Furlough and inflation fears: job concerns persist as the UK opens up

Our exclusive NerdWallet survey looks at how people are feeling about their job security as the UK opens up, their fears surrounding the tapering of furlough, and worries over how rising inflation will affect their personal finances.

Connor Campbell Published on 23 August 2021. Last updated on 24 August 2021.
Furlough and inflation fears: job concerns persist as the UK opens up

As the country eases its remaining lockdown measures, our NerdWallet survey reveals that the UK’s labour force continues to have marked concerns over job security, wage growth and inflation.

Around a quarter of the 939 UK adults in full-time employment polled are planning to, or have already begun, searching for a new position due to fears over job security, with 24% actively worried about the tapering down of furlough.

But this doesn’t tell the whole story. Almost a third (32%) felt the pandemic-led rise in remote working has actually increased their available job opportunities.

And while those aged 18 to 34 have been hit hardest when it comes to wages and job security, 45% of that demographic said that more jobs were now within their reach due to the shift in working patterns.

Here’s what our survey revealed:

Key findings:

  • 45% were not satisfied with their current job.
  • 24% of employees were concerned about their job security as the furlough scheme tapers, rising to 33% for those aged 18 to 34.
  • 27% have seen their salary decrease since the pandemic began.
  • 47% of Londoners have changed jobs in the past 12 months due to concerns over long-term job security.
  • 51% were worried about how inflation would affect their finances, rising to 71% in the capital.
  • 32% felt the rise in remote working has increased the pool of job opportunities available to them.

Post-furlough fears

The UK’s grand reopening is a double-edged sword for many, carrying with it the threat of job losses following the end of the government’s furlough scheme.

And this is not lost on the UK’s workers. Nearly a quarter (24%) of those surveyed were worried about how tapering would affect their job security.

Introduced in spring 2020, furlough was designed to protect the jobs of those who could not work due to the pandemic.

Initially, this saw the government pay 80% of the wages of those eligible. That contribution then fell to 70% in July 2021, and to 60% throughout August and September 2021, and is scheduled to come to a close on 30 September.

Commenting on the findings, Nic Redfern, finance director at NerdWallet, said “Covid-related financial pressures will likely continue to plague businesses for some time. Coupled with the tapering down of the furlough scheme, it is clear that many Britons do not feel as though they have job security at present.”

It has led to a quarter of the country starting their search for a new role because of worries over job security with their current employer. But that is not easy – 23% of people were still looking for a new job after beginning their search at least six months ago.

These fears are supported by a report by independent think tank the National Institute of Economic and Social Research stating that the end of the furlough will cause the loss of 150,000 jobs.

It is less of a concern the older you are, however, reflecting a potential link between seniority and job stability. While 33% of 18- to 34-year-olds were stressed about the end of furlough, the percentage dropped to 21% for 35- to 54-year-olds and is just 13% for the over-55 age bracket.

It is wise not to panic. Redfern went on to say:

"Taking the time to think through their options could help establish just how stable a person’s position is, and what the longer-term outlook is for the business. From here, people can make an informed decision about what the best next step would be in their respective careers.”

Pandemic pushes down job satisfaction

Even if the pandemic has not made you worry about losing your job, it very well may have had an impact on your remuneration and job satisfaction.

Almost four in ten (38%) of our survey respondents said that their employers had put a freeze on pay rises due to Covid-19, with 28% of employers pausing promotions and 24% cutting down on employee benefits.

Most shockingly, more than a quarter of respondents (27%) said that their wages had actually decreased since the start of the pandemic.

It should come as no surprise that job satisfaction has taken a hit in the light of these developments. Indeed, only 55% of respondents said they were satisfied with their current role, which, for context, compares to 69% of people in the 2019 Working Lives survey from the Chartered Institute of Personnel and Development.

This dissatisfaction is most pronounced in those areas where people often feel neglected by the government. In comparison to the 71% of workers in Northern Ireland, 68% of Londoners, 67% of workers in Wales and 62% in Scotland who were satisfied with their current role, the following regions saw fewer than half of respondents satisfied with their jobs:

  • North East – 39%
  • East of England – 44%
  • Yorkshire – 45%
  • South West – 46%
  • South East – 49%

This may, in part, represent the comparative ease of working from home in London, with its greater proportion of professional services employers, compared to the rest of the country.

While just over half (52%) of Londoners who took part in the survey said that working from home had boosted the job opportunities available to them, the figure dropped to 32% as the national average among our survey respondents.

In places such as the North East that number was as low as 25%, while in Scotland it was 24% and in the South West just 22%.

Generational divide

Differences in full-time workers’ experiences of the pandemic are not just regional. Age has played a huge factor in how people have felt about their employment over the past 18 months.

Not only is the stress of furlough ending more pronounced for those aged 18 to 34, this is also the age bracket worst hit by paused promotions (40%) and paused pay rises (45%), as well as wage decreases (31%).

