Older workers being ‘parked’ on furlough, says Resolution Foundation

The number of employees on the Coronavirus Job Retention Scheme (JRS) fell rapidly during May as the economy reopened, but far more people remain furloughed than previous official data has suggested, while older workers are disproportionately likely to remain ‘parked’ on furlough for long periods, the Resolution Foundation said today.

The HMRC data shows that the number of people on furlough fell by over a million during May, from 3.5 million on 30 April to 2.4 million on 31 May.

This fall was driven largely by the reopening of social sectors such as hospitality. As a result, under 25s experienced the biggest fall in furlough rates – halving from 616,000 to 322,000.

But while the recent fall is encouraging, the Foundation warns that the total number of employees still on furlough is far higher than the ONS survey estimate that just 1.7 million employees were furloughed at the end of May. The ONS survey also suggested that the pace at which furlough rates are falling has slowed considerably post-17 May.

The Foundation’s own research – also published today – shows that the age profile of furloughed workers is changing too, with around half aged 45 and over. It finds that older workers in particular have been ‘parked’ on furlough during the recent reopening – and that over 600,000 workers aged 45 to 64 have now been unemployed or fully furloughed for at least six months.

This, says the Foundation, should remind us both of how vital the furlough scheme has been in preventing catastrophic levels of unemployment during the crisis, but also that the rise in unemployment is ahead of us, rather than behind us. Further support is likely to be needed when the furlough scheme is ended completely in September.

Daniel Tomlinson, Senior Economist at the Resolution Foundation, said: “The grand reopening of the economy in May has caused over a million people to return to work from furlough. It’s especially encouraging to see so many young people – who have been hardest by the Covid economic crisis – finally returning to work.

“But with 2.4 million employees still not fully back to work, today’s figures offer a sobering reminder of just how incomplete our Covid recovery is.

“With the furlough scheme starting to be phased out today, the Government must do all it can to prevent a big rise in unemployment this Autumn – particularly for those who have spent long periods not working during the pandemic.”