Furloughed workers six times more likely to lose their jobs

Unemployment did not rise as quickly as expected when furlough ended (Picture: AFP)

People who were furloughed are six times as likely to have lost their job as other workers, according to new research.

Yet the end of the Government scheme is thought to have only resulted in a small increase in the number of unemployed people in the UK – despite fears of thousands of job losses when it ended.

The Resolution Foundation believes around 136,000 workers moved from furlough to either unemployment or inactivity after the Coronavirus Job Retention Scheme (JRS) ended.

The think tank’s study suggested that almost nine out of 10 workers who had been on the scheme in September were employed in October, while 12% moved into either unemployment or inactivity.

The Foundation argued that its research showed the Government was right to extend the JRS to the end of September, adding that the biggest economic contraction in a century has led to one of the smallest recession-led rises in unemployment.

However, while the scheme was relatively successful in keeping unemployment under control, recently furloughed workers faced six times as high a threat of entering unemployment in October than other workers, the report said.

The Foundation added that this higher joblessness risk was entirely driven by fully furloughed workers, with those partially furloughed no more at risk of losing their job than fully employed workers.

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Charlie McCurdy, an economist with the organisation, said: ‘During its 18-month duration the Job Retention Scheme has supported over 11 million employees, preventing lockdowns and huge behavioural changes causing catastrophic rises in unemployment.

‘Plans to prematurely close the scheme led to concerns that its end would spark a fresh rise in worklessness, but extending the scheme to beyond the reopening of the economy this summer has helped to limit this rise to just 136,000 workers.’

He continued: ‘While it is welcome that unemployment has remained low, recently furloughed staff did face a much higher risk of losing their job in October.

‘This reinforces the need for Britain’s stuttering economic recovery to strengthen so that more of these workers can be helped back into work swiftly rather than leaving the labour market altogether.’

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