Ongoing falls in employment and the economy show the challenge ahead for the UK’s post-pandemic financial recovery, meaning all eyes turn to next week’s hugely significant budget, according to the February 2021 Money Statistics, produced by The Money Charity.
As the UK continues to quickly move ahead with the rollout of the vaccine programme, bringing the end of pandemic restrictions into sight, attentions inevitably start to shift towards what the post-pandemic landscape will look like. The starting point remains a challenging one though. As of January 2021, 4.5 million employees in the UK were still furloughed. Of those, one-third had been furloughed for ten or more months. Meanwhile the total unemployment rate had risen to 5.1%, with young workers still particularly heavily affected, with a total unemployment rate of 13.4% (507,000) amongst those aged 18-24.
Another struggling area has been for the self-employed, with 14% of pre-pandemic self-employed no longer working as of January 2021. These numbers, alongside many of the others highlighted in this month’s report, have led to the UK economy being 9.9% smaller at the end of 2020 than it was at the beginning of the year.
Clearly without the strong levels of financial support the government have provided, such as via the furlough and other schemes, the UK economy would have fallen into a much deeper recession. Nevertheless, many households are feeling increased levels of financial pressure alongside other fundamental challenges to mental health and children’s education. With the Budget next week, many will be looking to the Government to clearly outline its recovery vision and continue critical support until the economy has had a fuller chance to bounce back from its current restricted condition.
Michelle Highman, Chief Executive of The Money Charity says: “Following the numbers in recent months has often been a sobering experience, as we have seen the struggles of millions of UK households due to the pandemic. However, there have also been other more positive signs, with higher levels of household savings, higher wages for those still in work, lower levels of consumer debt and pent-up demand for goods and services. But this imbalance remains a major issue, and the positive signs alone will need time to rekindle economic growth and employment.
“All eyes turn therefore, towards an especially significant Budget. Our hope is that a programme will be set out that will place Financial Wellbeing front and centre, with continued support for all those who need it until spending and employment has had the fullest chance to recover.”
Other striking numbers from the February Money Statistics:
- On average, a UK household spends £4.29 a day on water, electricity and gas. (P14.)
- Borrowers paid £123 million a day in interest in December 2020. (P5.)
- Government debt increased by £745 million a day in the year to January 2021. (P4.)