The Pandemic's Redundancy Crisis
COVID-19 has turned the world on its head, and impacted lives on a global scale.
The UK’s CRJS (Coronavirus Job Retention Scheme) has been a saving grace for many businesses, allowing them to keep staff whose jobs otherwise might be cut to save money, and whose salary (80%) would be paid by the government.
However for many businesses, the impact of the coronavirus has proved too much, forcing them to make necessary redundancies to cut costs, and therefore increasing the amount of people without an income during the pandemic.
One of biggest repercussions of the pandemic is the struggle to stay afloat faced by businesses across industries that rely on the steadiness of the UK economy. For example, the industries hit the hardest by coronavirus has been the travel and tourism and hospitality industries, who due to the UK’s travel lockdown and quarantining rules, have had to change the way they work in order to survive.
This could mean cutting pay or hours, placing staff on furlough, asking staff to take unpaid leave, or making redundancies.
As of Monday 27th July 2020, over 150k redundancies have been made in the UK during the coronavirus crisis, whilst 9.3m jobs remain furloughed under the CJRS, according to The Guardian.
For those that remain furloughed, the financial stability offered - even if less than what they were earning - by the government is positive, and whilst it doesn’t rule out the risk of redundancy, gives people time to consider their options if they were to lose their job.
The 150k that have been made redundant, however, are facing the UK job market at a difficult and unstable time, with many vacancies advertised prior to the pandemic having been put on hold or scrapped altogether.
According to the Office for National Statistics, between April and June 2020, the number of vacancies in the UK dropped to an estimated 333,000 - the lowest level since the Vacancy Survey began in 2001.
Along with a fall in vacancies, PAYE RTI indicated 649,000 less people in paid employment in June 2020, compared to March 2020.
Those facing or having faced redundancy are being catapulted into a competitive job market, with not enough jobs for the amount of people now searching for a new role.
This week, The Guardian reported that for every job vacancy in the UK, 8 people are claiming benefits support - a fivefold increase since the beginning of the coronavirus pandemic.
Worries are also rising due to the anticipation of the end of the CJRS at the end of October, which will likely result in another wave of redundancies that, again, will increase the amount of people seeking benefits support.
For workers that have unfortunately suffered redundancy as a result of the COVID-19 pandemic, the stress of finances could become overwhelming as time goes on, and with the UK job market in an unpromising position,
Extra support has been put in place during the pandemic to ensure that help is available where needed. Some of these services include mortgage and rent holidays, and many lenders are pausing payments for those who can’t afford to pay outstanding debt.
Debt management plans such as Money Dashboard are also a great way to track spending and payments, and can be accessed through a range of smartphone apps, websites and charities.
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