One million Brits are set to still be on furlough when the scheme shuts down next week, damning analysis has warned.
Fears are mounting for families’ futures as the clock ticks down to the end of the Covid wage support programme on September 30.
Since it launched last March, furlough has supported 11.6million jobs by paying up to 80% of people’s wages - at a cost of nearly £70billion to the taxpayer.
After several extensions and a wind-down period, Chancellor Rishi Sunak is ending the scheme in a bid to return to normality after lockdown.
But there are fears of a cost of living crisis - as energy bills are rising on October 1 and Universal Credit payments are being slashed from October 12.
Tory minister Paul Scully today said Britain should brace for a “tough winter” as gas prices rise and energy firms go bust.
The number of people on furlough fell to 1.4m in mid-August, with 600,000 of those still fully furloughed.
Using that trend, the Resolution Foundation projected one million employees are set to remain on the scheme right up until the last moment.
Of those, “the majority” will return to their jobs but hundreds of thousands will need to find new work in October.
Dan Tomlinson of the Resolution Foundation said: “The furlough scheme has been a living standards lifeline during the pandemic.
“The fact that 1.4 million employees were still on the scheme just one month before it closes shows that our labour market is still far from full-health.
“The end of furlough is set to prompt a testing period in the labour market as even more people, particularly older workers, look for new jobs.
“This is another reason not to press ahead with the cut to Universal Credit.”
Separate research by the New Economics Foundation claims the end of furlough is likely to put 710,000 jobs “at risk of redundancy, loss of hours, or loss of pay”.
Alex Chapman of the think tank said it was “further evidence that the UK’s economic recovery from the pandemic is stalling”, adding: “With energy bill increases, universal credit cuts, and national insurance rate rises all in the pipeline, workers face a serious shock to their finances which will be worsened by ending furlough without a follow-on scheme.”
Earlier Business Minister Paul Scully warned some energy firms will go bust, forcing their customers to move suppliers, due to soaring wholesale gas prices.
But he shrugged off calls to extend the £20-a-week Universal Credit hike to help the poorest families.
“If you were to reverse the Universal Credit as it is, you would have to put up income tax by the equivalent of a penny and 3p on fuel,” he said.
"You have to find £6billion from somewhere."
Challenged that "most people would accept putting a penny on income tax" to pay to keep the rise, he hit back: "What you don't want to be doing, for the lowest paid in particular, is giving with one hand and taking and increasing taxes with the other."
In a fresh blow to hard-up customers, he also signalled energy bills could rise next spring. Talks are underway whether the price cap should increase in April, the top Tory said, insisting the Government had to plan for the "worst case scenario" to protect consumers.
The cap, which is reviewed twice a year, is set by the regulator Ofgem and aims to protect millions of customers from sudden hikes in their energy bills.
It will rise on October 1 by £139, with the next review due six months later.
