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The last six months have been a challenging time for us all. Everyone has had to change the way they live, work and socialise. Even as we’re still realising the full impact this pandemic continues to have on our economy… we know it’s looking rough.
In this series, we’re going to focus on the financial reality for millenials during and post-covid. For every challenge, we’re going to offer advice and look for potential opportunities to help you prepare and mitigate the damage this pandemic is having on your personal finances- I’m really trying my best here to stop it being all doom and gloom!
In this first chapter, I want to discuss the challenges young people are facing when it comes to employment. Youth unemployment is set to hit one million in the UK this year, rivalling those scary statistics of the 80s
How has the virus affected job prospects?
Lockdown had a huge impact on the world of work, with only 27% of the workforce being furloughed (ONS) many sectors saw significant closures, particularly in hospitality and tourism. The IFS found that those under 25s are around two and a half times more likely to work in a sector that has been shut down, and with the gig economy being dominated by under-25s, young people have been especially affected.
Graduate job prospects were also severely affected by the pandemic, with the number of graduate jobs advertised online fell by over 60%, according to data published by CV-Library. Of course, the number of graduates looking for jobs hasn’t changed, so the ratio of applicants to jobs has skyrocketed- most notably, in the recruitment sector there has been a 471.4% increase from 2019.
By May 2020, three in five companies had stopped their apprenticeship schemes as a result of the pandemic (Source). Further, a third of those who had already started their programmes had less than a one in five chance of completing them. Clearly, the damage of this pandemic is being felt across the spectrum for young people.
The long-term effects of youth unemployment and the work market
The long-term effect of having such a rough entry into the workforce will be damaging to the economy as a whole, as well as to those young peoples’ lives. They are likely to earn lower salaries in lower-skilled jobs, meaningless taxable income and slower economic growth for the whole economy.
In terms of their personal lives, young adults entering the workforce during periods of crises are likely to take longer to buy homes and become financially independent, paired with the growing trend of waiting longer to get married and have children. Extended periods of youth unemployment can be hugely damaging in terms of mental health and wellbeing, which in the long run can raise further issue with future job retention
Let’s be honest, those are some scary numbers. But it’s not all bad- check out the next instalment to see which industries are growing in the pandemic and how you can make the best of the opportunities out there.
As mentioned previously we know these subjects can have negative effects on your mental health. As such, we invite you to read our blog about dealing with financial stress and managing your mental health.
In uncertain times it’s more important than ever to get your finances under control. If you’re looking for better ways to monitor your bills and spending and take control of your budgeting check out the free Cash Coach app.