New research from innovation foundation, Nesta, reveals over a third of workers (36%) feel their job is less secure than before the pandemic, rising to 63% of those on furlough.
The research, conducted to mark the launch of the Rapid Recovery Challenge, also found this worry is not just limited to job security. More than two in five (44%) feel less financially secure than before the pandemic, and this uncertainty is particularly felt in the younger generation (52% of 18-24 year olds).
The economic impact of COVID-19 is hitting some groups of society particularly hard, including those in low paid work, younger workers and those in insecure roles, such as gig workers or those on temporary contracts. In fact, since the pandemic started, vulnerable workers such as these are twice as likely to be working fewer hours compared to people in more stable work who haven’t been impacted by the pandemic (26% compared to 13%) and nearly a third (32%) say a second lockdown would send them over the edge financially.
Just 35% of vulnerable workers are confident they would be able to find another job in three months if they were made redundant, compared to half (48%) of workers in a stable job, and 30% say they’d have no prospects at all.
This lack of job security is particularly worrying as vulnerable workers are also far less likely to have a financial safety net to fall back on. While 30% of stable workers have at least three months of outgoings in savings, this figure is almost halved for vulnerable workers (18%). Indeed, vulnerable workers are more than three times as likely to have no savings at all (16% of vulnerable workers compared to 5% of stable workers).
When asked about what options people would have to turn to if they lost their job, a third (33%) of vulnerable workers would have to turn to government benefits, one in five (21%) would sell whatever they could and one in ten (10%) would have to move in with parents or family. It’s therefore unsurprising that a third (34%) say worry about their job is impacting their mental health.
Ravi Gurumurthy, Chief Executive of Nesta, said: “COVID-19 has created a huge economic shock, laying bare and exacerbating pre-existing problems for people on low incomes and in precarious work. Millions face severe threats to their job security and household finances, both immediately and in the longer term, and we know that low-paid workers, people in insecure roles and those under 25 will be hit hardest.
“There is an urgent need to support people at risk of losing their livelihoods and financial security, or who already have, so that millions do not find themselves out of work and out of pocket. I’m looking forward to seeing the range of solutions innovators develop to address these issues and support those whose jobs and finances have been most impacted by the pandemic.”
Nesta is launching the £2.8 million Rapid Recovery Challenge to find and support tools and services that improve access to jobs and money for people across the UK, focusing on those hit hardest by the economic shock of COVID-19, such as Dani. Dani is a self-employed lighting technician in the entertainment industry who lost all her work when lockdown hit and theatres were shut down. She’s been struggling to pay her bills in recent months but is very worried about her prospects of finding a different job given the hundreds of applicants applying for every role.
Funded by Nesta, in partnership with the Money and Pensions Service and the JPMorgan Chase Foundation, the Challenge will support innovators to develop and scale solutions through financial grants and non-financial support such as access to data, help with product and service design, and access to a wider support network of organisations. The two winning projects will be announced at the end of the programme in September 2021.
Caroline Siarkiewicz, CEO of the Money and Pensions Service said: “The Covid-19 pandemic has intensified the money worries many people face, but particularly for young people and workers on lower incomes. It’s vital that those worst hit can now access the right support and start to find a way forward with their finances.
“We’re pleased to help fund this initiative, which supports the decade-long goals set out in our UK Strategy for Financial Wellbeing to enable everyone – including those in vulnerable circumstances – to make the most of their money and pensions.”
When asked about their top worries at present, paying the bills was one of the top three concerns for vulnerable workers (24%) along with their mental health (26%) and the health impacts of catching COVID-19 (27%). Overall, vulnerable workers are more likely to worry about money issues compared to stable workers, with 43% worried about paying bills or debts, buying food, and gaining financial independence, compared to 32% of stable workers.
Hang Ho, Head of Global Philanthropy for EMEA and LATAM, JPMorgan, said: “The impact of the COVID-19 pandemic is being felt most keenly by those already in precarious economic positions, many of whom have already lost their jobs or have little or no financial buffer to weather the crisis. As the fight against this disease and its impact continues it is imperative that these people not be left behind and are supported to improve their career prospects and financial resilience. We are excited to work with Nesta to support the most impactful approaches to grow, reach more people and tackle these prescient issues.”
For more information about the Rapid Recovery Challenge visit rapidrecovery.challenges.org