Leading UK financial commentators agree there will be more job losses in 2012. The question is however, how many and where. The majority of experts agree that areas with a high reliance on the government for jobs will suffer more. In cities other than the Southeast, local authorities are often the largest employers. But it’s not only local council employees that will be affected.
Local authorities and government agencies have been the engines of regional economic growth since the 1980’s in industrially depressed towns and cities like Burnley and Birmingham. The central government provided funds for urban renewal and regional development grants. These grants were used to build local services, infrastructure and enterprise zones. These funds attracted some top-tier companies, particularly successful overseas brands looking to expand in the 1990s boom country.
However, the majority of jobs created by this investment were primarily service-based and dependent on the local economy. Japanese double glazing manufacturers and dealers cannot replace the manufacturing of car components and machine tools. These industries aren’t able to export or sell beyond their locality.
The major northern conurbations are crucial to the local economy because of the importance of the public sector workers. However, areas with a majority of the workforce working in the private sector are stable, despite taking a severe hit in 2008. The majority of firms that survived are now much stronger and waiting to see how the UK economy does before expanding or adding staff.
The reduction in headcount and spending by the public sector in areas where these quiet successful businesses are concentrated is not having an effect on the amount of money that is spent on local services and shops. This is especially evident in London and the Southeast.
The public spending cuts will be felt most strongly in areas that are highly dependent on the government for employment. Local service industries will see a greater drop in customer spending. The emergence of a two speed Britain is evident. While the Southeast is proving to be resilient, it is also marking time. Other regions, however, are still experiencing contractions with the most severe effects being felt in the major conurbations.
Anyone who works in the private sector beyond the Southeast should be aware of this warning. Despite the fact that they might feel secure in their current job, Their local economies have not yet felt the effects of the austerity-driven cuts. In the event of a drop in demand, there will be job cuts and redundancies in retail and service sectors. It is important to think about your options if your employer decides to cut back on this job. This is especially true for wage earners who depend on this job, particularly those with young families.
According to market research by 2011 specialist providers, the majority of people lose their jobs for at least seven months after redundancy. They are mostly on their own financially during this time, with UK state benefits like Job Seekers Allowance costing less than PS70 per month. People who lose their jobs but have enough savings to pay their bills for six to 12 months will be able to survive. There is an alternative to taking on huge debts and putting your home at risk if you don’t have any savings.
The low-cost Lifestyle Protection Insurance (also known as short term Income Protection Insurance) will pay any person who is unable or unable to work for any reason up to PS1,500 per year. This payment is not subject to tax and doesn’t affect your entitlement to state benefits. A policy that paid out PS1,000 per monthly to a 30-year-old would result in a lower premium than PS30 per months.
Only online specialists can provide quotes as low as these. You can also get the same coverage from banks or independent financial advisors, but they will charge you more for a personal service. It is a simple product that is worth investigating online.
The most important thing a potential buyer should understand is that Lifestyle Protection Insurance and short term Income Protection are only available to people who have steady employment. The reason is that insurance underwriters will only offer coverage to people at an average risk of being laid off. Let’s say that a company announces it will be cutting its staff or merging with another. An application from someone working at the company would be considered by a Lifestyle Protection Insurance Underwriter. It is no different than a Household Insurance Underwriter being asked to cover a fire-damaged building. Anyone who is in a job that might make this insurance a possibility should consider buying it sooner than later.
Large sections of the North’s working population, especially those who live in the North, could soon be denied Lifestyle Protection Insurance or short-term Income Protection Insurance. People in these areas need to understand that they may only have a short window of opportunity to purchase this coverage before the insurers start turning them away in increasing numbers.
