UK unemployment rate hits 5%; industry reacts

The UK unemployment rate hit 5% between September and November 2020, according to new data published by the Office for National Statistics (ONS).

This estimate was 1.2% higher than the rate a year earlier and also reflected a rise of 0.6% from the previous quarter.

The figures mean that for the period between September and November, an estimated 1.72 million people were unemployed in the UK. The ONS revealed this was a total that had climbed by 418,000 compared to the same period in the previous year, and up 202,000 on the quarter.

“Sadly, when the furlough scheme ends, these figures may well go up again,” said Legal & General Retirement Income managing director, Emma Byron, responding to the figures.

“This uncertainty is particularly challenging for the significant number of over-50s impacted, who are likely concerned about their current finances and the impact this could have on their retirement plans. Our research last year found that a large proportion of over-50s workers plan to delay their retirement, some indefinitely, as a direct result of the COVID-19 pandemic.”

The ONS data also revealed that in the three months to November 2020, the UK’s redundancy rate reached a record high of 14.2 per thousand.
The Trades Union Congress (TUC) warned Rishi Sunak that he must “urgently” extend the job retention scheme to save jobs, suggesting the Chancellor must recognise the damage done by withdrawing support too soon.

“The more people we keep in work, the faster we can recover,” said TUC general secretary, Frances O’Grady. “But with the job retention scheme set to end in April, millions of people’s jobs hang in the balance.

“When the government planned to withdraw support last autumn, despite restrictions still being in place, unemployment surged. We can’t let that happen again.

“It’s time to end the uncertainty and anxiety. The Chancellor must urgently extend furlough support to the end of the year to keep jobs safe.”

Bluestone Mortgages managing director, Steve Seal, suggested that in light of the figures, specialist lenders might be able to provide a “lifeline”.
“While the roll-out of coronavirus vaccines offers some hope to the UK employment market, the harsh reality is that the wider economic consequences of the pandemic will continue to be felt by businesses over the coming months,” Seal commented.

“For individuals who lose their job or are made redundant as a result, this could leave them in a more precarious financial position than they were before the crisis. While some will get back on their feet over the long-term, others may continue to face financial hardship, which could hinder their chances of securing mainstream financing later on. 
“Specialist lenders can provide a lifeline for individuals like these, so it is vital that the market is prepared for a significant spike in demand.”

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