NI Redundancies at 10 Year High in 2020
We speak to JT Maxwell Director, James Maxwell about the recent NI Redundancies statistics and how he views this will affect personal debt for households across Northern Ireland.
10,500 collective redundancies were proposed in Northern Ireland last year, with 4,700 confirmed redundancies during 2020.
These figures, released last week by the Northern Ireland Statistics and Research Agency, represent the highest level of redundancies seen here in a decade.
The Office for National Statistics provided more scary numbers, confirming that there were 793,000 fewer people on payrolls in December 2020 than there were in December 2019. The number of people on payrolls plummeted by 828,000 between February and December last year.
Financial difficulties pre pandemic and COVID grants
Bearing in mind the fact that the job retention scheme, government COVID grants, and bounceback loans have all been available throughout most of the crisis, these large numbers are cause for concern for workers and employers alike in Northern Ireland.
Some of these businesses may have been struggling before the pandemic. We did also see previously successful businesses make public announcements of staff redundancies before the job retention scheme was announced. So, it’s possible that some of these numbers represent an early-pandemic ‘knee jerk’ reaction.
The ONS also revealed that Northern Ireland has the lowest unemployment rate of the UK. In a nutshell, this means that fewer people in NI lost their jobs in 2020 than was seen in other UK regions. It’s reflective of the high proportion of the local population being employed in the public sector and whilst this may shelter NI during an economic crisis in terms of unemployment rates, it certainly does not bode well for the future in particular in terms of job creation when set against the backdrop that is the Northern Ireland Protocol.
Northern Ireland also has the lowest employment rate and the highest rate of economic inactivity. Large numbers of economically inactive people show that we have the highest proportion of people unable to work – this could be due to age, illness, or caring responsibilities among other reasons. Given the rapid rise in COVID cases and deaths – and especially when you factor in the effects of ‘long’ COVID – these figures are not surprising.
All of these numbers are, however, shocking and are dreadful news for the local economy. Given all but 500 of these redundancies happened after March demonstrates the scale of the economic crisis facing Northern Ireland.
Unfortunately, and it is painful to state, the Government Job Retention Scheme could be masking the true reality of an impending economic earthquake. I firmly believe that if the JRS scheme is withdrawn before there is a significant reduction in COVID restrictions, these figures will spike.
Seek support at the earliest opportunity if struggling with debt
While businesses may close and people are made redundant the important thing for both firms and individuals is to seek professional advice early if you are struggling or foresee yourself struggling with debts.
We are seeing increasing numbers of businesses and individuals getting in touch with us to advise on how to manage debt and cashflow if their business had to close or downsize, or if they saw a reduction in income or redundancy.
These individuals represent what I call the ‘COVID-indebted consumer’: people with many debts including mortgages, loans and credit cards, but with surplus income to cover those debts. That carefully budgeted equilibrium could be destroyed by a drastic change of income, so they are very wisely contacting us for a free chat and our professional advice.
It’s been a great source of comfort for them to hear that redundancy payments don’t have to be swallowed up by large debts. Using an Individual Voluntary Arrangement (IVA), we can negotiate a one-off payment to settle the debt, leaving an amount of redundancy money to live on until a new job is found. The settlement is usually a proportion of the debt rather than the whole amount, and once it’s paid, you no longer have that debt hanging over your head.
Very few people find themselves in need of our services right now, because their situation is currently OK – but it’s also uncertain and subject to change at any time. The particularly savvy people are getting in touch regularly, recognising that an ever-changing economic picture means they need to ensure the advice they seek is up to date, particularly if anything changes in their own circumstances.
This savvy approach is one we recommend to absolutely everyone with any kind of debt or regular payments which rely on your income. Get advice early and get advice often from someone who knows what they’re talking about.
We specialise in finding creative solutions to debt problems of all shapes and sizes for companies and individuals alike. We’re on the end of the phone if you need a chat, and we are happy to talk – for free – any time that suits. Personal Solutions | Corporate Solutions
Call us today on 02892 448112
For more statistics published by by the Northern Ireland Statistics and Research Agency, visit https://www.nisra.gov.uk