The furlough scheme will be extended to the end of October, with workers continuing to receive 80% of their current salary, up to £2,500, the Chancellor has said. The scheme was originally due to close at the end of June.

However, new flexibility will be introduced to get employees back to work and boost economy. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

Chancellor Rishi Sunak said: ‘Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak, and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way.

‘This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.’

So far, the job retention scheme has protected 7.5m workers and almost one million businesses.

The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of May.

The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period. It will also continue to work closely with the administrations in Scotland, Wales and Northern Ireland to ensure the scheme supports people across the UK.

The Chancellor’s decision to extend the scheme, which will continue to apply across all regions and sectors in the UK economy, comes after the government outlined its plan for the next phase of its response to the coronavirus outbreak.