Martin Lewis issues redundancy warning to thousands of furloughed workers after new Government update
5 June 2020, 07:22 | Updated: 5 June 2020, 08:15
Martin Lewis warns of 'millions of redundancies' in August
Money Saving Expert Martin Lewis has explained the changes for furloughed workers from July.
Martin Lewis was back on our screens on Thursday evening to explain the latest changes to the furlough scheme following another Government update.
Last week, Chancellor Rishi Sunak announced that companies would have to start paying towards the wages of 8.7 million employees currently unable to work because of the pandemic.
While the Job Retention Scheme will close completely in October, from July 1 a "new, more flexible furlough" will be in place.
Speaking from his London home, the Money Saving Expert explained all the changes, as well as warning those on the scheme that ‘thousands of redundancies’ could be coming.
He said: “Employees will still get a minimum of 80 per cent of your salary up to £2,500 a month, but from August, employers are going to have to start contributing towards the cost.
“In August they’ll just pay National Insurance and pension contributions, then it ramps up each month until October when they’ll be paying 20 per cent of the costs towards furlough - 20 per cent of the 80 per cent.”
Martin added: “Let me be honest, what I suspect that will mean, is if you are a member of staff who they [employers] don’t think is going to have a viable job after October, they’re going to make people redundant from the start of August when it costs them more.
“And that means over the next two or three weeks, we’re going to see lots of redundancy consultations and lots more redundancies coming - hundreds of thousands, possibly millions, who knows, it’s going to be a tough time.”
Rishi Sunak announces change to 'flexible' furlough scheme
Another big change for all furloughed employees is that they will be able to work part-time from July 1.
While the full details of this will be announced on June 12, Martin offered insight into how he thinks it will work, explaining: “You’re going to be able to change hours each week - full-time one week, part-time the next, fully on furlough the week after that one - I suspect that’s what’s going to happen week-by-week.”
He added that employers will have to pay staff full contract rate for the hours they work and furlough pay for the hours not worked.
Around £17.5 billion has been claimed for the furlough scheme so far, affecting 8.7million people since the start of the coronavirus pandemic.
This number is set to rise further over the next two weeks, with the Government expecting the scheme to cost the economy more than £64billion.
Martin will be going into more detail on redundancy and employment rights during his show next week. Find out more information here.