Largest Decrease in UK Employment in Over A Decade

· 3 min read

Despite continuing government support, statistics released recently by the Office for National Statistics reveal that employment levels in the UK have fallen by the largest ever amount in over a decade. Between April and June, around 220,000 people have lost their jobs, the largest quarterly decrease since May to July 2009, in the depths of the financial crisis.


Despite continuing government support, statistics released recently by the Office for National Statistics reveal that employment levels in the UK have fallen by the largest ever amount in over a decade. Between April and June, around 220,000 people have lost their jobs, the largest quarterly decrease since May to July 2009, in the depths of the financial crisis.

Self-Employed Workers Take the Hardest Hit

Self-employed people were the hardest hit, representing the majority of the decrease. The statistics only reported 4.7 million self-employed people, a record 238,000 fewer than the previous quarter. However, the ONS cautions these numbers still do not reflect the full impact of the COVID-19 pandemic, since they do not account for millions of people who are furloughed, on temporary unpaid leave, or those on zero-hours contracts who are unable to get shifts.

Another worrisome indicator is the sharp increase in the number of people claiming universal credit, which provides financial aid to the unemployed and workers with a low income. The Department of Work and Pensions revealed that the number of claimants has seen an increase of 117% since March, reaching 2.7 million people in July. These numbers reflect the impending threat of a vast number of citizens falling into financial dire straits because of the pandemic.

Tapering of Government Support Expected to Worsen Situation

As alarming as these figures sound, experts warn that this is only the tip of the iceberg. A mounting number of job losses are expected in the coming months as the government begins to taper its job retention and furlough scheme, which have been instrumental in keeping businesses afloat during this challenging time.

The furlough scheme was specifically designed to keep workers employed, even if they're not actively working. However, since the financial support under this scheme is being reduced from this month onwards, many businesses may find it difficult to continue to retain employees. While at present, unemployment statistics are above government expectations, they will have to be reassessed after a few months to reflect the reality of the situation.

The most likely to be affected are the youngest and oldest workers, as well as those in the manual labour force. Apart from company layoffs, a slowdown in recruitment and overall hiring freezes have been a major cause behind mass unemployment. Over 140,000 redundancies have been announced in June alone, signifying that the worst is yet to come.

Decrease in Pay for Employed People

Another unfortunate effect of the pandemic has been on pay rates for those who remain employed. Between April and June, regular pay levels have decreased by 0.2% as compared with the same period last year, representing the first negative pay growth since records began.

The ONS reported that the number of UK employees on payroll is down 730,000 as compared with March, mainly due to the number of workers who have jobs but are not doing any paid work at the moment.

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Rhea Tibrewala
Rhea Tibrewala
Rhea joined Pension Times in 2020, bringing over 5 years of experience of working in and writing about the finance sector. She is a tech fanatic, an avid reader, and enjoys travelling and listening to music in her free time.
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