Chancellor Rishi Sunak has announced the furlough is set to be extended for another month.
The scheme was due to expire at the end of March but the extension until April 2021 suggests the Government believes the economy will still be struggling to cope with the impact of the coronavirus pandemic.
Mr Sunak also extended Government loan schemes until the end of March to help support businesses.
The Chancellor said: "Our package of support for businesses and workers continues to be one of the most generous and effective in the world - helping our economy to recover and protecting livelihoods across the country.
"We know the premium businesses place on certainty, so it is right that we enable them to plan ahead regardless of the path the virus takes, which is why we're providing certainty and clarity by extending this support, as well as implementing our plan for jobs."
Mr Sunak also announced that the next Budget will be on March 3, 2021.
Under the furlough scheme the Government will continue to pay 80% of the salary of employees for hours not worked until the end of April.
Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.
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Business Secretary, Alok Sharma, said: ‘We know that business owners need additional certainty as we head into the New Year.
"Extending government-backed loan schemes will give companies right across the UK the finance they need to support, protect and create jobs as we build back better from the pandemic.’
