Businesses furloughing staff during the coronavirus outbreak will receive further financial support – with the costs of employer national insurance and pension contributions being covered by the government.

Under the scheme, employers can claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month.

In a move that could save businesses an extra £300 a month for each employee under the scheme,the government will now cover the employer national insurance and minimum auto-enrollment pension scheme contributions employers pay on the wages they must pay their furloughed staff – on top of the wages covered under the scheme.

Chancellor of the Exchequer Rt Hon Rishi Sunak MP said: "Since the start of the coronavirus outbreak, I’ve made it clear that hard-working employers and employees should not have to suffer hardship unnecessarily.

"Our Coronavirus Job Retention Scheme supports workers and businesses up and down the UK – and today we’re strengthening it because we will do whatever it takes to support jobs."

New guidance on the Coronavirus Job Retention Scheme published by the government also confirmed that those made redundant after 28 February can be reemployed and placed on furlough.

Those on furlough will also be permitted to volunteer without risking their pay - and will be able to join the 500,000 members of the public who have signed up to help the NHS during the coronavirus outbreak.

The scheme is part of an unprecedented package of measures announced by the Chancellor to protect individuals and businesses.