MILLIONS of workers could be plunged into debt problems once the government’s employment support program ends this month.
Leave payments are set to end on September 30, but there are questions about how Britons will fare if their employers can’t take them back and if they can’t find another suitable job.
Chancellor Rishi Sunak launched the leave plan at the start of the pandemic last year to stem job losses, as many businesses were forced to temporarily shut down or operate with restrictions.
He supported millions of workers during the pandemic by paying them 80% of their salary – up to Â£ 2,500 per month.
The government initially covered the entire bill for the cost of the aid.
But in July, companies started contributing 10% to the cost of compensating workers on leave, and that amount rose to 20% in August.
Companies will continue to pay 20% of the salaries of staff on leave until the plan closes at the end of September.
The latest figures show that 1.9 million were still on leave end of June.
No extension is foreseen and as long as unemployment rate plummeted and job vacancies rose to an all-time high, with some warnings indicating that ending the leave scheme could cause problems.
The UK Finance banking trade body has warned that there could be uncertainty in the labor market once the holiday closes due to the ‘mismatch
between sectors with a large number still on leave and those likely to continue recruiting.
For example, the latest government data shows that there were 337,800 jobs on leave in the accommodation and food services industry as of the end of June.
But the latest Office for National Statistics job vacancy survey shows that there were only 117,000 jobs available in this industry between May and July.
This means that there would not be enough accommodation or food related jobs to apply for if all the workers on leave in that sector lose their current roles.
UK Finance’s latest household finance review said that while fewer people have problems paying off their mortgages, those who do not return to full employment after a leave may find it difficult to meet their credit commitments.
This could mean they’re falling behind on mortgage, loan, or credit card payments and being pushed into debt.
Hargreaves Lansdown research shows that 54% of people fear their incomes will decline as the pandemic continues to unfold.
Sarah Coles, personal finance analyst for Hargreaves Lansdown, said: âHundreds of thousands of people could be left behind when the leave plan ends, and those in debt could find themselves in serious trouble.
âThere is a real gap between the sectors where people are on leave and the sectors which are recruiting. Not all salespeople want to take a pay cut to get into care or retrain as a delivery driver. “
The NIESR predicted that the end of the leave scheme and lack of suitable jobs could push the UK unemployment rate from 4.8% to 5.4% by the end of this year.
Where to get help if you’re worried about losing your job
The leave plan was designed to keep workers employed, but unfortunately that doesn’t stop your boss from firing you.
Talk to your boss about your job and your return to work to prepare.
Talk to Advice to citizens to get information about your rights at work so that you know where you stand if your job is threatened.
If you lose your job and find it difficult to find a new one, you can apply for public assistance in the form of Universal Credit.
Universal Credit payments can range from Â£ 344 to Â£ 596.58.
However, Universal Credit is based on your current income, so if you apply while you are still on leave, you will be assessed as if that income is going to continue.
So it might be worth waiting for the diet to stop otherwise.
Losing your job can also make it harder to pay bills like mortgages and credit cards.
Covid payment holidays have been halted, but lenders have been urged to be friendly and flexible with borrowers, so it’s worth talking to your provider before falling behind.
More … than 160,000 Britons who lost their jobs due to the Covid crisis were entitled to an exceptional support package.
Your household expenses could also increase due to a Â£ 20 a week reduced to universal credit this month and one rising energy bills leave this winter.
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