Unemployment increase may lead to higher demand for IVAs

More people may seek individual voluntary arrangements (IVAs) as a result of being unable to pay what they owe after losing their jobs in a new unemployment surge.

The latest official job figures were published by the Office for National Statistics (ONS) today (September 14th) and show a worsening picture across a range of indicators.

Over 80,000 more people became unemployed in the three months to July, pushing the total to 2.51 million, the highest since January this year, while the share of the workforce in employment is 70.5 per cent, the lowest since November 2010.

And youth unemployment has reached 973,000, or 20.8 per cent of those aged 16 to 24 – the highest percentage ever recorded.

The jobseekers allowance claimant count is up as well, an indication that those out of work increasingly have to rely on benefits. At 1.58 million, this tally is at its highest since the 1.61 million of January 2001 – just after Britain came out of recession.

Such indicators may suggest the need for debt help could be great, as some of those signing on could have lost their jobs while paying off loans, credit cards and overdrafts – costs that suddenly pose a much bigger challenge.

Many of these people could be in the public sector, as a separate ONS publication revealed the second quarter saw 111,000 jobs shed as government cuts kicked in.

As well as 57,000 local government and 47,000 central government workers going, another 7,000 working in public corporations were handed redundancy notices.

By Joe White