Almost two million workers remain on furlough as the scheme is phased out, with older workers more likely to be stuck

The number of furloughed employees fell below two million for the first time at the end of June, ahead of the scheme being wound down over the summer, the Resolution Foundation said today (Thursday) in response to the latest HMRC Coronavirus Job Retention Scheme data.

The number of furloughed employees fell by 590,000 during June – roughly half the 1.1 million fall that took place during the grand reopening in May – taking the total number of furloughed staff down to 1.9 million.

More recent ONS surveys have shown that furlough rates have continued to fall during July, though the pace of people coming off furlough has slowed considerably and the numbers of furloughed staff are significantly higher than ONS surveys predict.

The number of people still on furlough is particularly critical now, says the Foundation, as employer contributions to the wages of furloughed staff are set to double from 1 August (from 10 to 20 per cent), while the scheme is due to end completely on 30 September.

The latest HMRC data highlights how some sectors are still struggling to reopen, with around half of all staff in air passenger transport and travel agencies still on furlough.

Younger workers have been leaving furlough most quickly, with the share of under 18 staff furloughed falling from 13 per cent in May to 7 per cent in June, and from 10 to 6 per cent for those aged 18-24. One-in-ten workers aged 65 and over were on furlough – the highest share of any age group. The Foundation has warned of older workers being ‘parked’ on furlough as younger workers return to work as hospitality reopens.

London remains the furlough capital of Britain, with nine of the ten local authorities with the highest furlough rates in the capital, including Newham and Hounslow where around one-in-eight workers are still on the Job Retention Scheme.

Charlie McCurdy, Economist at the Resolution Foundation, said:

“The number of furloughed employees has fallen below two million for the first time as the economy continues to reopen. But that is higher than many expected, and a cause for concern as the scheme is wound down.

“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.”