The furlough scheme has been extended for a further month until the end of April next year.
Chancellor of the Exchequer Rishi Sunak said the extension to the Coronavirus Job Retention Scheme would provide certainty for millions of jobs and businesses.
It means the government will continue to pay up to 80% of the wages of furloughed workers, with a cap of £2,500 a month.
The government-guaranteed COVID-19 business loan schemes will also be extended until the end of March.
Mr Sunak 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.”
So far, the scheme has supported 9.6 million jobs across the UK, with more than one million businesses using it.
Businesses will also have until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme.
These had been due to close at the end of January.
To date, they have already provided more than £68 billion in guaranteed loans to firms.