ONS data shows ‘chinks of light’, but we may see the scar of the pandemic on finances for decades.
The latest Labour Market Overview, published by the Office for National Statistics this morning, shows that there were 611,000 fewer people overall in employment this February compared with last.
The ONS estimated the UK employment rate in the three months to January was 75% - 1.5% lower than a year ago; while the unemployment rate estimate was 5%, 1.1% higher than last year.
During the three months from November 2020 to January 2021, an estimated 1.7 million people were unemployed – 360,000 more than the same period a year earlier and 11,000 more than the previous three months.
693,000 fewer people were in payroll employment in February this year compared to last. People in the under 25 age group were the most likely to lose their jobs in the 12 months from February 2020.
There were ‘small increases’ in the number of payroll employees in the past three months, the ONS said. Between January and February this year, the number of people in payroll employment rose by 68,000.
The figures suggest that getting people back into work remains hard, with the number of job vacancies 26.8% lower than a year ago, although this is an improvement on summer last year, when vacancies were down 60% year on year.
The number of people classed as ‘economically inactive’ between November 2020 and January 2021 was 8.71 million, 279,000 more than a year earlier and 108,000 more than the previous quarter. The ONS said this was driven by people who are inactive because they are students, or for ‘other’ reasons.
Pay data showed growth in average total pay including bonuses among employees of 4.8% between November 2020 and January 2021, and excluding bonuses, 4.2%.
Becky O’Connor, Head of Pensions and Savings, said: “Keeping people in work and pay has been vital in preventing more serious damage throughout the pandemic.
“Over the coming months, a key indicator of recovery will be whether a rising number of people are going back to their old jobs, as shops and venues open up again, or finding new ones.
“Today’s ONS data shows chinks of light. But even as work opportunities return, people who have lost their jobs or part of their income will need continued support as the economy opens back up.
“If the doors to work reopen for those people, their decimated personal finances from a year of lost income will take far longer to get back off the ground.
“They may face an uphill battle of additional debt repayments after months of support from lenders, which could significantly eat into their disposable income. This will make it harder for them to build up their financial resilience, in the form of short-term savings buffers and longer term, their pensions.
“As a result, we may see the scar of the pandemic on people’s personal finances for decades to come.”
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