UK’s jobless in ‘battle for financial survival’

interactive investor comments on ONS labour market overview.

The Office for National Statistics Labour Market Overview, released this morning, showed that in the three months to the end of November:

• The number of payroll employees had fallen by 828,000 since February 2020
• The number of redundancies reported in September to November 2020 reached a record high, with the redundancy rate at 14.2 per thousand
• The employment rate stood at 75.2% (72% for women, 78.4% for men); the unemployment rate at 5% (1.2% higher than a year ago) and the economic inactivity rate at 20.7%
• The Claimant Count increased slightly in December 2020 to 2.6 million. This represents a monthly increase of 0.3% and an increase of 113.2%, or 1.4 million, since March 2020.
• The annual rate of pay growth is 3.6%, however the ONS said this is partly a result of there being fewer lower paid jobs
• There were 578,000 vacancies in October to December, 224,000 fewer than a year ago
• The estimated economic inactivity rate for women was at a joint record low of 24.4%. Economic inactivity means people of working age who were not looking for work in the previous four weeks and are unable to work in the next two weeks.
• During the reference period at the end of November 2020, the ONS said businesses expected that 5% of their workforce would be made redundant in the three months following the interview. The rate of expected redundancies was highest in administrative services (14%), accommodation and food service activities (10%), and transportation and storage (8%).

Becky O’Connor, Head of Pensions and Savings at interactive investor, said: “The employment data published this morning paints a grim picture for the nation’s job prospects and their finances. With higher redundancies and fewer vacancies, getting back to work for those who have lost jobs during the pandemic is likely to be a tougher uphill struggle.

“Greater dependence on benefits is one indicator of financial hardship caused by job loss, but beneath this data, people will be whittling down their savings balances and cutting any outgoings they can to stay afloat in the absence of regular earnings.

“Older workers over 55 who have unexpectedly lost income may be using pension money they need for the future to get by now. Relatives with some spare cash may be called upon to help family members who are struggling with debt. People will be negotiating repayment plans with lenders and calling debt charities. For too many, daily life is now a battle for financial survival – until that unknown date when they can get back to work.”