Unemployment rises to 2.47 million

Wednesday, 16 September 2009 10:14

The number of people unemployed in the UK has risen to 2.47 million - the highest since November 1996.

Over the last three months, the number of people unemployed rose by 210,000 in the three months to July, and is up 743,000 over the year.

The number of job vacancies was down 12,000 in August - with 434,000 vacancies recorded.

The number of people claiming job seekers allowance hit 1.61 million in August - the highest since May 1997.

Susan Barclay, head of marketing at Scottish Provident, warned a large number of firms were now withdrawing unemployment benefit from insurance policies or increasing the cost of cover.

"It is important to remember that there are still ways for people to protect themselves and their family from the impact of unemployment," she said.

"There are a handful of firms that are still offering unemployment cover as part of broader policies so it's worth shopping around and getting proper advice from an independent financial adviser to see what you need and what you can afford."

She added as unemployment cover is more likely to be included in another policy like life cover or critical illness, consumers should make sure that if they have to claim for the unemployment benefit the premiums on the policy are being paid for that period so the other benefits on the plan are still covered.

Even though it is expected that the UK economy is now climbing out of recession, there are warnings unemployment will continue to rise, as firms deal with the aftershocks of the sharp recession.

"Unemployment still seems likely to reach three million in 2010 or early 2011 and there remains a very real danger that it could rise even further," said Howard Archer, chief UK economist at IHS Global Insight.

"Unemployment is a lagging indicator and the sharp economic contraction suffered between the second quarter of 2008 and the second quarter of 2009 will continue to weigh down on the labour market for an extended period."

He added even a return to growth would not be enough to prevent further job losses.

"In fact, we suspect that unemployment will rise for the rest of this year and much, if not all, of 2010," Dr Archer concluded.

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