Record redundancies hit hundreds of thousands of people before Christmas

by Peter Wilson December 15, 2020
(IFA Magazine)

 

  • Redundancies hit a record high of 370,000 in the three months to October. 
  • This was up 217,000 in the quarter – a record quarterly jump, and up 251,000 on the year – a record annual rise.
  • According to ONS research, at the end of October, 7% of businesses expected to make redundancies in the following three months.
  • The unemployment rate was 4.9% (1.69 million) – up 1.2 percentage points (411,000) in a year and 0.7 percentage points in a quarter (241,000).
  • The unemployment rate for women was 4.6% – up a joint record 0.6 pp in a quarter.
  • 32.52 million people were employed – down 280,000 in a year. This is the biggest annual fall in more than a decade (since January to March 2010).
  • The fall in employment was driven by a drop in part-time workers (down 194,000 on the quarter to 8.06 million) and self-employed people (down 183,000 to 4.5 million, with a record 97,000 fall for part-time self-employed people).

“Redundancies surged to a record high in the three months to October. This close to Christmas is a horrible time for hundreds of thousands of people to find themselves out of work. 

The sheer scale of job losses meant it was inevitable that the government would have to do something, but it left it to the 11th hour to announce an extension to the furlough scheme – which will have been too late for many thousands of people. 

The scheme seems to have been a lifeline though. The percentage of furloughed employees rose 6 percentage points between October and November, to 11%. This didn’t stop the number of redundancies rising, but helped slow it. Early signs are that it slowed again in November – although 28,000 people may still have lost their jobs.

Furlough will help protect people from the worst the pandemic throws at us, but the future continues to look horribly uncertain, with London‘s move into tier 3 meaning that now 61% of the population and 53% of hospitality venues are under the tightest restrictions. 

As we reach the end of the year, we face another level of uncertainty, as the Brexit negotiations go to the wire. Preparing for such an uncertain future is nigh-on impossible, and could put more jobs under threat in 2021.

The good news for those still in work, is that pay is rising much faster than inflation. And while Christmas always brings spending opportunities, this is the ideal opportunity to build your savings safety net. That way, no matter what 2021 holds, you’ll have something to fall back on.”

 

Other figures from the release

  • The employment rate fell to 75.2% – 0.9 percentage points down in a year and 0.5pp down in a month.
  • Employment includes people temporarily away from work (which is usually 2-2.5 million. It peaked in April at 7.9 million and in October was around 3.7 million). There were also around 211,000 people away from work and receiving no pay.
  • The Claimant Count rose to 2.7 million – up 2.5% in a month, and 114.8%, or 1.4 million people since March.
  • Total pay (including bonuses) was up 2.7%, and regular pay (excluding bonuses) up 2.8%.
  • After inflation, total pay is up 1.9%, and regular pay 2.1%.
  • There were 547,000 vacancies: down 251,000 in a year (31.5%) but up 110,000 in the quarter.
  • Employment for those aged 16 to 24 years fell 90,000, to a record low of 3.51 million.
  • Employment for those aged 65 years and over was up 70,000 on the quarter to 1.34 million.
  • In November, there were 28.2 million payrolled employees, down 2.7% in a year (781,000 people) and down 0.1% in a month (28,000 people).

 

 

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