Almost 11.7 million people could be furloughed or unemployed in the coming months, according to new research from independent think-tank Resolution Foundation (RF).
The group said that although the UK Government’s Job Retention Scheme (JRS) will “substantially limit” the growth of unemployment, it added the “evidence is clear” that the scale of unemployment increases over the coming weeks will still be “unprecedented”.
RF said the rising unemployment and high take-up of the JRS are also likely to be concentrated in lower-paying parts of the economy, such as hospitality and (non-food) retail, according to the research.
As many as 3.1 million employees (46%) in these sectors could be furloughed, with an additional 800,000 workers in this part of the economy becoming unemployed. In contrast, RF said only 4% of those working in the highest-paid sector, finance and insurance, are likely to be furloughed.
Additionally, a “staggering” 1.4 million people have made a new claim to Universal Credit (UC) in the past four weeks alone, with around 240,000 claims being the usual amount over the same time period.
Some of these claims were from those who are still working but have experienced large hours reductions (or whose pay has fallen due to being furloughed), but RF stated that others will be applying due to “heightened uncertainty at the present time.
RF said: “The scheme’s higher-than-expected scale means that the JRS is now central to both combatting and understanding this crisis. It is important that the Government publishes regular data on scheme processing, take-up and payments, as well as considers carefully how the scheme could be improved to support the economy further.”