Holiday payouts during the coronavirus crisis have resulted in thousands of people becoming work-shy, senior bankers claim

Generous holiday payouts during the coronavirus crisis have created hundreds of thousands of work-shy people, senior bankers claim.

The non-binding payouts have broken the link between hard work and higher wages, says the Bank for International Settlements (BIS).

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It said employees in the UK, US and Canada – which are among the most generous furlough payers – were reluctant to return to their offices, while staff in most countries had returned.

Figures from June show there were 191,000 fewer workers in the UK than before the pandemic.

The UK spent £70 billion on 11.7 million temporarily unemployed workers.

BIS said: “Attitudes towards work and the way we think about work and the labor market have obviously changed.”

According to the BIS, the phenomenon risks fueling inflation as companies offer higher wages to retain motivated employees.

The Institute for Employment Studies, meanwhile, said many people had used furlough to partially fund their early retirement.

Its director Tony Wilson said the effect was “a consequence of the design of the furlough scheme”.

Mr Wilson criticized then-Chancellor Rishi Sunak’s payouts as “broad-based” and “passive”.

He added: “We expect to see much higher furlough rates, particularly towards the end (of the scheme) among people over 50.”

“This was also the group in which we recorded higher job losses.”