The furlough scheme will be extended until September in the latest Budget to be announced by Chancellor Rishi Sunak tomorrow.
Mr Sunak will extend the Coronavirus Job Retention Scheme again, meaning it will remain in place until the end of September.
In his Budget, which is set to be announced on Wednesday, March 3, the Chancellor will explain that the UK Government’s contribution will be tapered from July.
This will mean employers will be asked to pay in alongside the taxpayer for the cost of furloughed employees.
Employees will continue to receive 80% of their salary for hours not worked until the scheme ends.
Business Live reports the furlough scheme has protected more than 11 million jobs since its inception and has so far cost the taxpayer approaching £50bn.
Find your nearest vaccination centre by entering your postcode below
Ahead of the Budget statement, he said: “Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK.
“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead – and beyond.”
He is expected to set out an economic plan focused on supporting people through the Covid-19 pandemic, fixing the public finances and building the future economy.
Mr Sunak will tell MPs: “First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.
“Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.
“And, third, in today’s Budget we begin the work of building our future economy.”
Labour said the support measures could have been done “months ago”, accusing the Chancellor of wanting to get his “moment in the sun” rather than protecting jobs.
Bridget Phillipson, shadow chief secretary to the Treasury, said: “These changes to support schemes could have been made months ago.
“Businesses and workers have been pleading with the Chancellor to give them certainty – but they have had to wait because he said it wouldn’t be appropriate until the Budget.
“Announcing it the night before shows the focus is on Rishi Sunak getting his moment in the sun rather than protecting jobs and livelihoods.
“We need a Budget that secures Britain’s recovery and rebuilds the economic foundations the Conservatives weakened before the crisis.
“That means a plan to support jobs and businesses, protect family finances and set Britain on the path to a better, more secure future.”
The CBI’s chief economist Rain Newton-Smith said extending the scheme will keep “millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown”.
“The furlough scheme has been a stand-out success throughout the crisis. It’s common-sense to keep the scheme going while business resilience remains fragile for some months yet,” she said.
“As we make progress into the summer, it’s right that businesses start contributing a little more as revenues start to recover. Meanwhile it’s great to see more support for the newly self-employed, who have missed out over the last year.”