Young and broke: the unemployment problem for under 25s in London

I see unemployment is back below 5%, so that’s good news right?

It is, but don’t get carried away. Some sectors of the population, and some regions, are faring far worse than others. Notably, the under 25s in London, probably because they are most likely to be looking for work in sectors that have been shut: bars, restaurants, theatres, other performance industries.

The 18 to 24 age group has seen the greatest decrease in pay-rolled employees since March 2020

Becky O’Connor, head of pensions and savings at Interactive Investor, said: “Beer gardens have may have opened up in the last week or so but the latest jobs data is yet to reflect the re-opening of some parts of the economy.

“Many young people will be getting back to work in the sectors that have been hit hardest over the coming weeks and starting to repair the damage done to their finances through months of lost or reduced income.”

Kate Smith, Head of Pensions at Aegon, makes the point that the increase in unemployment for younger will have knock-on consequences for long-term financial security. Aegon analysis shows that for a 25-year-old employee on average earnings, stopping pension contributions for just 3 years could mean losing out on £15,500 at state pension age.

What are the wider stats?

The ONS (Office for National Statistics) said unemployment was at 4.9% in the three months to February, down from 5% in January.

But in the year to March,811,000 jobs were lost in the UK, with under-35s accounting for a brutal 80% of those cuts. There are 1.67 million unemployed people in Britain, down 50,000 on the last quarter but up 311,000 on a year ago.

There are a further five million people still employed, but on furlough, a major headache for Chancellor Rishi Sunak.

Tej Parikh, Chief Economist at the Institute of Directors, said:

"While the labour market continues to battle with the pandemic, there are signs it is turning a corner. The Job Retention Scheme is doing a lot of heavy lifting and is helping to keep a lid on jobs losses. Over 2021 the unemployment rate will creep upward as firms tend to weak balance sheets and furlough support ends in September. Nonetheless, the green shoots of a recovery in the jobs market are emerging.”

Are job ads on the up?

Yes, and the hope is that there will be a surge over the summer. That does depend on vaccine success and how deadly new variants of the virus prove to be.

Josie Dent, managing economist at the CEBR, said:

“Single-month figures suggest that job vacancies began to grow again in March 2021, rising from 562,000 in February to 650,000.