One in five companies are planning to make some employees redundant, according to a survey by the British Chambers of Commerce.
Companies now must pay 20% of staff’s salaries (since 1 August), with the government paying 60% as the furlough scheme tapers down towards its closure on 30 September.
The recovery is clearly not working for everyone, with more than 630,000 people aged over 50 still on furlough and waiting to find out if they have a job to go back to” – Stuart Lewis, Rest Less
About 1.9 million workers were still on furlough as of 30 June, down from a peak of 5.1 million in January.
Government figures show that 11.6 million jobs have been supported since the Job Retention Scheme launched in April 2020.
The British Chambers of Commerce study found that 18% of firms were likely to make staff redundant because of the change in furlough rules.
A quarter said they would aim to reduce hours or move staff to part-time working patterns.
Jane Gratton, head of people policy at the BCC, said the change would “likely result in many thousands of people being released back into the labour market, as employers who are still struggling to recover from the recession are forced to make redundancies and cuts to working hours”.
She said it was vital for employers and the government to give returning furloughed workers the support and training they needed “to be re-engaged and productive”.
Older people’s organisation Rest Less pointed out that, although the number of furloughed roles had fallen across all age groups, the proportion of over-50s on furlough had been steadily increasing this year, rising from 27% in January to 34% in June.
In contrast, the proportion of under 30s on furlough fell from 29% to 21% in the same time period.
Stuart Lewis, founder of Rest Less, said: “The recovery is clearly not working for everyone, with more than 630,000 people aged over 50 still on furlough and waiting to find out if they have a job to go back to. This is in addition to the 568,000 over-50s claiming job seeking or out of work benefits.
Along with other employment organisations, Rest Less was expecting a “further wave of redundancies and a spike in unemployment”, said Lewis, as the furlough scheme draws to a close next month.
“Faced with significant age discrimination in the recruitment process, and no government equivalent to the Kickstart scheme for older workers – the implications of redundancy for workers in their late 50s or early 60s can be significant,” said Lewis.
He added that faced with the increased likelihood of long-term unemployment due to age discrimination in the recruitment process, many older workers “could find themselves forced into an early retirement they neither want, nor can afford. For those less fortunate, that means potentially many years on job-seeking benefits before they can access the safety net of the state pension.”
Rest Less is calling for tailored support to be urgently provided to unemployed workers in their 50s or 60s, in the same way as Kickstart has been set up to help those under the age of 25.
Hannah Slaughter, an economist from the Resolution Foundation, told the BBC that it was the over 60s who were more likely to be furloughed.
“That’s concerning because we are likely to see a rise in unemployment when the Job Retention Scheme ends in the autumn and any workers who are left on furlough are more likely to become unemployed,” she said.