Current unemployment situation in the UK
Jessica Rodz March 2, 2021
For sure, after the flood of chaos due to the corona pandemic, unemployment has become a huge issue, and we cannot avoid talking about it. The United Kingdom that always enjoyed the tag of one of the most enriched and equipped economies, now have less to say on its financial strength. The reason, we all know. The covid-19 is still taking control of human lives in the UK and creating more reasons for economic downfall with things like lockdown. FACT CHECK - 
  • October to December unemployment rate was 5%
  • The unemployment rate will rise up to 7.75%

New year 2021 – Is there any good news or a ray of hope?

Yes, some positive signs are there, but it will be unwise to jump to a conclusion. Yes, there are signs of good news, but the black clouds of prevalent unemployment are taking rounds. Perhaps the better approach is to delve into the detail of the entire situation and see what is really happening in the UK.

Unemployment continues in the UK in 2021

  We cannot talk about the results without talking about its stimulators. The smoke breeds from the fire. Similarly, the corona pandemic has caused reasons to feed unemployment. Have a look at the situations that make the job loss situations continue even in the New Year.
  • Third wave sponsored lockdown – When the economy was planning to make revival plans and FINALLY come out of the trauma of corona virus, the third wave came. The already weak circumstances got intense and severe.
  • Industries detonated by repeated lockdown - Hospitality, entertainment and retail are the most affected industries that are having a very hard time on survival possibilities. After reaching the breaking point, many industries finally surrendered and expressed their insufficiency to pay their workers. Last year lockdown happened. This year also continued, how long the businesses can continue to survive without the fuel of employees and adequate sale.
  • The Vaccine struggle – For Government, it is impossible to let people go out until the vaccine does not medicate them. People cannot go out. Not all sorts of jobs and businesses can survive with work from the home strategy. But what to do. Now the vaccine is there, but the problems exist from last year, and the vaccine took time. By the time of its arrival, many people lost their jobs. The same effect continues this year.
With all the above reasons, people are facing a financial crisis due to job loss. Their survival depends on their savings or short-term borrowing choices, such as no guarantor loans or quick loans.

The Younger Ones Are in a Fix with No Job

It is really pathetic but the younger population between 18 - 24 years because they have no jobs and this situation exists from last year. This year, the conditions have changed a bit for good reasons, but the circumstances are still tense. The physical-distancing affected negatively, and the young ones had to face significant financial issues, and this year, the situations are changing at a slow pace. This part of the population also includes Asian, Black and minority populations working on low wage lost their jobs.

The furlough scheme helped a lot but it needs to continue

The furlough scheme by the Government helped keep a control on the rise of the unemployment rate. The employers from the most affected industries expressed their incapability to pay to their employees. It was only the furlough scheme that helped them keep their workers without making them redundant. In the month of November, the scheme was extended up to spring. Now it needs to extend more beyond April because the new jobs are coming in the market, but not as much as expected. This is obvious because as compared to the scale of the loss, which is huge, the revival efforts will look dwarf for some more time. FACT CHECK -
  • In furloughed income the Government pays the majority part of the salary of the employees of a company to help employers retain their workers.
  • The Government has given the wages of around 10 million employees of above 1.2 million companies since the pandemic circumstances emerged.
    The economy has a huge downfall to bear and erased many chapters of success the United Kingdom wrote with its hard work. Those who somehow got new jobs as the market is returning to life still have to compromise with small-sized salaries. Those who are working from home have to bear the stress of reduced salaries. In case of any financial crisis, either they have to take help from others or depend on the payday loans for unemployed offered by direct lenders. Savings are already exhausted in case of most of the people.

Millions depend on out-of-work benefits

Applicants for out-of-work benefits in March 2020 Applicants for out-of-work benefits in January 2021
1.4 million People were seeking help through job seekers allowance or through universal credit. 2.6 million People are looking for the same sort of help to fight unemployment and money crisis.
  The claimants for out-of-work benefits have risen by 113.2% since March 2020. If you see the comparison, you will notice that even today, the circumstances are not good. In fact, we have more number of people searching for help. The applicants have to keep an eye on the terms and conditions to qualify because the conditions have changed. The new job postings are there but not in all locations. The conditions are the same. Due to this reason, still many people seek government benefits. The cities or urban areas where the market is still sitting quietly have to depend more on such support.

What is the solution for pending debts especially credit cards?

When people have no job, definitely they will not be able to pay the instalments of the existing debts. From personal loans to credit cards, the pending debts get bigger in size quite easily. Especially the credit cards that are high-interest debts take a big part of the income when they get bigger with higher interest rates adding every time. As a solution, FCA introduced payment deferrals, but they are not possible for a long time. It was done last year, but this year, FCA cannot be too flexible on this aspect. The finance industry is already fragile, and there are fewer possibilities to defer the payments. As a solution, people are getting inclined more towards the cheaper options of borrowing. For example, the instant approval decision 24x7 loans by direct lenders with customers are cheaper than credit cards. Obviously, people will get attracted to an affordable option. The borrowing process is fast and instalments are quite small.   The above aspects explain the unemployment conditions with a comparison of the last year and this year. Certainly, the conditions are such that we have many reasons to worry about whatever is happening around us. But thankfully, the situations are moving towards the revival with an evident fact that things will take time. The vaccine revolution is ‘ON’, and we need to hope for the best. Human civilization has history ups and downs and also emergence from a bad time. This time also we will repeat the same and will overcome the tough times.