Debt woes may face bank staff as job cuts loom

Over the past few years, one of the big complaints from many quarters has been that the banks not only created the economic crisis, but have subsequen…

Over the past few years, one of the big complaints from many quarters has been that the banks not only created the economic crisis, but have subsequently been bailed out by taxpayers, only to enjoy an easy life while others suffer.

This notion paints a picture of fat cats continuing to enjoy huge bonuses while small businesses struggle to get loans, first-time buyers face restricted access to mortgage finance and the average consumer struggles with pay freezes and the ever-present threat of unemployment.

However, while there may be some truth to this – as evidenced by recent rows among Barclays shareholders over executive pay and bonuses – not everyone in the financial sector is doing well.

And this particularly applies to employees of Clydesdale and Yorkshire Banks, owned by Australian parent company National Australia Bank (NAB) has announced a range of cuts, including 1,400 jobs that will go between now and 2015.

Natural wastage may account for some of this, but not necessarily all and with 29 out of 73 Financial Solution Centres set to shut, the impact may hit those affected locations more than others, meaning some compulsory redundancies.

And being made redundant is often a fast way into unmanageable debt, since people whose income is enough to comfortably service interest payments while they are in work will often find they no longer have the income to pay these while still meeting everyday bills.

NAB argued that the decision was brought about by the reduced business the banks have seen in the UK in what has been the slowest recovery since the Great Depression of the 1930s.

The development is not the only instance of bank job losses this month, with HSBC announcing 2,217 jobs will go in the next few months. Head of the UK bank Joe Garner said: "I feel the deepest sympathy for those colleagues who are affected by these changes and would like to stress that we will be doing everything we possibly can to support them over the coming months."

But for those who may get into deep debt, such words may come as little comfort.

By Joe White
 

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