Unemployment ‘a key cause of debt’

Those who find themselves losing a job are among the most vulnerable to debt, Citizens Advice (CAB) has noted.

Commenting after the release of new employment statistics showing 38,000 more people out of work in June than three months earlier, CAB chief executive Gillian Guy said: "Being told you're out of a job is a frightening experience for anyone and without the right advice you can quickly find yourself in debt and facing big pressures in your family life."

She said workers losing jobs should make a priority of establishing their rights in various ways, including legal ones through which they may challenge redundancies if procedures have not been carried out properly or fairly.

Issues of tax, benefit entitlement and redundancy pay levels were also mentioned by Ms Guy, with the last of these being something people qualify for if they have been in a job for at least two years.

Those needing debt management plans or other forms of debt help might find they are in greatest need because they have been let go before being in a post that long, something that may happen because managers are more willing to fire staff with less experience in a firm.

According to the Office for National Statistics figures published yesterday (August 18th) the rise in unemployment was partly due to 154,000 people being made redundant in the three months to July, a rise of 32,000 on June's figure.

It means the overall number out of work is now 2.49 million, while the July figure for jobseekers allowance claims was 1.56 million, 37,100 more than in June.

Posted by Paul Thacker