Monthly Archives: March 2016

UK unemployment drops by 28,000

Alexander Tredwell – Leaders in Specialist Professional Recruitment

UK unemployment fell to 1.68 million between November and January, down 28,000 from the previous quarter, the Office for National Statistics says.

The rate of unemployment remained at 5.1%, maintaining a decade-low rate.

Some 31.42 million are in work, 478,000 up on a year ago. The employment rate is 74.1%, the joint highest since current records began in 1971.

Average earnings went up by 2.1% in the year to January including bonuses, 0.2% higher than the previous month.

Excluding bonuses, the increase was 2.2%.

“With the Chancellor [George Osborne] setting the backdrop to this afternoon’s Budget as one where the global ‘storm clouds’ are gathering, today’s labour market figures offer a ray of sunshine,” said Scott Bowman, UK economist at Capital Economics.

He added that the UK’s jobs recovery remained “in full swing”, but cautioned that wage growth was “still fairly subdued by past standards, especially considering how much the labour market has tightened recently”.

The East of England saw the biggest fall in the number of unemployed people, down by 15,000, followed by the North East of England, down by 11,000. However, Scotland saw an increase of 16,000 in the number of jobless people.

The North East still has the highest rate of unemployment, at 7.8%, and the East of England has the lowest, at 3.6%.

In all, 22.94 million people were working full-time, 302,000 more than a year earlier, while 8.48 million were working part-time, an increase of 177,000 on a year earlier.

The number of people on the claimant count in February fell by 18,000 to 716,700, said the ONS.

The unemployment figures are based on a large survey, so they are estimates rather than precise figures.

For example, the figure of a 28,000 fall in unemployment has a margin of error of plus or minus 79,000, which means the ONS is 95% confident that the actual change in unemployment is between an increase of 51,000 and a fall of 107,000.

Earlier this month, the US Labor Department said the US economy added 242,000 jobs in February, far better than the 190,000 expected by economists.

The US unemployment rate remains at 4.9%, an eight-year low.

Eurostat, the EU’s statistical agency, has said the eurozone’s unemployment rate in January fell to its lowest rate since August 2011.

The jobless rate in the 19-country eurozone declined to 10.3% in January from 10.4% in December while the number of people unemployed in the eurozone fell by 105,000 to 16.65 million.


Low-paid workers to receive savings bonus

Alexander Tredwell – Leaders in Specialist Professional Recruitment

Millions of low-paid workers who put aside savings could receive a top-up of up to £1,200 over four years, the government has announced.

Employees on in-work benefits who put aside £50 a month would get a bonus of 50% after two years – worth up to £600.

That could then be continued for another two years with account holders receiving another £600.

But Labour said the scheme was “like stealing someone’s car and offering them a lift to the bus stop”.

Owen Smith, the shadow work and pensions secretary, added: “It is right that there should be incentives to save, that’s why a Labour government introduced the almost identical ‘Saving Gateway’ that the Tories scrapped.”

Chancellor George Osborne dropped the Labour scheme, which was designed for up to eight million people on benefits and tax credits, saying in 2010 that it was “not affordable”.

Mr Smith said that subsequent cuts to benefits would mean “families are going to struggle to have enough money to make it to the end of the week, let alone save for the future”.

The government’s savings scheme, known as “Help to Save”, will be detailed in this week’s Budget, in which Mr Osborne has already warned of further spending cuts.

He said that the UK had to “act now rather than pay later” and that the UK would see cuts “equivalent to 50p in every £100” of public spending by 2020, which was “not a huge amount in the scheme of things”.

Labour shadow chancellor John McDonnell called for more long-term investment, specifically in skills, infrastructure and new technology, to enable the UK economy to “withstand the global headwinds”.

Forecasters at the EY Item Club said Mr Osborne should “hold fire” on further spending cuts or risk worsening an expected slowdown in the UK economy.

Meanwhile, in a planned boost for low-paid workers, the national minimum wage is set to increase from October 2016.

The government said that research showed almost half of UK adults had less than £500 set aside for emergencies.

It said the “Help to Save” scheme would be open to around 3.5 million adults who received universal credit or tax credit. They would be able to withdraw the money if necessary and there would be no restrictions on how it could be used.

If the maximum amount was paid into the scheme over four years, it would mean savings of £3,600, with £1,200 coming from the government.

Prime Minister David Cameron said: “I’ve made it the mission of this government to transform life chances across the country.

“That means giving hard-working people the extra support they need to fulfil their potential.”

The saving accounts will come into effect by April 2018, with consultations on how exactly it will be implemented to begin shortly after the Budget.

David Finch, the senior economic analyst at the Resolution Foundation, said: “It’s vital that families have savings to fall back on to cope with financial shocks, but far too many low earners are unable to save at all. The new Help to Save scheme will provide a good incentive to start.”

I am currently able to save around £7 a week in my credit union account. But often have to take it out to pay larger monthly bills.

All in all, I struggle massively to make ends meet from week to week and there is no way I’d be able to save and keep those savings in an account continuously through the year.

With Westminster gripped by EU referendum fervour, David Cameron’s focus today is a reminder of what he’d like his final years as prime minister to be remembered for: what he called “an all-out assault on poverty” in his party conference speech last autumn.

But how do you encourage people without much money to save money? How many of the 3.5 million people eligible to take part in the scheme actually will?

I asked the government for their prediction – and they wouldn’t tell me. But it did say it would cost an estimated £70m to the taxpayer over the first two years.

So let’s, very roughly, play with that figure.

Let’s imagine the average participant can afford to put aside £10 per month. That would entitle them to £120 from the government after two years.

£70m pounds would allow ministers to give just under 600,000 people £120 – or one in six of those entitled to join the scheme.

The new levels of the national minimum wage were also announced.

For 21 to 24-year-olds, it will rise from £6.70 to £6.95 an hour, while 18 to 20-year-olds will see it go up from £5.30 to £5.55 an hour.

For 16 to 17-year-olds it will increase from £3.87 to £4 an hour, while apprentices will receive a 10p increase to £3.40 an hour.

Under the National Living Wage, announced last year, workers over 25 will receive a minimum of £7.20 an hour from April.