Northern Ireland’s largest advice organisation is warning that around 60,000 households could be affected by redundancy as the furlough scheme comes to an end after 30 September.
From 1 July 2021, the level of grant will be reduced and employers will be asked to contribute towards the cost of furloughed employees’ wages. Advice NI points to Ulster University’s Economic Policy Centre’s research,* which approximates that 60,000 NI workers currently on furlough could be at risk of redundancy when the initiative ends.
The advice organisation says that some furloughed workers may have developed a false sense of security, with various government support packages in place. Advice NI warns that some workers may not be fully aware that, unfortunately, redundancy is a very real threat, with a reported 60,000 of NI workers currently on furlough could be at risk of potential job loss and the extra financial pressures this will put on household debt.
Sinead Campbell, Head of Money, Debt & Quality, Advice NI said, “The Coronavirus Job Retention Scheme is a fantastic initiative and has proven to be a lifeline for many during the pandemic. However, now as we emerge, post lockdown, the reality is that the scheme is due to come to an end in a matter of months. If you are furloughed, now is the time to examine your situation and finances to see how you could strengthen them ahead of a potential redundancy after September.
“You could begin by creating a carefully managed household budget to ensure that you are not overspending and are able to save for emergencies, such as a potential job loss. A rule of thumb would be to have about three month’s salary saved to cover a job search. You will need to ensure that, should you lose your job, you will still be able to cover priority debts, like mortgage repayments, rent and utility bills.”
“Examine all of your outgoings and shop around, if you can, to find better deals on things like phone contracts, insurance and energy suppliers. As lockdown eases, it’s tempting to eat out again, but be sure to look around for restaurant deals to reduce the expense. Also try using supermarket coupons and loyalty schemes to save money on your weekly grocery shop.”
Advice NI and its members dealt with over half a million enquiries in 2019/20. During 2020, its debt service dealt with over £28m of debt in more than 7,500 agreements and anticipates that this could become worse as 2021 progresses.
Advice NI’s free and confidential Debt & Money Service, funded by the Department for Communities, aims to help clients to ‘free their future’ in 2021. The organisation is urging furloughed workers to seek help now with managing their finances, to help mitigate the risk of debt, should they suffer a job loss when the scheme ends.
Sinead added, “We are seeing many clients who have been living in an economic support bubble during the pandemic. The reality is that when the Coronavirus Job Retention Scheme ends after September, thousands of currently furloughed workers will be facing unemployment and could spiral into debt. We would urge anyone who is furloughed and just about managing financially, to seek professional debt advice now for help with managing your money and help to mitigate the impact of a potential redundancy.
She continued, “If you do find yourself concerned about managing your finances or struggling with debt during the pandemic you don’t have to face it alone. You can contact Advice NI by calling the Freephone helpline on 0800 915 4604 to speak directly to an adviser between 9am and 5pm Monday – Friday. You can browse our website, for full details of the service including contact details and locations of advisers in your area, and you can use the Money Talks hub to access useful online tools and information.”
Advice NI and the Independent Advice Network have 69 members and more than 300 advisers across Northern Ireland, providing free advice. Anyone can access Advice NI’s money and debt advice now for free and in confidence on freephone: 0800 915 4604 or by emailing [email protected].
