The Challenge seeks to improve access to jobs and money
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 low-paid workers, people in insecure roles and those under 25 will be hit hardest.
With the UK officially in recession, economic recovery is now a major challenge. There is an urgent need to support people at risk of losing their livelihoods and financial security so that millions do not find themselves out of work, out of pocket and out of prospects.
The Rapid Recovery Challenge aims to find, inspire and accelerate innovations relating to jobs and financial recovery that will support one million people across the UK.
feel their job is less secure than before the pandemic, rising to 63% of those on furlough.
feel less financially secure than before the pandemic, and this uncertainty is particularly felt in the younger generation (52% of 18-24 year olds).
are confident they would be able to find another job in three months if they were made redundant, compared to 48% of workers in a stable job.
have at least three months of outgoings in savings, while this figure is almost halved for vulnerable workers (18%).
Unemployment is likely to affect three million people in the UK this year as the furlough scheme winds down at the end of October.
Low earners are seven times as likely as high earners to have worked in a sector that has been shut down due to the crisis. People in insecure roles are the least protected by traditional employment contracts and rights, meaning they’re some of the first to lose work or earn less than they ordinarily would in an economic crisis.
Young people finishing education and looking for jobs will also be at a severe disadvantage, as they are far less likely to have gained experience and skills through work to date and will be entering a challenging labour market with far fewer work opportunities.
Low-paid workers are often already struggling financially. Almost two-thirds of low-to-middle income households report having no savings at all, and therefore no financial buffer to accommodate a sudden drop in income. In particular, young people haven’t had as long to build up financial security.
People in insecure work have less predictable income, which makes money management difficult. Thirteen per cent of workers who have been furloughed, put on enforced leave or given reduced hours due to the COVID-19 crisis have reported defaulting on a payment in the last month.
Under such pressure, people may be forced to go without food or essentials, and are much more likely to use high-cost credit with nowhere else to turn. People already living in poverty are at great risk of being pushed further into hardship.