Lacking the security and influence seniority can bring in the workplace, this age bracket is arguably always first in the firing line when it comes to these issues, a trend Covid-19 may have exacerbated.

But one area 18- to 34-year-olds do seem to have benefited more than their older colleagues is in working remotely.

While 32% of people felt working from home has increased the number of job opportunities available to them, that rises to 45% for the 18 to 34 age bracket, but falls to 29% for 35- to 54-year-olds and just 13% for those aged 55-plus.

It speaks to the differences in how comfortably various age demographics have taken to our altered working patterns.

Rising costs, rising concerns

If the pandemic has caused a shift in how people feel about work, it has also created a heightened awareness of the state of the UK economy and forced people to become more financially savvy. Just ask the 32% of people who now feel the need to spend less and save more due to worries about being made redundant.

This extends to fears over rising costs. Some 51% of respondents expressed concern over the impact of inflation on their finances. That echoes a Citi/YouGov poll, which showed that people believe inflation will hit 3.1% in the coming 12 months.

Notably, no question had a greater disparity between male and female respondents than “Are you worried about how inflation will impact your finances?”. Fewer than half of men (47%) said yes, compared to 57% of women.

Perhaps this raises the question of whether traditional gender roles persist when it comes to women being in charge of the household budget and the awareness of rising everyday costs this would create.

Recognition of inflation is so high that it is also playing a role in people’s job searches. Close to a third (31%) of respondents said they will start looking for a new job if their wages don’t increase in line with inflation over the next six months, jumping to 42% among 18- to 34-year-olds.

London: land of insecurity

They may be among the most satisfied workers in the UK, but Londoners are also the most worried about job security and wages.

While a certain amount of temporariness is baked into how the capital works – and is likely to continue after Covid-19 – there has potentially been a shift in the reasons behind people frequently changing roles.

Almost a half (47%) of the capital’s full-time workers have changed jobs in the past 12 months due to concerns over long-term job security. The answer from all respondents was just 18%, while in the West Midlands, the next highest region for people switching jobs, it was only 28%.

It follows that Londoners are most fearful over the tapering of the furlough scheme (57%) and are most likely to be both looking for a new job due to fears over long-term security (52%) and still searching for a job after six months (48%).

As many as 53% of Londoners have had employee benefits cut; 55% have had promotions paused; and 65% have seen pay rises stopped.

Alongside the intense competition for jobs in London, it reflects the higher proportion of younger people in full-time employment in the capital – as mentioned, the age bracket worst hit by the pandemic, if also the most naturally transient.

It stands to reason, then, that the instability and well-documented cost of living in the capital has meant Londoners are the most concerned about rising prices, with 71% worried about inflation.

This means Londoners have a very real fear of being priced out of the city, captured by the 57% who will look for a new job if their wages don’t match inflation in the next six months.

What can I do to combat job insecurity?

If you are worried about your long-term, or even short-term, job security, there are a number of ways you can shore up your finances and put yourself in the best position to face the future.

1. Consider the benefits of budgeting

Get your personal finances into the best possible shape. Think about your spending habits and priorities, and consider the benefits of budgeting. There are numerous financial apps out there to help you start on this journey.

This may help you manage the impact of rising inflation on your everyday household costs.

» MORE: How to budget your money

2. Build up an emergency fund

If your budget allows, build an emergency fund. This is an amount of money set aside to tackle any unforeseen expenses or changes to your personal circumstances, such as losing your job.

» MORE: How to start saving for your emergency fund

If you are on a low-income, you could look into the Help to Save government scheme for assistance in starting your savings pot.

» MORE: Help to Save explained

3. Take advantage of support and help

There are multiple schemes and services out there designed to help you navigate any problems you might encounter with your finances.

For example, if you are unable to pay off any pre-existing debts, then the Debt Respite Scheme is there to try to provide some breathing room.

» MORE: How to apply for the Debt Respite Scheme

And if you do lose your job, you should make sure you are aware of which benefits you are eligible for.

» MORE: What is Universal Credit and how can I apply?

4. Talk to your employer

If you are worried about your job security, changing roles is not always the answer.

Try talking to your employer, as it could help establish how stable your position is, and what the long-term outlook is for the business. This will allow you to make a more informed decision about your own future.

5. Consider retraining for a new role

If you do feel the need to change jobs, you can take control of your future by retraining for a new role, even if you are on a budget.

Making sure you are retraining for a ‘future-proof’ position can help you secure longer-term security moving forward.

» MORE: Retraining for a future-proof job

Disclaimer:

The market research was carried out between 22 and 28 July 2021 among 939 UK adults in full-time employment via an online survey by independent market research agency Opinium. The data sample of 939 UK adults in full-time employment is fully nationally representative. This means the sample is weighted to Office for National Statistics criteria so that the gender, age, social grade, region and city of the respondents corresponds to the UK population as a whole.

Image Source: Getty Images

About the author:

Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more

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