scale of the numbers of workers affected illustrates how the coronavirus and government lockdown has hammered the UK economy. Economists warn the recession could be the worst in decades.

READ MORE: Coronavirus: Firms warned on 'knee-jerk' lay-offs as Rolls-Royce job fears grow

The temporary scheme has not prevented lay-offs entirely, however. Separate figures released on Monday show that since the crisis began more than 1.8 million people have also claimed universal credit, Britain’s main welfare benefit for jobseekers and the low-paid.

Employers must plan to retain staff to apply for the furlough scheme, but fears are growing of widespread lay-offs when the policy ends.

Analysts and firms increasingly expect UK economic recovery will not be as fast as previously hoped. Virus fears, social distancing measures, and some continued government curbs may dampen activity long after the general lockdown eases.

The UK government initially proposed the scheme would last until May, but has now extended it until June and not ruled out a further extension.

With UK government spending soaring on crisis support for health and welfare services and schemes to help firms, the government may feel financial pressure to taper off the scheme later this year.

READ MORE: UK government crisis measures to cost £104bn this year

HMRC estimates the cost at £8bn ($9.9bn) so far, but the Office for National Statistics (ONS) says it could reach £49bn this year. Yet firms and think tanks say the scheme should be sustained, covering workers’ wages part-time to save jobs in sectors that will recover slowly from the crisis.

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